Here you see a scatterplot of secondary-school enrolment for both genders from 1980 to 1997 and economic growth. If we fit a straight line through the scatter (not shown), the figure shows that a 25 percentage point increase in secondary-school enrolment goes along with a one percentage point rise in the annual rate of growth of GNP per capita. In fact, the relationship is significantly nonlinear, indicating diminishing returns to education. It needs to be emphasized that school enrolment reflects, at best, the quantity of education provided rather than the quality of education received. Public expenditure on education is also positively correlated with economic growth across countries in this sample (not shown), but the correlation is not significant in a statistical sense.
For more, see my paper "Natural resources, education, and economic development" (European Economic Review, May 2001) and the accompanying slide show.
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