CHART: The More Natural Resources Your Country Has, The Less Educated Your People Will Be

There has long been circumstantial evidence that developing economies rich in natural resources like oil can often struggle to develop economies based on human capital to sustain symmetric growth in the long term.

A study from the OECD appears to support the conjecture that there’s an inverse relationship between “money countries extract from national resources and the knowledge and skills of their school population”—particularly in the developing world.

It compares a student’s PISA maths score—the OECD’s international standardized test—and a country’s advantage at producing natural resources. There are some developed world exceptions, however Andreas Schleicher, the OECD’s Deputy Director of Education, points out that countries like Norway, Australia, and Canada have all developed systems to save and reroute natural resource rents to education and other industries.

He opines that this study has important implications, not only in the developing world but in advanced economies:

Particularly in these times of economic difficulties, it is tempting to resource our standard of living today through incurring even greater financial liabilities for the future. But in the long term, there is no way to stimulate our way out or to print money our way out. The only sustainable way is to grow our way out, and that requires giving more people the skills to compete, collaborate and connect in ways that drive our economies forward. Without sufficient investment in skills people languish on the margins of society, technological progress does not translate into productivity growth, and countries can no longer compete in an increasingly knowledge-based global economy.

Thus he concludes, “knowledge and skills are infinite—oil is not.” Check out the OECD chart below:

oil and knowledge from the oecd

Photo: OECD

Read Schleicher’s full assessment of the study on the OECD’s education blog >

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