Education Quality and Economic Growth

Eric A. Hanushek and Ludger Woessmann
The World Bank
2007

In this important study for the World Bank, Hanushek and Woessmann argue that a nation's average level of "cognitive skills," as determined by student performance on math and science tests, is a more accurate measure of its human capital than the measures used in previous studies. The authors muster data from international tests dating back to 1964 to compare several nations' levels of cognitive skills to their GDP growth over the same period. (Because different international tests were administered over the years, they tied all the scores to NAEP, thus enabling them to establish a baseline for comparison.) They found, in short, that "countries with higher test scores experienced far higher growth rates." Furthermore, this correlation was significantly stronger than that between a country's growth rate and the years of schooling its students receive, which was a previously favored measure of human capital. Even after controlling for variables like geography, initial economic development, fertility, property rights, openness to international trade, and freedom of domestic markets, the authors found that "a highly skilled work force can raise economic growth by about two-thirds of a percentage point every year." Of course, they didn't account for such intangibles as creativity and innovativeness. Painful experience shows that, put in the wrong hands (those of a Senate committee, say) the researcher's scholarly chisel becomes a policy bludgeon. So read the report here (a summary is here) and if you are moved to send it to your congressman, at least include a copy of Fordham's Beyond the Basics and Common Core's latest report for good measure.

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