Data Introduction

variables,data and their sources:

- wealth of a nation = GDP per capita, GDP

- quality of education = PISA test results (reading, math, science)

- mean years of schooling

- level of education = percentage of adults with tertiary,secondary,itd education

- government spending on education = % of GDP spent on education

- private spending on education = % of GDP spent onm education

- employment rate by education level = % of 25-64 year old in employment

- unemployment rate by education level = % of 25-64 year old unemployed

Source: OECD data library: https://data.oecd.org/

Source for mean years of schooling: Our world in data:https://ourworldindata.org/grapher/mean-years-of-schooling

Research Questions

1) Are quality of education and the general wealth of a nation connected?

2) Can public and private spending improve the education level in a country?

3) Can the level of education improve an individual’s welfare?

1) Education quality and GDP

Does better education also mean a higher GDP per capita?

positive correlation – better education means higher GDP per capita

What happens if we divide it by developed and developing countires?

Better education is strongly correlated with higher GDP per capita. - for developing countries

Interestingly, the connection is negative for developed countries.

However, we find explanation in the literature. Krueger and Lindahl (2001): a country with already high levels of human capital has lower marginal benefits from education

Is there are problem of overschooling?

marginal utility of schooling = 0 at 7.5 years, above that -> overschooling

Interpretation

Education does positively affect GDP per capita, however the effect is stronger in countries with lower level of human capital.

2) Public Expenditure and Education

Divided by Developed & Developing with Country Code

Point Plot with Regression: Relationship between Public Spending on Education and PISA Scores

Graph Analysis

Developed countries: all scores are higher. Lower variance. Scores are constant regardless of public spending amount.

Developing countries: all scores are lower. Higher variance.

Connection between public spending and adult education level

Graph Analysis

Below upper secondary: higher for developing countries, lower for developed countries. No meaningful correlation found for either types of countries.

Upper secondary: lower for developing countries, higher for developed countries. No meaningful correlation found for either types of countries.

Tertiary: lower for developing countries, higher for developed countries. Weak positive correlation for developed countries only.

Interpretation

Developed countries

More public spending on education → higher adult education levels.

PISA scores constantly higher regardless of public spending on education.

Developing countries

More public spending on education → NOT higher adult education levels.

PISA scores generally lower and highly vary.

Important Notes

Both developing and developed countries spend at least 2% of their GDP on education in general.
There is no strong correlation that spending more on education necessarily results in higher educational attainment.

3) Private Expenditure and Education

Does Private Expenditure on Education affect the GDP?

Two datasets, education expenditure and GDP were used.For GDP, we used MLN_USD of USD_CAP because we wanted to compare between absolute values.

cor(expen_GDP$GDP_val, expen_GDP$expen)

## [1] 0.6849144

cor(expen_GDP2$GDP_val, expen_GDP2$EARLYCHILDEDU, use="complete.obs")

## [1] 0.8639771

cor(expen_GDP2$GDP_val, expen_GDP2$PRY_TRY, use="complete.obs")

## [1] 0.968626

cor(expen_GDP2$GDP_val, expen_GDP2$SRY, use="complete.obs")

## [1] 0.9039069

cor(expen_GDP2$GDP_val, expen_GDP2$PRY_NTRY, use="complete.obs")

## [1] 0.9358781

cor(expen_GDP2$GDP_val, expen_GDP2$TRY, use="complete.obs")

## [1] 0.9594817

What the graph tells us There is a high relationship between each level of education and GDP.

Interpretation Those with high education expenditure tend to have a higher GDP.

Is there a relationship between development level and expenditure on education?

We decided to bring country development level into the picture as well. We used country development grouping, provided by the UN.

What the graph tells us There isn’t a very high relationship between development level and education.

What effect does private expenditure on tertiary education have on education levels(by % of adults with teritary education)

Adult education level was used, on top of the previous datasets, to answer this question.

What the graph tells us Developed countries have higher median, and larger tertiary education expenditure in general.

Interpretation Developed countries have various ways of life, and have higher chance for education.

4) Employment and Education

Unemployment rate falls as education attainment level gets higher.

summary(unemp)

##       YEAR         BUPPSRY         UPPSRY_NTRY          TRY         
##  Min.   :2000   Min.   : 0.3252   Min.   : 1.285   Min.   : 0.9021  
##  1st Qu.:2006   1st Qu.: 6.2778   1st Qu.: 3.931   1st Qu.: 2.8269  
##  Median :2011   Median : 9.2216   Median : 5.837   Median : 3.7370  
##  Mean   :2011   Mean   :11.1051   Mean   : 6.865   Mean   : 4.3355  
##  3rd Qu.:2016   3rd Qu.:13.3092   3rd Qu.: 8.274   3rd Qu.: 5.0565  
##  Max.   :2021   Max.   :49.1624   Max.   :28.133   Max.   :19.4091  
##                 NA's   :22        NA's   :22

Employment rate rises as education attainment level gets higher.

summary(emp)

##       YEAR         BUPPSRY       UPPSRY_NTRY         TRY       
##  Min.   :2000   Min.   :26.28   Min.   :37.79   Min.   :37.07  
##  1st Qu.:2006   1st Qu.:49.25   1st Qu.:70.32   1st Qu.:81.44  
##  Median :2011   Median :56.61   Median :73.82   Median :84.15  
##  Mean   :2011   Mean   :55.98   Mean   :73.13   Mean   :82.68  
##  3rd Qu.:2016   3rd Qu.:63.01   3rd Qu.:78.72   3rd Qu.:86.49  
##  Max.   :2021   Max.   :98.68   Max.   :97.94   Max.   :97.34  
##                 NA's   :22      NA's   :22

Unemployment rate and Employment rate by education attainment level in time-series

4 countries were chosen from each developed and developing countries: classified according to UN [World Economics and Situation Prospect]

Developed countries: United Kingdom, United States, Germany, Canada
Developing countries: Korea, Costa Rica, Brazil, Turkey

Unemployment rate
Those with higher education level tend to have a lower unemployment rate for developed countries, but there is no distinct relationship for developing countries.

Employment rate
Those with higher education level tend to have a higher employment rate, and this relationship is stronger for the developed countries.

Comparing the education levels within each country type

To show the difference between developed and developing countries more clearly, we made a box plot.
(27 countries in developed and 10 countries in developing)

What the graph tells us

Inter-quartile range: comparatively shorter with higher education level → more similar

Unemployment rate
Developed: higher education level, lower unemployment rate
Developing: in the similar range.
However, the median of upper secondary > below upper secondary

Employment rate
Higher education levels, higher employment rate.
Developed: large difference between below upper secondary & upper secondary
Developing: below upper secondary education comparatively tall → differ more

Interpretation

Developed: higher education level → more likely to be employed,
below upper secondary education → especially more difficult to get a job

Developing: The unemployment rate for upper secondary education > below upper secondary education,
because of a “mismatch” between skilled persons and the number of available jobs matching their competencies and expectations in lower-income countries (referenced from UN article).

Comparing developed and developing countries in each education levels

What the graph tells us

Inter-quartile range: comparatively taller for developing countries → differ more (but should be aware)

Unemployment rate
Below upper secondary: developing < developed
Upper secondary: similar
Tertiary: similar (developing > developed)

Employment rate
Below upper secondary: developing > developed
Other education levels: developing < developed

Interpretation

Below upper secondary in developing → more likely to be employed than in developed
Higher education levels in developed → more likely to be employed than in developing

Overall, those with higher education are more likely to be employed.
This is especially true in developed countries.

Conclusion

1. Are quality of education and general wealth of a nation connected?

Yes, education positively affects GDP per Capita. Effect is stronger in countries with lower levels of human capital.

2. Can public and private spending improve the education level in a country?

Ambiguous, so difficult to draw a strong conclusion for spendings in general.

3. Can the level of education improve an individual’s welfare?

Yes, level of education can improve individual’s welfare

References

Krueger, A.B. and Lindahl, M. (2001), “Education for growth: why and for whom?”, Journal of Economic Literature, Vol. 39 No. 4, pp. 1101-1136.

United Nations. (2015, November 17). Access to higher education doesn’t always lead to lower unemployment – UN Labour agency | | UN news. United Nations. Retrieved from https://news.un.org/en/story/2015/11/515702-access-higher-education-doesnt-always-lead-lower-unemployment-un-labour-agency

OECD (2022), Public spending on education (indicator). doi: 10.1787/f99b45d0-en (Accessed on 26 May 2022)

OECD (2022), Adult education level (indicator). doi: 10.1787/36bce3fe-en (Accessed on 26 May 2022)

OECD (2022), Mathematics performance (PISA) (indicator). doi: 10.1787/04711c74-en (Accessed on 26 May 2022)

OECD (2022), Reading performance (PISA) (indicator). doi: 10.1787/79913c69-en (Accessed on 26 May 2022)

OECD (2022), Science performance (PISA) (indicator). doi: 10.1787/91952204-en (Accessed on 26 May 2022)

OECD (2022), Private spending on education (indicator). doi: 10.1787/6e70bede-en (Accessed on 03 June 2022)

OECD (2022), Employment by education level (indicator). doi: 10.1787/26f676c7-en (Accessed on 03 June 2022

OECD (2022), Gross domestic product (GDP) (indicator). doi: 10.1787/dc2f7aec-en (Accessed on 03 June 2022)

Lee-Lee (2016); Barro-Lee (2018) and UNDP HDR (2018). Mean years of total schooling across all education levels. 1870 – 2017. http://www.barrolee.com/Lee_Lee_LRdata_dn.htm; http://www.barrolee.com/data/yrsch2.htm; and http://hdr.undp.org/en/indicators/103006. (accessed on 03 June 2022)

Is education important for people’s lives?

The Data Pirates

2022-06-03

Data Introduction

variables,data and their sources:

- wealth of a nation = GDP per capita, GDP

- quality of education = PISA test results (reading, math, science)

- mean years of schooling

- level of education = percentage of adults with tertiary,secondary,itd education

- government spending on education = % of GDP spent on education

- private spending on education = % of GDP spent onm education

- employment rate by education level = % of 25-64 year old in employment

- unemployment rate by education level = % of 25-64 year old unemployed

Research Questions

1) Are quality of education and the general wealth of a nation connected?

2) Can public and private spending improve the education level in a country?

3) Can the level of education improve an individual’s welfare?

1) Education quality and GDP

Does better education also mean a higher GDP per capita?

positive correlation – better education means higher GDP per capita

What happens if we divide it by developed and developing countires?

Interestingly, the connection is negative for developed countries.

However, we find explanation in the literature. Krueger and Lindahl (2001): a country with already high levels of human capital has lower marginal benefits from education

Is there are problem of overschooling?

marginal utility of schooling = 0 at 7.5 years, above that -> overschooling

Interpretation

Education does positively affect GDP per capita, however the effect is stronger in countries with lower level of human capital.

2) Public Expenditure and Education

Divided by Developed & Developing with Country Code

Point Plot with Regression: Relationship between Public Spending on Education and PISA Scores

Connection between public spending and adult education level

Interpretation

Important Notes

3) Private Expenditure and Education

Does Private Expenditure on Education affect the GDP?

Is there a relationship between development level and expenditure on education?

What effect does private expenditure on tertiary education have on education levels(by % of adults with teritary education)

4) Employment and Education

Unemployment rate and Employment rate by education attainment level in time-series

Comparing the education levels within each country type

Comparing developed and developing countries in each education levels

Conclusion

1. Are quality of education and general wealth of a nation connected?

2. Can public and private spending improve the education level in a country?

3. Can the level of education improve an individual’s welfare?

References