What Is The Contribution Of A Student To The Economy

There’s a direct relationship between education and economic development. Merely completing your primary or secondary education doesn’t suffice if you wish to play an important role in economically contributing to society. Substantial investment in human capital eventually leads to sustainable economic development and you’ll see how. But first, what is human capital and why is it important to invest in it? Human capital can be classified as the economic value of a worker’s experience and skills, so the more a company invests in its employees, the more productive and profitable it could be. If you’re interested in understanding the contribution of a student to the economy, this article explains everything you need to know in this regard.

What Is The Role Of Education On The Economy?

If you were to look at the investment in human capital in the nineteenth century or before, you wouldn’t have been able to track much progress in its contribution to the economy. Expenditures on schooling, on-the-job training or apprenticeships, and other similar forms of investment were quite small. However, as years passed by, many countries realized the value of education and how the contribution of a student to the economy could do wonders. Countries started to pay heed to the acquisition of knowledge and its relation to higher standards of living. The twentieth century soon came to be known as the ‘Age of the Human Capital’ with extraordinary expansions in access to basic education in most countries.

How Can Students Contribute To Their Economy?

The growth of an economy is based on two major factors, namely:

• The amount of capital invested in the country
• The productivity of citizens in the country

The contribution of a student to the economy is linked to the second factor. So what can you as a student possibly do to create an impact on economic growth? As increasing numbers of students complete their basic education, their demand for education at higher levels is similarly increasing. Previous studies have shown handsome returns to various forms of human capital accumulation: basic education, research, training, learning-by-doing, and aptitude building.

We are all well aware that governments, businesses, and banks — all contribute to economic growth. But the big question here is: How can a student impact the economy as an individual? Here’s how it goes.

Getting Valuable Education

The first and foremost step that you can do as a student would be to gain valuable education in your respective fields of interest. The more skilled a population is, the more productive, competitive, and autonomous a country can be. For instance, with the right kind of education and expertise:

• Food security can be ensured by boosting agricultural production
• More goods can be manufactured and exported
• Natural resources can be safely exploited and transformed locally

However, with minimal or no education in a country, because there’s a dearth of students like you who wish to educate themselves, companies will have to resort to outsourcing their services to foreign contractors, and importing of goods and services will be done at massive rates and expensive prices. Your role in the contribution of a student to the economy would be to gain education in a profession or a sector that is in demand. In such cases, you will not only increase your chances of landing a highly paid job, but you will also notice the contribution of education to economic growth.

Consume Local Goods And Services

Let me ask you a question. If you were earning a decent sum of money where you could easily afford a $5 t-shirt, would you buy a local t-shirt that costs you $5 or the same foreign branded t-shirt for $1? Here’s how I’ll clarify it. Since you can afford a 5-dollar t-shirt; by choosing the local t-shirt, you would have made a positive impact on the economy. The contribution of a student to the economy with this decision of yours would be a three-fold benefit:

• The money derived from your purchase stays in the local economy
• Domestic jobs were compensated
• You just encouraged a small business

Live Within Your Means

You must be a student who has decided to pursue your education abroad with the help of a student loan. Since you are in debt and you have a certain amount to pay off, once you start earning, you must make sure that your disposable income is more than your debt. In that way, you will be less vulnerable to economic downturns. Always keep a tab of your expenditures and save a part of your income as and when possible. If your debts are higher than your savings, investments, or properties, then you’re going to find yourself in a problematic situation in case of price fluctuations, sudden drops in house prices, and any other downturn of events.

Pay Your Taxes

With proper education, you will gain knowledge on the importance of paying taxes on time, which will not only benefit you but will also be a major source of income for the government in the long run. Along with exports, taxation is a major source of revenue, without which the government cannot invest in infrastructure or social programmes that are essential to run the country. You paying your taxes on time will be a major contribution of a student to the economy. This is because sales taxes, income taxes, payroll taxes, and wealth taxes are all contributions we make to the economy to improve the collective standard of living. This includes benefiting from better roads, schools, hospitals, and a welfare system.

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