Human Capital Formation and School Expansion in Asia: Does a Unique Regional Model Exist?

Abstract

Theories of national development, and in particular endogenous economic growth theories, have focused attention on the northern Asia-Pacific Rim countries. Several factors have been deemed responsible for rapid and sustained economic growth in Japan and the so-called Asian Tigers of Hong Kong, the Republic of Korea, Singapore and Taiwan. Although most accounts of how the growth occurred include some combination of economic, demographic and political factors, all identify the central role played by national human capital formation through the expansion of formal schooling (e.g. Denison and Chung, 1976; Johnson, 1980; Ogawa et al., 1993; World Bank, 1993). The basic development argument holds that these countries compensated for a lack of physical resources by extensive and equitable development of human resources. Human capital development underpinned a set of economic, political and social trends such as productivity growth in agriculture; high rates of manufactured exports; sustained and deep declines in human fertility; high rates of domestic savings; and increases in labor productivity. Together, these form the core of the Japanese and the Asia-Pacific Rim economic development miracle. Preoccupation with the economically successful Asian countries and their human capital emphasis has given rise to the hypothesis that there is a distinctly Asian model of state-sponsored school expansion (e.g. World Bank, 1993; Appelbaum and Henderson, 1992; Johnson, 1980; Ogawa et al., 1993; Kuznets, 1988). This paper investigates this contention: Is there a unique regional Asian model of human capital development that could help developing nations elsewhere to reach growth levels similar to Japan and the Asian tigers? There is ample evidence supporting the basic human capital argument that school expansion significantly contributes to national development. The payoffs from human capital development have been multiple and interconnected in several ways (Williamson, 1991). First, it is clear that the provision of mass education of reasonable quality had an impact on economic growth both for some parts of Asia and elsewhere in the world (Barro, 1989; Oshima, 1980; Rubinson and Ralph, 1984; Walters and Rubinson, 1983). This is particularly the case in terms of a rise in the technical productivity of a labor force. Second, education can influence health and demographic factors that promote the economically favorable trends of lower fertility, lower dependency ratios and so forth (e.g. Caldwell, 1980; Cochrane, 1979). Finally, other individual behaviors such as income investment and savings are associated with high educational attainment. Given this evidence, the central development question is: Which countries invest in school expansion and when? And more specific to the analysis here, is there something unique about the Asian region which produces more school expansion than other regions? Is there something unique in Asian culture and history that leads its nations to more human capital formation than other developing countries? Thirty years of comparative sociological research on the development of the modern nation-state and the unique role that school expansion has played in its development has shown that national educational expansion is not easily predicted (for a review see Rubinson and Fuller, 1993). Substantial educational expansion occurs to some degree worldwide - all nations appear to have some interest in this process (e.g. Meyer et al., 1977). But at the same time, many sociological theories about what causes school expansion have not proven very powerful. Factors such as industrialization, urbanization and class struggle have not provided uniform, worldwide explanations. Within an overall worldwide trend towards more public investment in education, countries which produce higher than average levels of school expansion appear to do so for unique combinations of local conditions. This conclusion suggests that regional models are less likely to be accurate in predicting which nations produce larger than average human capital formation through school expansion. …