GINI Back In the Bottle

The author of the article of the Economist, “GINI BACK IN THE BOTTLE”, stresses out the importance of education in reducing inequality. He says that poverty in Latin America has dropped of 30% and GINI has reduced from 0.54 to 0.5, mainly thanks to improvements in education. He notes: “According to Karla Breceda, Jamele Rigolini and Jaime Saavedra, three economists at the World Bank, Latin American governments, on average, now spend a larger share of GDP on education for the poorest 20% of children than does the United States”. As regard education improvements in Brazil the author underlined the effectiveness of “Bolsa Familia”, the country’s CCT (conditional cash transfer) scheme. “About a quarter of Brazil’s population now gets some money from Bolsa Familia. These stipends cost relatively little (typically 0.2-0.8% of GDP) but influence the priorities of many”: in Rio, for instance, the city gives Bolsa Familia payments to 700,000 of its poorer families. “If children do exceptionally well in exams, a bonus is paid. If they miss school, the payment stops”. He also adds that nowdays people are less dependent on their parents education because better education is “boosting social mobility”. He concludes by saying that improvements in quantity are not enough: an overall change in the quality of education is also needed. “Until the gaps between private and public schools’ quality have been eliminated, educational inequities will persist”.

In the economic literature, several studies have demonstrated that there is a positive relationship between growth and education, because it increases the level of human capital in the economy of a country and, at the same time, produces income redistribution.1

However, other papers have shown that...

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...e future of individuals and growth. For this to be possible, other complementary policies to education are necessary. "I think that learning under the right circumstances is a very good thing, but administrative targets for enrollment rates and overwrought rhetoric from international commissions do not in themselves create the incentive to grow. Education is another magic formula that failed us on the quest for Growth."3

Works Cited

“Education, democracy and growth”, Gilles Saint-Paul and Thierry Verdier, CERAS and DELTA, Paris, France and CEPR, London, UK

2 Education and Economic Growth, E A Hanushek, Stanford University, Stanford, CA, USA and L. Wo¨ ßmann, University of Munich, Munich, Germany, 2010 Elsevier Ltd

3 Easterly, W., 2001, The elusive quest for growth : economists adventures and misadventures in the tropics, Cambridge , Massachusetts: MIT press.