How Much Do Educational Outcomes Matter in OECD Countries?

By Eric A. Hanushek, Ludger Woessmann. Social Science Research Network, 2011

271 citations recorded by the source corpus.

Existing growth research provides little explanation for the very large differences in long-run growth performance across OECD countries. We show that cognitive skills can account for growth differences within the OECD, whereas a range of economic institutions and quantitative measures of tertiary education cannot. Under the growth model estimates and plausible projection parameters, school improvements falling within currently observed performance levels yield very large gains. The present value of OECD aggregate gains through 2090 could be as much as $275 trillion, or 13.8 percent of the discounted value of future GDP. Extensive sensitivity analyses indicate that, while differences between model frameworks and alternative parameter choices make a difference, the economic impact of improved educational outcomes remains enormous. Interestingly, the quantitative difference between an endogenous and neoclassical model framework – with improved skills affecting the long-run growth rate versus just the steady-state income level – matters less than academic discussions suggest. We close by discussing evidence on which education policy reforms may be able to bring about the simulated improvements in educational outcomes.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/22e0cf804bcebbd991388a8c1a48e4fbce0a3d67

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Citations in the corpus

Measuring Success in Education: The Role of Effort on the Test Itself (2017, background): “Relatedly, while low-stakes test performance is highly correlated with economic growth across countries, the United States is an outlier, with higher economic growth than its test scores predict (Hanushek and Woessmann 2011).”
The economic case for education† (2016, background): “First, the review focuses on the situation of modern knowledge-based economies such as the member states of the European Union.2 Second, the paper highlights the importance of the knowledge and skills actually learned (rather than formal educational attainment) as measured by achievement tests such ”
The Impact of Higher Education on Economic Growth in ASEAN-5 Countries (2021, background): “Holland, Liadze, Rienzo, and Wilkinson [2] explained that measures of education can be separated into four groups: (i) stock of human capital usually measured by the average years of schooling, (ii) human capital flows proxied by school enrolment rates, (iii) investment in human capital, which is us”
The long-run impact of human capital on innovation and economic development in the regions of Europe (2018, background): “In consequence, attaining higher levels of educational achievement can potentially translate into spectacular increases in GDP per capita in the future (Hanushek and Woessmann 2011).”
Education and Economic Growth: A Meta-Regression Analysis (2014, methodology): “Furthermore, Hanushek and Woessmann (2011) employing added-variable techniques, show that if scores are ignored from growth regressions, schooling years are significantly related to growth, but when scores are included, schooling years become statistically insignificant.”
The economic impacts of learning losses (2020, background): “Substantial learning differences across countries, closely related to institutional structures of their school systems, indicate that improvements are possible ( (Hanushek and Woessmann, 2011[21]); (Woessmann, 2016[22])).”
Skilled migration and innovation in European industries (2019, background): “In addition However, as emphasized by Hanushek and Woessmann (2011) what matters is the quality of education and the cognitive skills.”
Parents' Attitudes Towards Science and their Children's Science Achievement (2014, methodology): “However, their findings were based on simple correlation coefficients and were limited to families in North Carolina only. Using a multi-level analytical approach and PISA data, Sun et al. (2012) sought to identify factors that can influence science achievement in Hong Kong.”
The Distribution of Teacher Quality and Implications for Policy (2012, methodology): “Using prior estimates of the achievement-growth linkage, Hanushek & Woessmann (2011) suggest that 0.4 standard deviations in gains could translate into a present value of added GDP of some $70 trillion (compared with a US GDP of $15 trillion in 2011).”
Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation (2012, unknown): “…on educational production that these institutional effects on student learning are robust to including regional fixed effects in cross-country analyses, to within-country analyses, and to the use of historical instruments (see Woessmann 2003a; West and Woessmann 2010; Hanushek and Woessmann 2011a).”