Human capital accumulation in emerging Asia, 1970ヨ2030

Emerging Asian economies have made strong progress in improving educational capital in the past 40 years. High educational attainment, especially at the secondary level, has significantly improved emerging Asia’s educational achievement. Regressions show that better parental education and income, lower income inequality, declining fertility, and higher public educational expenditures account for higher educational enrollment. But Asia’s average years of schooling are forecast to increase to 7.6 years by 2030, from 7.0, significantly slower than the increase of 4.1 years from 1970 to 2010. That would put emerging Asia’s educational capital in 2030 at only the 1970 level of the advanced countries, or still 3.5 years behind the level of advanced countries in 2010. For sustained human development, Asian economies must invest in improving educational quality and raising enrollment rates at the secondary and tertiary levels. 2012 Elsevier B.V. All rights reserved. § We thank Jinyoung Kim, Francis Lui and participants in the workshops at the Bank of Korea and the Chinese University of Hong Kong for helpful comments. * Corresponding author. E-mail address: [email protected] (J.-W. Lee). 1 Emerging Asia includes the People’s Republic of China; Hong Kong, China; India; Indonesia; Republic of Korea; Malaysia; Pakistan; Philippines; Singapore; Taipei, China; Thailand; and Viet Nam. Accounting for about 95 percent of developing Asia’s GDP and 86 percent of its population, they represent regional trends well. 2 We focus on educational capital as a main component of human capital. However, human development can be more broadly defined as comprising other factors such as health and skills.