There is a presumption among many policy makers that higher education is not necessary for economic growth and development; it is literacy and basic education and at best secondary education that are argued to be important. Estimates of internal rate of return contributed to strengthening of such a presumption. Accordingly, higher education has not figured on the poverty reduction agenda of many poor countries and of the international development organisations. The available limited research evidence shows this is not a correct presumption. However, most of the research concentrates on analyzing the role of literacy and basic education in development--economic growth, poverty reduction and social development, and the role of higher education in economic growth, not in poverty reduction and social development. The article uses most recently available secondary data on higher education and economic growth, poverty reduction and human development indicators such as infant mortality and life expectancy. With the help of regression analysis of data on a large cross section of countries--developing and developed--it analyses the relationship between post basic education and development indicators. The simple analysis attempted here leads us to conclude that higher education plays a significant role in development. It argues that though the contribution of higher education to development is quite significant, many developing countries do not pay adequate attention to it. (Contains 10 tables and 2 figures.)