It is often believed that high cost of education is the means by which various nations are able to maintain high levels of economic growth. Besides, empirical analyses also supports the belief that poor nations need to grow much more rapidly as compared to richer nations as they will be able to master and reuse the new technologies which are already used by rich nations. But in order to remain competitive, it is important to have qualified and competent managers and engineers who will be able to handle the new technology and implement the new trends effectively. Hence, a nation’s capability to master from leading nations also depends on its ‘human capital’. Surveys and studies in this direction have revealed the significance of fundamental economic institutions and the importance of mastering cognitive skills.
At an individual level, there is a lot of information and content about the work of Jacob Mincer regarding the manner in which earning is connected to schooling and similar human capital. This has inspired various studies, albeit this work is rife with controversies. One of the main controversies was regarding the manner in which the impact of schooling could be interpreted accurately. At times students with great learning potential and having a very high IQ level are not able to get optimum academically due to financial constraints.
In the year 1976 two well known economists Samuel Bowles & Herbert Gintis stated that there was an ongoing conflict in American schools due to the democratic, equality based goals and the discrepancies indicated by the ongoing profitability of capitalist productions.