Raghuram Rajan suggests that inequality is the root cause of the financial crisis in America and the lack of educational opportunities is one of the reasons for the inequality.
Since the 1970s, wages for workers at the 90th percentile of the wage distribution in the US—such as office managers—have grown much faster than wages for the median worker (at the 50th percentile) such as factory workers and office assistants. A number of factors are responsible for the growth in the 90/50 differential.
Perhaps the most important is that technological progress in the US requires the labour force to have ever greater skills. A high school diploma was sufficient for office workers 40 years ago, whereas an undergraduate degree is barely sufficient today. But the education system has been unable to provide enough of the labour force with the necessary education. The reasons range from indifferent nutrition, socialization, and early-childhood learning to dysfunctional primary and secondary schools that leave too many Americans unprepared for college.
Rajan feels inequality is increasing in India too.
What I worry about India, however, is the problem of inequality. The rural areas, in many ways, are falling behind because they are not connected to the urban and coastal areas. Many of the ones that are backward do not have access to education, healthcare. It is very much a thing that the US has; so, in that sense, while 8-10% growth is fantastic, we also need to figure out how to expand opportunities for those being left behind.
One couldn't agree more on expanding educational opportunities as quickly as possible. There is no alternative to expanding the supply of affordable, quality schooling to ensure education for all children. The argument about the means (public vs private funding, non-profit vs for-profit etc..) to that end has been going on and on. If we don't begin to work towards the end soon enough, through what ever means, the demographic dividend will turn out to be a demographic disaster. Sadly, there doesn't seem to be any light at the end of the tunnel. At least, not yet. Maybe things have to get worse before they can get better.