What is the real relationship between education and economic development? THE RELATIONSHIP BETWEEN FORMAL EDUCATION AND ECONOMIC GROWTH IN POOR COUNTRIES IS WIDELY MISUNDERSTOOD BY ECONOMISTS AND POLITICIANS ALIK E. PROGRESS IN BOTH AREAS IS UNDOUBTEDLY NECESSARY FOR THE SOCIAL, POLITICAL AND INTELLECTUAL DEVELOPMENT OF THESE AND ALL OTHER SOCIETIES; HOWEVER, THE CONVENTIONAL VIEW THAT EDUCATION SHOULD BE ONE OF THE VERY HIGHEST PRIORITIES FOR PROMOTING RAPID ECONOMIC DEVELOPMENT IN POOR COUNTRIES IS WRON G. WE ARE FORTUNATE THAT IT IS, BECAUSE BUILDING NEW EDUCATIONAL SYSTEMS THERE AND PUTTING ENOUGH PEOPLE THROUGH THEM TO IMPROVE ECONOMIC PERFORMANCE WOULD REQUIRE TWO OR THREE GENERATIONS. THE FINDINGS OF A RESEARCH INSTITUTION HAVE CONSISTENTLY SHOWN THAT WORKERS IN ALL COUNTRIES CAN BE TRAINED ON THE JOB TO ACHIEVE RADICAL HIGHER PRODUCTIVITY AND RADICALLY HIGHER STANDARDS OF LIVIN G. THE FIRST EVIDENCE FOR THIS IDEA APPEARED IN THE UNITED STATES. NOT LONG AGO, WITH THE COUNTRY ENTERING A RECESSION AND JAPAN AT ITS PRE-BUBBLE PEAK, THE U.S. WORKFORCE WAS DERIDED AS POORLY EDUCATED AND ONE OF THE PRIMARY CAUSES OF THE POOR U.S. ECONOMIC PERFORMANC E. JAPAN WAS, AND REMAINS, THE GLOBAL LEADER IN AUTOMOTIVE-ASSEMBLY PRODUCTIVITY. YET THE RESEARCH REVEALED THAT THE U.S. FACTORIES OF HONDA, NISSAN, AND TOYOTA ACHIEVED ABOUT 95 PERCENT OF THE PRODUCTIVITY OF THEIR JAPANESE COUNTERPARTS AS A RESULT OF THE TRAINING THAT U.S. WORKERS RECEIVED ON THE JO B. MORE RECENTLY, WHILE EXAMINING HOUSING CONSTRUCTION, THE RESEARCHERS DISCOVERED THAT ILLITERATE, NON-ENGLISH-SPEAKING MEXICAN WORKERS IN HOUSTON, TEXAS, CONSISTENTLY MET BEST-PRAC TICE LABOR PRODUCTIVITY STANDARDS DESPITE THE COMPLEXITY OF THE BUILDING INDUSTRY'S WOR K. WE HAVE TO SUSPECT THAT CONTINUING ECONOMIC GROWTH PROMOTES THE DEVELOPMENT OF EDUCATION EVEN WHEN GOVERNMENTS DON'T FORCE IT. AFTER ALL, THAT'S HOW EDUCATION GOT STARTE D. WHEN OUR ANCESTORS WERE HUNTERS AND GATHERERS 10,000 YEARS AGO, THEY DIDN'T HAVE TIME TO WONDER MUCH ABOUT ANYTHING BESIDES FINDING FOO D. ONLY WHEN HUMANITY BEGAN TO GET ITS FOOD IN A MORE PRODUCTIVE WAY WAS THERE TIME FOR OTHER THINGS. AS EDUCATION IMPROVED, HUMANITY'S PRODUCTIVITY POTENTIAL INCREASED AS WELL. WHEN THE COMPETITIVE ENVIRONMENT PUSHED OUR ANCESTORS TO ACHIEVE THAT POTENTIAL, THEY COULD IN TURN AFFORD MORE EDUCATIO N. THIS INCREASINGLY HIGH LEVEL OF EDUCATION IS PROBABLY A NECESSARY, BUT NOT A SUFFICIENT, CONDITION FOR THE COMPLEX POLITICAL SYSTEMS REQUIRED BY ADVANCED ECONOMIC PERFORMANC E. A LACK OF FORMAL EDUCATION, HOWEVER, DOESN'T CONSTRAIN THE ABILITY OF THE DEVELOPING WORLD'S WORKFORCE TO SUBSTANTIALLY IMPROVE PRODUCTIVITY FOR THE FORESEEABLE FUTUR E. ON THE CONTRARY, CONSTRAINTS ON IMPROVING PRODUCTIVITY EXPLAIN WHY EDUCATION ISN'T DEVELOPING MORE QUICKLY THERE THAN IT IS.