Two weeks ago, I wondered why Argentina’s economy had fared so poorly during the 20th century. Argentina’s current income is indeed quite low relative to its income one century ago, but the country’s low income today is less surprising given its education level in 1900. I ended my post with this graph showing the strong correlation between education in 1900 and income in 2000. Argentina in 2000 was doing just about as well as one might expect based on its education level in 1900.Great questions. Follow the link to read Glaeser's thoughts.
But why would education in 1900 correlate so well with income today? Why did the 20th century belong to countries, like the United States, that were investing so much in education a century ago?