Has education had a growth payoff in the MENA region

Abstract

The countries in the Middle East and the North Africa (MENA) have seen an enormous expansion in the educational status of their labor force in the last thirty years. Unquestionably, improved educational levels have had many benefits. But examining the economic data, one sees little evidence that the rapid expansion of educational attainment has provided benefits in increased output. In the MENA countries more rapid expansion of education has not necessarily led to more rapid growth. This micro-macro puzzle raises two important points about education that are relevant for future policies in the region. First, the growth pay-off to education depends critically on the economic environment in which the more educated labor is employed. There were a number of ways in which the strategy did not lead to economic pay-offs from education for the society at large. The strategy of continually expanding public sector employment to accommodate the increased supply of educated workers was neither sustainable nor desirable. Second, the economic pay-off to growth depends on the adaptation of education to the changing demands of the economy. The quality of education must be continually improved if MENA countries are to enjoy dynamic gains in productivity.