High-quality schooling is a necessary component of economic growth (News and Research 309)
Published by the Thomas B. Fordham Institute on 9.22.2022 (https://fordhaminstitute.org/)
International student assessments are commonplace today, though none existed before 1965, and few countries participated at the outset. Seven countries have participated in international assessments for almost sixty years—Australia, Finland, France, Germany, Japan, Netherlands, and the United States—and one of the lessons we learn from them is that education is correlated with economic growth. As schooling levels and academic achievement rose, so did national income. We see in Figure 1, for example, that this in the case of Finland, Japan, and the United States.
Figure 1. Years of schooling and real income per capita for Finland, Japan, and the U.S., 1980 and 2010
Source: Barro, R. and J.-W. Lee. 2013. “A New Data Set of Educational Attainment in the World, 1950-2010.” Journal of Development Economics 104: 184-198.
One of the likely reasons for this correlation is that economic growth and development considerations mattered deeply for many of these countries. Finland was a middle-income country at the outset. Germany and Japan were in a post-war boom; and then Germany had to reintegrate its Eastern part. These economies needed a skilled workforce to grow.
Therefore, policies to expand skills were undertaken. This caused, among other things, schooling levels to double between 1950 and 2010, according to the same research on which Figure 1 is based. On average, they rose from six to twelve years. Over this period, schooling levels almost doubled in Finland and France. Average years of schooling for all seven countries increased, and at the same time, the differences among them narrowed. Finland expanded the fastest with a focus on access and equity, starting with comprehensive schooling reforms in the 1960s and 1970s that included a gradual transition to a common, unified, compulsory curriculum, with track selection postponed to age fifteen or sixteen. This coincided with the expansion of secondary schooling in the late 1980s. Moreover, the disparity between countries in terms of schooling decreased. Schooling levels have become much more equal across them… [keep reading]
Learning outcomes for Australia, Finland, France, Germany, Japan, Netherlands, and the U.S., harmonized average of reading, math and science scores, 1960–2010
Other news and research:
The multigenerational impacts of educational expansion: Evidence from Vietnam | We investigate the multigenerational effects of a primary school expansion program in Vietnam. In the directly affected generation, the expansion increases educational attainment, literacy, non-agricultural economic activity, earnings and the intergenerational educational mobility. It increases human capital investments in the children of the directly affected generation, with increased educational expenditures, school enrollment, and health investments, and a reduction in child labor. Moreover, the expansion improves health in old age of the parents of the directly affected generation, an effect that seems to operate through increased financial resources, access to private health insurance and reduced alcohol consumption.
Hidden schooling: endogenous measurement error and bias in education and labor market experience
Since 1980, 25% of US students repeated a grade during their academic career. Despite this, few economists account for retention when measuring education and experience, causing bias when retention is correlated with other regressors of interest. Rising minimum dropout ages since 1960 have increased retention, causing positive bias in 2SLS estimates of the returns to education. Retention also causes endogenous measurement error in potential experience. In addition to distorting experience-wage profiles across countries, this endogenous measurement error causes the residual Black-White wage gap and the returns to a high school diploma to be overstated. Proxying for age instead of potential experience reduces this bias, suggesting age, not potential experience, should be a standard control variable.
America’s Education Crisis Is a National Security Threat | How a Smarter World Is Changing the Balance of Power | Since the end of World War II, the world’s population has not only gotten vastly bigger; it has also become vastly more educated. In nearly every country on earth, the total number of years that citizens have attended school has grown faster than the population itself, and the number of college degrees conferred has grown even faster. Although population growth is now slowing almost everywhere (and depopulation is an emerging reality for some countries), the overall pace of educational expansion will remain much faster than natural population growth as far into the future as a demographer’s eye can see.
Labor Market Returns and the Evolution of Cognitive Skills: Theory and Evidence | A large literature in cognitive science studies the puzzling “Flynn effect” of rising fluid intelligence (reasoning skill) in rich countries. We develop an economic model in which a cohort’s mix of skills is determined by different skills’ relative returns in the labor market and by the technology for producing skills. We estimate the model using administrative data from Sweden. Combining data from exams taken at military enlistment with earnings records from the tax register, we document an increase in the relative labor market return to logical reasoning skill as compared to vocabulary knowledge. The estimated model implies that changes in labor market returns explain 37% of the measured increase in reasoning skill and can also explain the decline in knowledge. An original survey of parents, an analysis of trends in school curricula, and an analysis of occupational characteristics show evidence of increasing emphasis on reasoning as compared to knowledge.
The loss of human capital in Ukraine | In Global Economic Consequences of the War in Ukraine Sanctions, Supply Chains and Sustainability | Show enormous losses of education and human capital – particularly coming after the pandemic. Ukrainian children are estimated to have lost one year of schooling due to the combined impact of the Covid-19 pandemic and the war.
Singapore to use computer games to teach moral lessons to upper primary pupils
Education, economics and public policy 