Economic Implication of Pursuing Management Education

The role of improved education, the essential part of most development strategies, has become controversial because achievement of expansion in education has not guaranteed improved economic conditions. This paper reviews the role of education in elevating economic well-being, with a special emphasis on the role of quality of education. It establishes strong evidence that the cognitive skills of the population – rather than mere possessing management qualification – are robustly related to the individual earnings, the distribution of income, and the economic growth. New empirical results demonstrate the importance of both the minimal and high level skills, the reciprocities of skills and the quality of economic institutions, and the robustness of the interdependence between skills and growth. International comparisons incorporating the expanded data on cognitive skills display higher business skill deficits compared to generally derived from mere management qualification in the developing countries. The magnitude of change needed makes clear that closing the economic gap with elite B-school will require major structural changes in schooling institutions.