One of the most important challenges that the modern economy must face is how it will respond to the demand for knowledge demanded by the labor market and the expansion of technology.
This response is given by ensuring that societies not only invest all their necessary resources in education, but also combine them in the most efficient and effective way possible.
Education goes from being a form of consumption to being seen as an investment and as one of the main pillars of economic development. The human working capital accumulated with Education is essential to improve not only individual economic prosperity, but also the prosperity of society as a whole, thus we can see an economic discipline known as “Economics of Education”.
We must bear in mind that the consequences of Education are a form of human capital.
When we talk about human capital, we consider knowledge as one more factor in the production process. The higher the level of training, the greater the ability to generate goods and services, and consequently, your salary will also grow. Education has an incalculable value which is its great ability to increase the productivity of workers.
More educated people earn higher wages, experience lower unemployment, and work in more prestigious occupations than less educated people. That is, there is a growing perception that education plays a fundamental role in the modern analysis of the labor economy and human capital.
In our country, a significant sector of the population is unable to obtain a good job due to their low educational level. A person with low educational levels has a higher unemployment rate than someone with complete university studies. According to INDEC, 27% of wage earners have graduated university studies, while only 11% are unemployed.
These indexes lead me to the conclusion that those people who achieve higher educational levels generally receive higher salaries. In this way, I understand that people who educate themselves by investing their time, travel expenses, material costs, etc. in your present, (Economics of Individual Education), their objective, being the cause, the transformation of that investment into greater profitability in the future, (Economics of Collective Education) and, therefore, perceive greater individual earnings, greater productivity of goods and services and a better quality of social life.
Here we see the accumulated of the main factor of production of goods and services:
Human Capital, as the sum of Investment in Knowledge (Education) + Consequences of applied knowledge (Experience), the immediate result of which is: Job growth, better wages and high levels of quality of life in a society.
Getting educated represents an investment in that you give up working in the present to work better and be more productive in the future.
Education is an investment good and, as such, constitutes a contribution to economic development. This investment can result in several types of benefits that, although they are interconnected, are analytically distinguishable such as:
- Increase of knowledge (Education) and skills (Experience) that increase the factors of production;
- Growth of the national product (benefit for the country) and individual income (better wages);
- Decrease in the time required to access the labor market, which benefits both the individual and society.
As we can understand, one of the main challenges of the labor economy is to meet the growing demand for knowledge required by the labor market, new labor modalities, the advancement and expansion of technology and globalization.
