Here’s Why Having Education Brings Poverty Reduction and Economic Growth

Education is considered one of the most crucial determinants of economic growth. Fundamentally, the long-run goals of education are socio-economic development, human capital development, and productivity. Education has been proven theoretically and empirically relevant in fighting poverty, creating more opportunities in the labor market, and economic growth. 

I am sure you are aware that poverty is a terrible disease in our society today, killing many. Poverty is often defined as a condition or state in which people lack the resources and essentials for a minimum standard of living. As a result of this, their basic needs like food, shelter, and clothing are not readily available. The World Bank Organization describes poverty as “poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school. Poverty is not having a job, is fear of the future, living one day at a time.” Poverty is not just an individual concern but a broader social problem.

We all don’t want to be poor because poverty can have many adverse effects on individuals, which range from physical to mental issues; the truth is that a poor man is an unhappy man. While in the society, poverty can be a damper on economic growth and can lead to issues like crime, unemployment, poor education, and health. The crimes we see around us would be lesser if poverty could be reduced. This is why different measures have been put in place for poverty reduction. Poverty reduction involves measures intended to lift people out of poverty permanently. Strategies like programs in education, health entrepreneurship, technology, income redistribution, and various forms of economic development are often used for poverty. As mentioned earlier, education has been proven to reduce poverty and grow the economy, but skill acquisition is also an excellent strategy for poverty reduction and economic growth.

You should be aware of the common phrase “education is the key”, That is, proper education is the key to many things, including poverty reduction and economic growth. Education is often considered the great equalizer because it opens the door to jobs, resources, and skills, all of which can help an individual not only survive but also thrive. You can’t get a job without education; you must at least have basic education to get any job. This is why globally; education is recognized as an operational strategy for poverty reduction and economic growth. Education helps tackle many other issues that can keep people and families vulnerable to the cycle of poverty. 

Education Contributes to Poverty Reduction and Economic Growth in Many Ways

Still, the basic is that with education, individuals are able to acquire knowledge and skills which they can use to earn higher incomes and build a successful life. Education is the leading determinant of economic growth, employment, and earning; therefore, the economy of an individual, family or even the nation will suffer without education. 

Let’s share some ways education contributes to poverty reduction and economic growth. 

Education Can Combat the Underlying Structures of Poverty

An increase in access to education can contribute to reducing poverty. Skills like reading, writing, and numeracy which we acquire from school, have been proven to affect marginalized populations’ incomes positively; it increases the rate of return on the economy. Education enables people with paid formal employment to earn higher wages. Meaning the more educated you are, the higher your take home (wages or salary) will be. Children and youth get relevant theoretical and practical skills from going to school, which improves their chances of getting a great job in the future with a higher income. People who are educated gain higher knowledge and skills than those who do not. All of these make education critical for escaping chronic poverty and breaking the cycle of generational poverty. 

Education Increase Gross Domestic Product (GDP)

Education is strongly linked to economic growth. According to a study co-published by Stanford university, 75% of the growth in GDP across the world between 1960 and 2000 was related to increased math and science skills. Cognitive skills acquired from schools have extraordinary effects on the economic growth of a community or nation. Any society or country with a higher percentage of education tends to generate more revenue which helps grow their economy. Education is a catalyst for development goals that influence other sectors like health, agriculture, technology, etc., which all have roles to play in economic growth.   

Education Fights Inequality

Quality education can act as a leveler within society by liberating individuals. Inequality is considered one of the causes of poverty because all types of systemic barriers, like physical ability, religion, socio-economic status, and race, create margins that increase those living in extreme poverty. Education as a fundamental right for all serves as a leveler against some barriers that keep certain people or groups way behind. Women, people of all races, and people with different challenges have access to education, giving them a better life chance. 

Suppose workers from poor and rich backgrounds have access to the same education. There won’t be a disparity between the two as their earnings will be within the same range. 

Education Increases Individuals Earnings

The number of years you spend in school significantly influences how much you earn. Statistics have shown that an additional one year in school can increase your earnings by approximately 10%. People with higher education tend to have access to higher-paying jobs and are more likely to have access to more job opportunities. Education increases your efficiency and makes you valuable, which many organizations are looking for and are willing to pay for, giving you an edge over someone with no education. When you earn more, you are able to break the cycle of poverty and live a better life. 

Education Increases Productivity

Human skills are essential for the economic system, and it has been proven that education impacts productivity growth. Education increase productivity in the following ways; firstly, by increasing the collective ability of the workforce to carry out tasks more efficiently and faster. Secondly, by transferring knowledge about new information, products, and technologies created by other people. Lastly, increasing creativity boost an individual or nation’s ability to create new knowledge, products, and technologies. 

The role of education in poverty reduction and economic growth should be emphasized. But one crucial point we all need to hold on to is that education is critical to a better life and future.