Human capital and productivity - AWPA

easoning is supported by Leuven, Lindahl, Oosterbeek and Webbink (2004) who present evidencethat early learning makes subsequent learning easier due to improved foundation skills. 38The importance of earlier education relative to later education is also supported by studies thatexamine learning subsequent to early childhood education. Psacharopoulous (1994), for example,found that primary education generally provided the highest return followed by secondary and tertiary.Likewise, Mason and van Ark (1994) considered that differences in the productivity of engineersbetween two countries were associated with the relative earlier availability of VET in schools.Other studies have found, however, that the relative returns from educational levels depend on aneconomy’s level of development. For example, Sianesi and Van Reenan (2003) and Matton (2006)suggest that tertiary education is most important for advanced economies. 39 The rational for this viewis the link between higher-level education and technology. The link between higher-level educationand technology is discussed in further detail at Section 4. For present purposes, it is sufficient to notethat such findings appear supported by a significant body of literature that finds that the benefits oftechnological change may be biased towards higher skilled individuals.A summary of Sianesi and Van Reenan’s (2003) key findings on the importance of each educationallevel are set out in table 5 below.38 The study found that allowing disadvantaged children to start school one month earlier increases their LLNtest scores in grade 2 on average by about 0.06 of a standard deviation. No effect was found for nondisadvantagedstudents.39 Consistently, the study also suggests that primary and secondary skills appear related to growth in thepoorest and in intermediate developing countries, respectively.Australian Workforce and Productivity Agency | Human capital and productivity literature review 25