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Manpower, Education, and Economic Growth

Published online by Cambridge University Press:  11 November 2008

E. R. Rado
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Extract

PERHAPS the most notable feature of the literature of economic development and planning over the past decade has been the discovery—or the belated rediscovery—that capital investment is not the sole source of economic growth; that the quality of the labour force is intimately connected with the (potential) rate of economic growth; that this quality is based on, and can be affected by, the education that members of the labour force received; and that consequently manpower and educational planning is a necessary part of over-all economic planning. Indeed so thoroughly has this new orthodoxy been accepted that some countries now have manpower and educational plans even though they may have no over-all development plan worth speaking of.

Type
Review Article
Information
The Journal of Modern African Studies , Volume 4 , Issue 1 , May 1966 , pp. 83 - 93
Copyright
Copyright © Cambridge University Press 1966

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References

Page 83 note 1 E.g. Schultz, T. W., ‘Investment in Human Capital’, in The American Economic Review (Menasha, Wisconsin), 03 1965;Google ScholarBecker, G. S., Human Capital (National Bureau of Economic Research, New York, 1964);Google ScholarDenison, E. F., The Sources of Economic Growth in the U.S.A. and the Alternatives Before Us (New York, 1962);Google ScholarBlaug, M., ‘The Rate of Return on Investment in Education in Great Britain’, in The Manchester School of Economic and Social Studies (Manchester), 09 1965.Google Scholar

Page 84 note 1 Most, but not all. The argument that indigenous entrepreneurship is a key constraint on the growth of under-developed economies is heard less often nowadays than it used to be 10 years ago, though one suspects that the problem is as real as ever. We know how to produce African engineers and doctors (even if we cannot produce them fast enough) but we know almost nothing about how to spot and develop successful entrepreneurs. Cf. Schatz, S., ‘The Capital Shortage Illusion’, in Oxford Economic Papers (Oxford), 07 1965.Google Scholar

Page 84 note 2 Investment in Education (Lagos, 1960).Google Scholar

Page 85 note 1 Cf. Denison, op. cit.; Solow, R. M., ‘Technical Change and the Aggregate Production Function’, in The Review of Economics and Statistics (Cambridge, Mass.), XXXIV, 3, 08 1957;Google Scholar and Correa, H., The Economics of Human Resources (Amsterdam, 1963).Google Scholar

Page 85 note 2 Targets for Education in Europe in 1970 (Paris, 1962).Google Scholar

Page 86 note 1 E.g. that, given the time lag between the intake of students and the output of qualified graduates, the minimum time-horizon of a manpower and educational plan is 15—20 years; or that, during the first 5—10 years of independence, demands arisingfrom the (political) need to replace expatriates by nationals exceed the demands created by economic growth.

Page 87 note 1 I.e. to raise G.D.P. by one per cent, high-level manpower as a proportion of the employed population must also rise by one per cent. This is implausible and often clearly impossible; it would imply, for instance, that to double its G.D.P., a country starting with virtually no highlevel manpower at all would have to convert the whole of its labour force into high-level manpower Planners' rules of thumb cannot be proved right, but they can be proved wrong.

Page 88 note 1 The time period is too short to base an educational plan on it; one cannot, by definition, interview employees who do not yet exist; and those interviewed were left free to assume anything they wished about the future rate of growth of national income (on which the demand for their particular commodity depends); their estimates therefore are at best ambiguous and at worse useless for purposes of projection.

Page 88 note 2 Categories 1, 2, and 3 correspond broadly to those with university, post-secondary, and secondary education.

Page 89 note 1 The reader may note that several countries are being compared at a point of time, with a view to deriving conclusions that would be applicable when making projections for one country over a period of time. This procedure must be used with the utmost caution, as it implies that all countries are treading one single growth-path, and is in any case applicable only to the countries ‘in the rear’ but not to the front runners. It also carries the implicit assumption that, in the countries being compared, the stock and composition of manpower was optimal for the given G.N.P. For a more detailed discussion of these issues, cf. Rado, E. R. and Jolly, A. R., ‘The Demand for Manpower: an East African case study,’ in The Journal of Development Studies (London), 1, 3, 04 1965;Google Scholar and Tinbergen, J., Bos, H. C., Blum, J., Emmerij, L., and Williams, G., Econometric Models of Education (Paris, 1965), p. 78.Google Scholar

Page 90 note 1 For an illustration of the estimates of manpower stocks that can be obtained and for their use in statistical analysis of this type, cf. Tinbergen, op. cit.

Page 91 note 1 E.g. if A's G.N.P. is four times that of B's, and A has eight times as many engineers as B, the ‘multiplier’ is eight over four, i.e. 2—hence B ought to increase its engineers twice as fast as its G.D.P.

Page 91 note 2 Cash, Webster C., ‘A Critique of Manpower Planning and Educational Change in Africa,’ in Economic Development and Cultural Change (Chicago), xxv, 1, 10 1965.Google Scholar

Page 92 note 1 To take a likely example: the average earnings of engineers are not independent of their numbers; therefore to calculate in 1966 the probable rate of return on the setting up, in say, 1970, of an engineering school which will start producing engineers in 1975, involves making assumptions about the number and average earnings of engineers in the economy from 1975 to, say, 2025; this involves more than the usual hazardous guesswork of manpower planning.

Page 93 note 1 There is no evidence of a compensating increase in earning opportunities in the agricultural sectors. On employment trends, cf. I.C.F.T.U., The Employment Problem in Tropical Africa (Lagos, 1964).Google Scholar