A Decennial Review of the Returns to Education Literature (News and Research 89)

Returns to Investment in Education: A Decennial Review of the Global Literature  00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000Returns to investment in education based on human capital theory have been estimated systematically since the 1950s. In the 60-plus year history of such estimates, there have been several compilations in the literature. This paper reviews and highlights the latest trends and patterns based on a database of 1,120 estimates in 139 countries. The review shows that the private average global rate of return to one extra year of schooling is about 9 percent a year and very stable over decades. Private returns to higher education have increased over time, raising issues of financing and equity. Social returns to schooling remain high, above 10 percent at the secondary and higher education levels. Women continue to experience higher average rates of return to schooling, showing that girls’ education remains a priority. Returns are higher in low-income countries. Those employed in the private sector of the economy enjoy higher returns than those in the public sector, lending support to the productive value of education…

 ‘Education emergency’ stymies Indonesia’s growth …The World Bank’s regional report does not address the core problems, but it does highlight a survey showing that Indonesia is below average and far inferior to Vietnam, which has become its biggest competitor – and often cited by Indonesian officials as a role model — for foreign direct investment (FDI). Indonesia scored only 422 points, compared to Vietnam’s impressive 525, with World Bank senior economist Amer Hasan noting that Indonesia lacks teacher reviews and classroom feedback from students during a learning process that relies more on rote than any serious questioning…

Indonesia struggles to improve education quality  With his flagship Indonesian Smart Card (KIP) program, President Joko “Jokowi” Widodo has managed to further expand children’s access to basic education, imitating the success of his predecessors since Soeharto. The country, however, has achieved little in its attempts to improve its education standards, with most Indonesian children still doing badly in math, science and reading, according to the 2015 Program for International Student Assessment (PISA) survey conducted by the Organization for Economic Cooperation and Development (OECD). In 2005, the government introduced a teacher-certification program aimed primarily at improving teacher welfare. While the program has increased teacher salaries “considerably over the past decade” it has resulted in no “observable improvements in learning outcomes”, a 2013 study by the World Bank concluded… 

Pre-primary education spending is a ‘blind spot’ for aid  Just 1 percent of early childhood development funding is spent on education, according to a report published Wednesday. The report calls on donors to dedicate at least 10 percent of their education budgets to schooling for children aged under 5…

China’s overseas investment should not neglect education History shows that the Belt and Road initiative will be successful only if it boosts human capital, as well as physical infrastructure

Jim Yong Kim: “And we have now done one of the most important learning outcome studies. It is called the Harmonized Learning Outcome Database. And we now know, for any given country, how much learning happened in the years that you were in school. So, even if you were in school for 12 years in Yemen or Malawi, you are only going to get about half the benefit as if you were in school in Singapore. So, Singapore has a great school system.  And if Singapore is the standard, then what we found, unfortunately, is that many countries in the world you lose almost five years of education.” (World Bank President Kim’s positioning speech at American University discussed how innovation and technology are helping redefine the relationship between rich and poor countries in this era of rapid change.  The speech transcript is available here.

Lessons from East Asia and Pacific: Improved Learning Outcomes, Economic Growth, and Equitable Development | Wednesday, April 18, 2018 – 9:30am to 11:00am | REGISTER| Featuring Harry Anthony Patrinos, Nancy Birdsall, Jaime Saavedra, Agustina Paglayan, Justin Sandefur | Discuss the 2018 World Bank Regional Flagship report, Growing Smarter: Learning and Equitable Development in East Asia and Pacific.

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