Diagnosis: the problems of education in the UK

Both economic theory and empirical evidence show that in the long run, human capital is a critical input for growth. The growth dividend from upgrading human capital is potentially enormous and improving the quality of compulsory education is the key to achieving these gains. Evidence suggests that increasing UK school standards moderately (say, to the level of Australia or Germany) could put us on a growth path that would more than double long-term average incomes compared with current trends. An even more ambitious target – to raise our educational standards to those of leaders, such as Finland – would generate even more spectacular gains. It is important, therefore, to frame debates about improving school quality as a growth issue.