Education Policy and Industrial Development: The Cases of Korea and Mexico

Abstract

After many scholars studies, it has been suggested that among several facts of economic growth, Koreas relatively intensive investment in education made its fast economic growth possible. This study started from the question of whether large education expenditure automatically leads to a fast economic growth. We suggest that the expenditure must be allocated to the education level that is in accordance with the industrial policy, which in turn must consist with the countrys economic development stage. In Korea, the education sector supplied workers with adequate level of education that was required in each stage of development, whereas in Mexico, the supply of workers by education level was mismatched with the demand for labor derived from the industrial structure at each development stage. We conclude that not only the size of the expenditure but also its efficient use is important to guarantee the positive effects of education expenditure on economic growth.