Educational attainment, growth and poverty reduction within the MDG framework: simulations and costing for the Peruvian case

We propose a model that accounts for the feedback between access to educational services, human capital accumulation and long-run GDP growth. With this framework, it is possible to simultaneously assess the achievement of Millennium Development Goal (MDG) education targets in terms of their impact on aggregate income growth and poverty incidence. We simulate our model using Peruvian data and different planner preferences regarding access to distinct education cycles. Results reveal that to attain a significant impact on GDP growth and poverty reduction, Peru needs to extend the original set of MDG indicators to account for access to higher education levels besides primary.