(The) analysis of high-level education effect as locomotive to escape the middle-income trap and its futurological assessment for sustainable growth

Abstract

We study the role of educational level and the quality of education on economic transition from middle-income to high-income stage. For this, we classify target countries into 3 groups with economic growth rate from 1960 to 2010. We introduce difference-in-difference estimator as a regressor and the 1st order differential model to extract role of educational level in transition from middle-income to high-income level. The results suggest the tertiary education has more impact on escaping the middle-income trap. Also the quality of education is estimated to interpret why some countries fail to reach high-income level even though their high educational attainment rate. We find they have weak link between the educational attainment ratio and the change rate of industrial structure from agriculture to manufacture, which was the prime engine for the modern economic growth. In futurological assessment, we introduce colored 3-dimensional foresight method to extract key drivers for sustained economic growth in future. And 2 variables are decided as key driver for future economic drivers and scenario analysis based on $2 \times 2$ partitioning method is performed. The results suggest blind increase of high-level educational attainment ratio in population could have negative impact on economic growth for countries like South Korea. Hence it is proposed the demand from industrial sector to be considered in educational policy for the sustained growth because correlation between educational system and industrial sector can represent the status of economic growth.