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Education has been used in models of both econometricians and sociologists to explain differences in the speed of economic development. This important field of research is, however, theoretically underspecified, and the empirical tests have remained incomplete for they only model the direct effects of education suggested by the human capital school. This article complements this individualistic view by also considering functions of education stressed in sociology. The educational system is seen as a device to integrate society and legitimize socioeconomic inequality. Such a perspective allows one to consider both cohesion as well as socioeconomic conflict as mediating between public educational expenditure and economic achievement; this translates into a model that contains direct as well as indirect effects. The resulting proposition of a 'double dividend' of education in development suggests that in the short and medium term the educational efforts of governments may contribute to legitimizing society which is reflected in tempering socioeconomic conflict. This again fosters economic growth via greater motivation of citizens and higher propensity to invest. In this article, the double-dividend thesis is corroborated in an empirical test using a sample of 83 societies. [ABSTRACT FROM AUTHOR]