Knowledge is power in the modern world. The same general trends that I indicated for the United States are found in Western Europe. Lack of human capital development tends to show up more in Europe in increasing unemployment. In 1980, United States unemployment was much above that in Germany, France, Sweden, and many other Western European countries. There has been a complete reversal since then.
Similar numbers apply in most of the Netherlands and Belgium.
Education and training not only promote growth and efficiency, but they can reduce inequality and the impact of disadvantaged backgrounds. Education is the most effective way for able young people of poor backgrounds to rise in the economic hierarchy, because human capital is the main asset of 90 percent of the population. This is why income inequality in a nation is greater when inequality in education is greater. It is not surprising, therefore, that the increased inequality in incomes in the United States since the mid-seventies has been caused in good part by larger returns to schooling and other training, and that many countries, like Mexico and Brazil, have major pockets of poverty related to regional disparities in opportunities for education. One has to start with the family.