Goldin and Katz make a common sense case, backed by masses of data, that the amount and quality of education in a society needs to keep up with, or preferably stay ahead of the demand for skilled, educated workers, and that that demand is largely dictated by the type and amount of technology that dominates that particular economy. Where this is true, economic growth tends to be high. Obvious examples include the US through 1980; western Europe, Japan, Singapore, and Taiwan since WWII; South Korea since 1970; and China since 1990.
It’s pertinent, of course, that ALL of the other countries were explicitly emulating the the US model. After the US emerged as an economic colossus, everyone wanted to know our secret, and the general conclusion was that we got rich because we practiced universal education. Since that time, all of these nations have vastly increased their support for high-quality universal eduction. Meanwhile, the US has allowed its system to stagnate or deteriorate.
The most obvious problem with the book is that the authors are forced to rely on historical data, and therefore have to put a lot of emphasis on years of schooling, which they readily acknowledge is a crude and imperfect measure of actual education. They make a considerable effort to deal with this problem, but the underlying problem is inevitable given the lack of better data.
In fact, extensive reading in modern sources suggests that the authors’ reliance on such data does not overstate the problem, but in fact understates it. The dumbing down of standards in most states has meant that today’s high school grads are substantially less well prepared for college and for life. By a charitable estimate, at least a quarter of our recent high school grads are getting no more than what would traditionally have been called a “tenth grade education.”