Edgar Momplaisir says the development of human abilities and knowledge of the population or labor force is referred to as education. The key to economic progress is not only the quantitative increase of educational opportunities but also the qualitative enhancement of the sort of education delivered to the labor force. Education has been referred to as human capital because of its substantial contribution to economic development, and expenditure on people's education has been referred to as beneficial for the nation.

Human beings are the active agents who acquire capital, exploit natural resources, construct social, economic, and political organizations, and advance country development. A country that is unable to grow its people's skills and knowledge and effectively apply them in the public economy will not be able to foster whatever else.

Education and Economic Growth

Several empirical research on the developing nations, or, in other sentences, the efforts made by numerous aspects such as capital, man-hours, literacy developed nations, particularly the United States. Between 1909 and 1949, the residual factor, which represents the effect of technological progress and the improvement in the quality of labor, primarily as a result of education, accounted for 57.5 percent of the growth in output per man-hour in the United States. this residual element determines the increase in total output due to quantifiable capital and labor inputs (man-hours). We then subtracted this figure from total output to obtain the residual factor contribution, which indicated the effect of education and technical advancement, both of which are physically immeasurable elements.

Aspects of economic growth

The contribution of numerous aspects to economic growth has been refined further by American economists. Denison attempted to separate and quantify the contributions of several 'residual component' parts. According to Denison's estimations, over the period 1929-1982 in the United States, when total national output expanded at a pace of 2.9 percent per year, increases in labor input accounted for 32 percent of the total, while productivity per worker accounted for the remaining 68 percent. He next calculated the contributions of per-worker education, capital formation, technological progress, and scale economies. Denison discovered that technological progress contributed 28% points to growth in output due to increased labor productivity, 19% points to capital creation, 14% points to worker education, and 9% points to economies of scale. As a result, it is apparent that education and technological progress together contributed 42 percent to national output growth.

Expenditure on education

Another method for calculating education's contribution is to look at the relationship between educational spending and income as per Edgar Momplaisir. He used this method to investigate the relationship between education spending and consumer income, as well as the relationship between education spending and physical capital production in the United States from 1900 to 1956. He discovered that the resources allocated to education climbed nearly three and a half times relative to consumer income in dollars, compared to the gross production of physical capital in dollars when measured in constant dollars.

This implies that the interest for training had an "income elasticity" of roughly 3.5 over the period, or in other words, education as an investment was 3.5 times more appealing than physical capital investment. It should be highlighted, however, that Schultz's figures only reflect the contribution of education to economic growth in a tangential way. Until recently, economists regarded physical capital as the most important determinant of economic growth, proposing that the rate of physical capital formation in emerging countries be boosted to speed up the process of economic growth and raise people's living standards. However, economic research over the last three decades has demonstrated the relevance of education as a critical determinant in economic development according to Edgar Momplaisir.