Effect of Education on Economy
How Education And Training Affect The Economy
February 25 2012| Filed Under » Economics, Post-Secondary Education, Young Investors
Why do most workers with college degrees earn so much more than those without? How does a nation's education system relate to its economic performance? Knowing how education and training interact with the economy can help you better understand why some workers, businesses and economies flourish, while others falter.
See: Keeping Up With Your Continuing Education
As the labor supply increases, more pressure is placed on the wage rate. If the demand for labor by employers does not keep up with the supply of labor, then the wage rate will be depressed. This is particularly harmful for employees working in industries that have low barriers to entry for new employees, i.e. they do not have high education or training requirements. Industries with higher requirements tend to pay workers higher wages, both because there is a smaller labor supply capable of operating in those industries and because the required education and training carries significant costs.
The Advantages of Education to a Nation
Globalization and international trade requires countries and their economies to compete with each other. Economically successful countries will hold competitive and comparative advantages over other economies, though a single country rarely specializes in a particular industry. This means that the country's economy will be made of various industries that will have different advantages and disadvantages in the global marketplace. The education and training of a country's workers is a major factor in determining just how well the country's economy will do.
The study of the economics of training and education involves an analysis of the economy as a whole, of employers and of workers. Two major concepts that influence the wage rate are training and education. In general, well-trained workers tend to be more productive and earn more money
February 25 2012| Filed Under » Economics, Post-Secondary Education, Young Investors
Why do most workers with college degrees earn so much more than those without? How does a nation's education system relate to its economic performance? Knowing how education and training interact with the economy can help you better understand why some workers, businesses and economies flourish, while others falter.
See: Keeping Up With Your Continuing Education
As the labor supply increases, more pressure is placed on the wage rate. If the demand for labor by employers does not keep up with the supply of labor, then the wage rate will be depressed. This is particularly harmful for employees working in industries that have low barriers to entry for new employees, i.e. they do not have high education or training requirements. Industries with higher requirements tend to pay workers higher wages, both because there is a smaller labor supply capable of operating in those industries and because the required education and training carries significant costs.
The Advantages of Education to a Nation
Globalization and international trade requires countries and their economies to compete with each other. Economically successful countries will hold competitive and comparative advantages over other economies, though a single country rarely specializes in a particular industry. This means that the country's economy will be made of various industries that will have different advantages and disadvantages in the global marketplace. The education and training of a country's workers is a major factor in determining just how well the country's economy will do.
The study of the economics of training and education involves an analysis of the economy as a whole, of employers and of workers. Two major concepts that influence the wage rate are training and education. In general, well-trained workers tend to be more productive and earn more money