I frequently have my undergrad and grad students read Bill Easterly’s excellent book, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. They are often a bit depressed after reading the chapters on growth, noting how little we seem to know about growth in the real world. It is the education chapter, however, which really gets to them. In it, Easterly points out what has been known for ages but is rarely mentioned in print (see Lant Pritchett’s “Where has all the education gone?” for a refreshing exception), namely, that education is not positively and significantly related to economic growth for most samples. Sometimes you can find a weakly positive t-stat in a sample of OECD countries, but you are lucky if you merely find zero correlation (instead of a negative and significant) in the developing world.
Related www.wisconsin2.org.