South Asia Regional Conference on Education Quality Schooling Quality and Economic Growth Eric A. Hanushek Stanford University
Mar 27, 2015
South Asia Regional Conference on
Education Quality Schooling Quality and Economic Growth
Eric A. HanushekStanford University
Importance of Human Capital Policy Focus Traditional emphasis on school attainment Development of access programs
Centerpiece of Millennium Development Goals Education for All initiative
Some clear successes and some continuing challenges
New evidence that QUALITY is the primary issue
Overview of Discussion
Importance of quality (cognitive skills) Economic growth Individual earnings Distributional outcomes
Policy actions and reform Resource policies Supply side incentives Demand side incentives
Importance of information
School Expectancy, 2001 Total Male Female
World 10.3 10.7 9.8
Countries in transition 12.5 12.2 12.6
Developed countries 15.9 15.2 16.4
Developing countries 9.5 10.1 8.9
Arab States 10.0 10.6 9.4
Central and Eastern Europe 12.7 12.7 12.7
Central Asia 11.4 11.5 11.3
East Asia and the Pacific 10.9 11.3 10.5
Latin America and the Caribbean 13.0 12.7 13.2
North America and Western Europe
16.3 15.4 16.8
South and West Asia 8.6 9.5 7.6
Sub-Saharan Africa 7.1 7.6 6.4
Measuring knowledge, not sitting in the classroom International agencies have conducted many
international tests of students’ performance in cognitive skills since mid-1960s
12 testing occasions 36 separate test observations (age levels, subjects)
Require rescaling to obtain combined measure Adjust mean and variance of separate
Cognitive Skills: International Student Achievement Tests
International Achievement
Source: Hanushek and Wößmann (2007).
International Achievement
International Achievement
Education Quality and Economic
Growth
Quantity of Schooling
Without quality control
With quality control
Education Quality and Openness
0
0.5
1
1.5
2
2.5
3
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Effect of test score on growth
Openness
Estimated effect of test scores on average annual rate of growth of real GDP per capita in 1960-2000,
depending on degree of openness to international trade of a country. Source: Hanushek and Wößmann (2007).
Implications of Reform
Speed of reform 10, 20, 30 years
Magnitude of reform ½ standard deviation
Half distance of Mexico, Indonesia, Chile to OECD U.S., Germany to East Asian
Full impact felt 35 years after completion of reform
Improved GDP with Moderately Strong
Knowledge Improvement (0.5 s.d.)
0%
10%
20%
30%
40%
year
per
cen
t ad
diti
on
s to
GD
P
20-year reform 30-year reform typical education spending
Other Benefits of Improved Cognitive Skills Individual earnings
Developed countries Developing countries
Estimated Returns to Cognitive SkillsCountry Study Estimated effecta Notes
Ghana Glewwe (1996) 0.21**-0.3** (government) 0.14-0.17 (priv.)
Alternative estimation approaches yield some differences; math effects shown generally more important than reading effects, and all hold even with Raven’s test for ability.
Ghana Jolliffe (1998) 0.05-0.07* Household income related to average math score with relatively small variation by estimation approach; effect is only observed with off-farm income, and on-farm income is not significantly related to cognitive skills.
Ghana Vijverberg (1999) ? Income estimates for math and reading with nonfarm self-employment; highly variable estimates (including both positive and negative effects) but effects not generally statistically significant.
Kenya Boissiere, Knight, and Sabot (1985); Knight and Sabot (1990)
0.19**-0.22** Total sample estimates: small variation by primary and secondary school leavers.
Morocco Angrist and Lavy (1997)
? Cannot convert to standardized scores because use indexes of performance; French writing skills appear most important for earnings, but results depend on estimation approach.
Pakistan Alderman, Behrman, Ross, and Sabot (1996)
0.12-0.28* Variation by alternative approaches and by controls for ability and health; larger and more significant without ability and health controls.
Pakistan Behrman, Ross, and Sabot (forthcoming)
0.25 Estimates of structural model with combined scores for cognitive skill; significant effects of combined math and reading scores which are instrumented by school inputs
South Africa
Moll (1998) 0.34**-0.48** Depending on estimation method, varying impact of computation; comprehension (not shown) generally insignificant.
Tanzania Boissiere, Knight, and Sabot (1985); Knight and Sabot (1990)
0.07-0.13* Total sample estimates: smaller for primary than secondary school leavers.
*significant at 0.05 level; **significant at 0.01 level. a. Proportional increase in wages from a one standard deviation increase in measured test scores.
Other Benefits of Improved Cognitive Skills Individual earnings
Developed countries Developing countries
Income distribution
Inequality of Educational Quality and of Earnings
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1.3 1.5 1.7 1.9
FIN
Earnings inequality
Test score inequality
DEN
USA
CAN
UK
SWI
IRE
AUS
BELSWE
GER
NET
NOR
Conclusions on Economic Impacts Powerful effects of cognitive skills on
individual earnings, on the distribution of income, and on economic growth Support for causal interpretation
The current situation in developing countries is much worse than generally pictured on the basis just of school enrollment and attainment
Basic SkillsGhana
never enroll dropout gr 1-5
dropout gr 5-9 finish gr 9 w/o basic skill
finish gr 9 w/ basic skill
Fully literate5 %
Grade 937 %
Basic SkillsBrazil
never enroll dropout gr 1-5
dropout gr 5-9 finish gr 9 w/o basic skill
finish gr 9 w/ basic skill
Fully literate8%
Grade 922%
Basic Skills
Morroco
never enroll dropout gr 1-5
dropout gr 5-9 finish gr 9 w/o basic skill
finish gr 9 w/ basic skill
Grade 928%
Fully literate13%
Distribution of Education Quality
Source: Hanushek and Wößmann (2007).
8.2% 7.3%USA
2.7% Estonia
21.9%Taiwan
81.8%Peru
66.2%Brazil
Cognitive Skill Production
Families Peers Community and neighborhood Schools
Policy largely around schools but other interventions such as health programs
Resource Policies
Little evidence of success Cross country evidence
Expenditure per Student and Student Performance across Countries
350
400
450
500
550
0 10000 20000 30000 40000 50000 60000 70000 80000
Math performance in PISA 2003
Cumulative educational expenditure per student
Mexico
Belgium
Iceland
FranceSweden
SwitzerlandDenmark
AustriaNorway
USA
ItalyPortugal
Spain
Korea
GermanyIreland
Czech Rep.
HungaryPoland
Slovak Rep.
Greece
Finland
NetherlandsCanada
Japan
Australia
R2 = 0.15
R2 = 0.01
Resource Policies
Little evidence of success Cross country evidence Within country – developed Within country – developing
Resource Policies
Little evidence of success Cross country evidence Within country – developed Within country – developing
Does not say “resources never have effect” Does not say “resources cannot have effect”
No expectation within current incentive structure
Teacher Quality
Strongest evidence on systematic effects
Not related to common measures
Observability
Supply Side Incentives
Changing Institutions Application in both developed and developing
countries Interpretation – work largely through
changing teacher quality
Institutional Reforms Supported by Evidence
Centralized exams
Accountability
Autonomy/decentralization
Choice
Direct performance incentives
No
Yes
No
Yes
55.5
76.2
23.7
0.00
10
20
30
40
50
60
70
80
Central exams
School autonomy over teacher salaries
Math performance in TIMSS/TIMSS-R test scores (relative to lowest category)
Autonomy and Central Exams or Accountability
Demand Side Incentives
Application mainly in developing countries Motivated by access/attainment issues
Work through changing student and family behavior
Programs carefully evaluated
Range of programs
Conditional cash transfers Mexico, Brazil, Columbia, Nicaragua
Fee reduction Indonesia, Cambodia, Taiwan, Kenya*
Food and nutrition supplements Bangladesh, India, Kenya
Results of Demand Side Incentives Aimed generally at encouraging
attendance/completion Rewards linked to being in school Supports Education for All
Each has positive (and significant) impact on attendance and attainment
But, with exception of Kenyan merit scholarship, little or no apparent impact on achievement
Conclusions on Demand Side Incentives Incentives have impact on behavior Requires care in structuring incentives
Ensure that goals are correct Do not assume other outcomes
May be perverse effects Access and quality trade-offs
Access viewed as “equity” Equity not supported by low quality
Information and Feedback
Assessments very bad Limited national assessments International assessments problematic
No regular evaluation function Local variation in effectiveness No simple solutions
Conclusions
School quality is not easily changed
Focus on Incentives but be careful
Information shortage critical Student performance Program feedback