Tuesday, May 10, 2011

Poor Economics

Abhijit Banerjee and Esther Duflo have written a book titled "Poor Economics: A Radical Rethinking of The Way to Fight Global Poverty." The New York Times' ECONOMIX blog contributor David Leonhardt did an interview with the duo. Here is an excerpt:

Q. You write about the strong evidence of the importance of education: the big income gains after Indonesia went on a school-building spree; the income gains and mortality reduction after Taiwan made school mandatory; the declines in teenage pregnancy among more educated girls in Malawi and Kenya, to name just a few examples. But there are definitely still education skeptics, some of whom point out that Africa has become far more educated over the past generation without become far richer. How do you respond to the point that more education doesn’t always lead to much faster economic growth?


A. It is not clear that the skeptics have always thought carefully about the alternative: what would have happened had Africa not invested in education. Would things have been even worse? I don’t know the answer, but that is the reason why these comparisons are inherently difficult to interpret. When you compare individuals, rather than countries, you find that education improves both income and the quality of life.

You can read the entire conversation with the two MIT economists at the Economix blog.

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