» Productivity, Migration and Skills

Productivity, Migration and Skills

July 17, 2022 Sukh Sandhu

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At a national level, the question is: what is the link between education and growth?

That is a question the Productivity Commission is grappling with in the context of our 5-year Productivity Review. It’s not simple and to show why I want to start two claims: one bland and one more controversial.

The bland one is that education is fundamental to equipping people for the high skill jobs of a modern economy. (Among its many other benefits.) The controversial one centres on our prospects for future growth and it is this: it is not clear that high levels of education are making us any more innovative. Because the glaring paradox of our age is that we have never been more highly educated and we have the lowest productivity growth in 50 years.

How can this be, and what should we do about it? I think the challenge that it poses is that education and research, like most good things, have a tendency towards diminishing returns. The policy question is how we might break out of that tendency.

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