Citation Context

...ry analysis is dominated by developed countries, and the impacts of educational quality may not be the same across all countries. Third, concentrating on just the average cognitive skills of a population may mask significant variations in quality within countries, particularly within developing countries. While the evidence confirms an independent effect of educational quality on economic growth, this effect may differ depending on the economic institutions of a country. A variety of people have discussed rent-seeking behavior and how institutions might affect this (for example, Krueger 1974; North 1990; or Easterly 2001). If the available knowledge and skills are used in rent-seeking ways rather than productive ways, one may certainly expect the effect on economic growth to be substantially different, and perhaps even to turn negative. Similarly, Murphy, Shleifer, and Vishny (1991) show that the allocation of talent between rent-seeking and entrepreneurship matters for economic growth: countries with relatively more engineering college majors grow faster and countries with relatively more law concentrators grow more slowly. Easterly (2001) argues that education may not have much impact in l...

Citation Context

...he world are above 17% and that they are systematically higher in developing countries (see Table 1).3 These findings have been reinforced in analyses of the relationship between schooling and economic growth. The standard method to estimate the effect of education on economic growth is to estimate cross-country growth regressions where countries’ average annual growth in Gross Domestic Product (GDP) per capita over several decades is expressed as a function of measures of schooling and a set of other variables deemed to be important for economic growth. Following the seminal contributions by Barro (1991, 1997) and Mankiw, Romer, and Weil (1992), a vast early literature of cross-country growth regressions has tended to find a significant positive association between quantitative measures of schooling and economic growth.4 To give an idea of the robustness of this association, in the recent extensive robustness analysis by Sala-i-Martin, Doppelhofer, and Miller (2004) of 67 explanatory variables in growth regressions on a sample of 88 countries, primary schooling turns out to be the most robust influence factor (after an East Asian dummy) on growth in GDP per capita during 1960–1996. The probl...

Citation Context

...es (Mincer 1974). The coefficient on years of schooling in this regression can, under specific circumstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renelt 1992) as proxies for the human capital of an economy. An important innovation by Barro and Lee (1993, 2001) was the development of internationally comparable data on average years of schooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possible and using literacy and enrollment data to fill gaps in the census data. 5. See the general conceptual model in Hanushek (1979) and the review in Hanushek (1986). 6. The clearest analyses are found in several references for the United States (analyzed in Hanushek 2002). See Bis...

Citation Context

...ate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria, and other diseases; ensure environmental sustainability; and develop a global partnership for development. 2. Details of the underlying statistical analyses plus an extended set of references can be found in Hanushek and Woessmann (2008). 3. The Mincer earnings function relates the logarithm of earnings to years of schooling, potential labor market experience, and other factors specific to individual studies (Mincer 1974). The coefficient on years of schooling in this regression can, under specific circumstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renel...

Citation Context

...ates. It is, after all, well known to all that further D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 Education Economics 293 schooling has a large payoff. This fact was developed in the innovative analyses by Jacob Mincer (1970, 1974), who considered how investing in differing amounts of schooling affects individual earnings. Over the past 30 years, literally hundreds of such studies have been conducted around the world. In fact, these have been reviewed in a large number of interpretative articles including Psacharopoulos (1994), Card (1999), Harmon, Oosterbeek, and Walker (2003), Psacharopoulos and Patrinos (2004), and Heckman, Lochner, and Todd (2006). By all accounts, the rate of return to additional years of schooling is large. In estimates of Mincer earnings functions for 98 countries, Psacharopoulos and Patrinos (2004) find that average returns for the world are above 17% and that they are systematically higher in developing countries (see Table 1).3 These findings have been reinforced in analyses of the relationship between schooling and economic growth. The standard method to estimate the effect of education on economic g...

Citation Context

...th effects can be small, even though the people with more school attainment get significantly higher incomes than those with low attainment. In the case of South Asia, see the returns in Riboud, Savchenko, and Tan (2007). 16. PISA is conducted by the OECD. It involves testing a representative group of 15 year olds in each participating country. The tests themselves are designed to measure practical skills rather than deeper conceptual skills. These scores from PISA also enter into the construction of aggregate country measures of cognitive skills used in Hanushek and Woessmann (2008). 17. See Krueger (1999) and Hanushek (1999) on the estimated impacts both from experimental manipulation and from econometric analyses. 18. The actual reform policy is presumed to operate linearly such that, for example, a 20-year reform that ultimately yielded one-half standard deviation higher achievement would see the performance of graduates increasing by 0.025 standard deviations each year over the period. It also assumes that the impact is proportional to the average achievement levels of prime age workers, based on workers in the first 35 years of their work life. 19. For a review of existing literature, albe...

Citation Context

...nded set of references can be found in Hanushek and Woessmann (2008). 3. The Mincer earnings function relates the logarithm of earnings to years of schooling, potential labor market experience, and other factors specific to individual studies (Mincer 1974). The coefficient on years of schooling in this regression can, under specific circumstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renelt 1992) as proxies for the human capital of an economy. An important innovation by Barro and Lee (1993, 2001) was the development of internationally comparable data on average years of schooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possible and using literacy and enrollment data t...

Citation Context

...iscussion in policy debates. It is, after all, well known to all that further D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 Education Economics 293 schooling has a large payoff. This fact was developed in the innovative analyses by Jacob Mincer (1970, 1974), who considered how investing in differing amounts of schooling affects individual earnings. Over the past 30 years, literally hundreds of such studies have been conducted around the world. In fact, these have been reviewed in a large number of interpretative articles including Psacharopoulos (1994), Card (1999), Harmon, Oosterbeek, and Walker (2003), Psacharopoulos and Patrinos (2004), and Heckman, Lochner, and Todd (2006). By all accounts, the rate of return to additional years of schooling is large. In estimates of Mincer earnings functions for 98 countries, Psacharopoulos and Patrinos (2004) find that average returns for the world are above 17% and that they are systematically higher in developing countries (see Table 1).3 These findings have been reinforced in analyses of the relationship between schooling and economic growth. The standard method to estimate the effect of education ...

Citation Context

...he cross-country analysis is dominated by developed countries, and the impacts of educational quality may not be the same across all countries. Third, concentrating on just the average cognitive skills of a population may mask significant variations in quality within countries, particularly within developing countries. While the evidence confirms an independent effect of educational quality on economic growth, this effect may differ depending on the economic institutions of a country. A variety of people have discussed rent-seeking behavior and how institutions might affect this (for example, Krueger 1974; North 1990; or Easterly 2001). If the available knowledge and skills are used in rent-seeking ways rather than productive ways, one may certainly expect the effect on economic growth to be substantially different, and perhaps even to turn negative. Similarly, Murphy, Shleifer, and Vishny (1991) show that the allocation of talent between rent-seeking and entrepreneurship matters for economic growth: countries with relatively more engineering college majors grow faster and countries with relatively more law concentrators grow more slowly. Easterly (2001) argues that education may not have much...

Citation Context

...arithm of earnings to years of schooling, potential labor market experience, and other factors specific to individual studies (Mincer 1974). The coefficient on years of schooling in this regression can, under specific circumstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renelt 1992) as proxies for the human capital of an economy. An important innovation by Barro and Lee (1993, 2001) was the development of internationally comparable data on average years of schooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possible and using literacy and enrollment data to fill gaps in the census data. 5. See the general conceptual model in Hanushek (1979) and the review in Hanushek (1...

Citation Context

...umstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renelt 1992) as proxies for the human capital of an economy. An important innovation by Barro and Lee (1993, 2001) was the development of internationally comparable data on average years of schooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possible and using literacy and enrollment data to fill gaps in the census data. 5. See the general conceptual model in Hanushek (1979) and the review in Hanushek (1986). 6. The clearest analyses are found in several references for the United States (analyzed in Hanushek 2002). See Bishop 1989, 1991; O’Neill 1990; Grogger and Eide 1993; D ow nl oa de d by [ M on te re y In st o ...

Citation Context

...er D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 Education Economics 293 schooling has a large payoff. This fact was developed in the innovative analyses by Jacob Mincer (1970, 1974), who considered how investing in differing amounts of schooling affects individual earnings. Over the past 30 years, literally hundreds of such studies have been conducted around the world. In fact, these have been reviewed in a large number of interpretative articles including Psacharopoulos (1994), Card (1999), Harmon, Oosterbeek, and Walker (2003), Psacharopoulos and Patrinos (2004), and Heckman, Lochner, and Todd (2006). By all accounts, the rate of return to additional years of schooling is large. In estimates of Mincer earnings functions for 98 countries, Psacharopoulos and Patrinos (2004) find that average returns for the world are above 17% and that they are systematically higher in developing countries (see Table 1).3 These findings have been reinforced in analyses of the relationship between schooling and economic growth. The standard method to estimate the effect of education on economic growth is to estimate cross-country growth regressions where countries’ aver...

Citation Context

...e National Assessment of Educational Quality, or NAEP) to calibrate the US scores on different international tests. Then, by setting the variance of each test according to an OECD standardization group, each country and test can be equated. See the further description along with a listing of the separate tests in Hanushek and Woessmann (2008). 13. Details of the data and analysis are found in Hanushek and Woessmann (2008). The source of the income data is version 6.1 of the Penn World Tables (cf. Heston, Summers, and Aten 2002), and the data on years of schooling is an extended version of the Cohen and Soto (2001) data described in Jamison, Jamison, and Hanushek (2007). 14. These results are very close to the estimates by Hanushek and Kimko (2000), which reported estimates in terms of the country level standard deviation that is approximately one-half as large as the individual level standard deviation; see Hanushek and Woessmann (2008). 15. Note that it is possible to have high rates of return for secondary and tertiary attainment without getting the gains through economic growth. With low quality, the growth effects can be small, even though the people with more school attainment get significantly hi...

Citation Context

...he effect on economic growth to be substantially different, and perhaps even to turn negative. Similarly, Murphy, Shleifer, and Vishny (1991) show that the allocation of talent between rent-seeking and entrepreneurship matters for economic growth: countries with relatively more engineering college majors grow faster and countries with relatively more law concentrators grow more slowly. Easterly (2001) argues that education may not have much impact in less developed countries that lack other facilitating factors, such as functioning institutions for markets and legal systems. In a similar way, Pritchett (2001, 2006) suggests that deficiencies in the institutional environment might render the average effect of education on growth across all countries negligible.15 To address these issues, both Jamison, Jamison, and Hanushek (2007) and Hanushek and Woessmann (2008) incorporate measures of economic institutions in Figure 2. Added-variable plots of growth and educational quality. Notes: Added-variable plots of a regression of the average annual rate of growth (%) of real GDP per capita during 1960–2000 on the initial level of real GDP per capita in 1960, average test scores on international student ac...

Citation Context

...economic growth. The Hanushek and Kimko (2000) estimates suggest that one country-level standard deviation higher test performance would yield around one percentage point higher annual growth rates – an enormous impact by any standard. This analysis has been extended to a larger group of countries and to economic performance through 2000 in Jamison, Jamison, and Hanushek (2007). The growth estimation relies upon the development of a consistent set of achievement estimates that rescale the various international tests to be comparable that is developed in Hanushek and Woessmann (forthcoming).12 Hanushek and Woessmann (2008) also use these data to extend the analysis of growth in a variety of ways. The Hanushek and Woessmann (2008) measure of the quality of education is a simple average of the mathematics and science scores over all the international tests between 1964 and 2003. They interpret this as a proxy for the average educational performance of the whole labor force. This measure encompasses overall cognitive skills, not just those developed in schools. Thus, whether skills are developed at home, in schools, or elsewhere, they are included in the growth analyses.13 The basic result is depicted graphically ...

Citation Context

...dominated by developed countries, and the impacts of educational quality may not be the same across all countries. Third, concentrating on just the average cognitive skills of a population may mask significant variations in quality within countries, particularly within developing countries. While the evidence confirms an independent effect of educational quality on economic growth, this effect may differ depending on the economic institutions of a country. A variety of people have discussed rent-seeking behavior and how institutions might affect this (for example, Krueger 1974; North 1990; or Easterly 2001). If the available knowledge and skills are used in rent-seeking ways rather than productive ways, one may certainly expect the effect on economic growth to be substantially different, and perhaps even to turn negative. Similarly, Murphy, Shleifer, and Vishny (1991) show that the allocation of talent between rent-seeking and entrepreneurship matters for economic growth: countries with relatively more engineering college majors grow faster and countries with relatively more law concentrators grow more slowly. Easterly (2001) argues that education may not have much impact in less developed count...

Citation Context

...llett, and Levy 1995; Neal and Johnson 1996; Mulligan 1999; Murnane et al. 2000, 2001; Altonji and Pierret 2001; Lazear 2003). 7. Scores are standardized to mean zero and standard deviation one for comparative purposes. A one-half standard deviation change would move somebody from the middle of the distribution (the 50th percentile) to the 69th percentile; a one standard deviation change would move this person to the 84th percentile. Because tests tend to follow a normal distribution, the percentile movements are largest at the center of the distribution. 8. See, for example, Dugan (1976) and Manski and Wise (1983)) for early analyses. Murnane et al. (2000) separate the direct returns to measured skill from the indirect returns of more schooling and suggest that perhaps one-third to one-half of the full return to higher achievement comes from further schooling. Similarly, Rivkin (1995) finds that variations in test scores capture a considerable proportion of the systematic variation in high school completion and in college continuation, so that test score differences can fully explain black-white differences in schooling. See further discussion and references in Hanushek (2006) 9. See Glewwe (1996), Jol...

Citation Context

...gh professional development and training of existing teachers, but currently available evidence does not suggest that such an approach would be very effective. 23. A recent study on India suggests that performance pay could work to improve teachers’ performance in particular country settings; see Muralidharan and Sundararaman (2008) 24. There are of course many reasons for caution. The most important is that estimates of individual teacher value-added contains substantial measurement error. For an analysis of how this can be integrated into policy, see Gordon, Kane, and Staiger (2006) 25. See Murnane (1975), Armor et al. (1976), and Jacob and Lefgren (2006). 26. These basic estimates are described in detail in Hanushek (2009). 27. These calculations assume that one standard deviation of teacher quality – moving from the center of the distribution to the 84th percentile – is 0.20 standard deviations of student achievement; using a calculation of 0.30 makes these conclusions even more grim. 28. These estimates apply the information on the distribution of teacher effectiveness for each year to a cumulative impact if teachers are improved in all grades. To obtain these steadystate results, it would ...

Citation Context

... of schooling, potential labor market experience, and other factors specific to individual studies (Mincer 1974). The coefficient on years of schooling in this regression can, under specific circumstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renelt 1992) as proxies for the human capital of an economy. An important innovation by Barro and Lee (1993, 2001) was the development of internationally comparable data on average years of schooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possible and using literacy and enrollment data to fill gaps in the census data. 5. See the general conceptual model in Hanushek (1979) and the review in Hanushek (1986). 6. The ...

Citation Context

... first 35 years of their work life. 19. For a review of existing literature, albeit largely for developed countries, see Hanushek and Rivkin (2004). This paper describes various attempts to estimate the impact of teacher quality on student achievement. 20. The conventional measures of teacher experience and the level of teacher schooling are not closely related to student outcomes except for the first year or two of experience. Neither is teacher certification itself closely related. Hanushek (2003). 21. See, for example, Rivkin, Hanushek, and Kain (2005), Aaronson, Barrow, and Sander (2007), Boyd et al. (2006), and Gordon, Kane, and Staiger (2006) for added examples. D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 Education Economics 309 Reviews of the US teacher quality research and of the policy implications can be found in Hanushek and Rivkin (2004, 2006). 22. The discussion presumes that quality improvements require changing the stock of teachers. It is possible that this could be done through professional development and training of existing teachers, but currently available evidence does not suggest that such an approach would be ve...

Citation Context

...development and training of existing teachers, but currently available evidence does not suggest that such an approach would be very effective. 23. A recent study on India suggests that performance pay could work to improve teachers’ performance in particular country settings; see Muralidharan and Sundararaman (2008) 24. There are of course many reasons for caution. The most important is that estimates of individual teacher value-added contains substantial measurement error. For an analysis of how this can be integrated into policy, see Gordon, Kane, and Staiger (2006) 25. See Murnane (1975), Armor et al. (1976), and Jacob and Lefgren (2006). 26. These basic estimates are described in detail in Hanushek (2009). 27. These calculations assume that one standard deviation of teacher quality – moving from the center of the distribution to the 84th percentile – is 0.20 standard deviations of student achievement; using a calculation of 0.30 makes these conclusions even more grim. 28. These estimates apply the information on the distribution of teacher effectiveness for each year to a cumulative impact if teachers are improved in all grades. To obtain these steadystate results, it would be necessary for a st...

Citation Context

...istical analyses plus an extended set of references can be found in Hanushek and Woessmann (2008). 3. The Mincer earnings function relates the logarithm of earnings to years of schooling, potential labor market experience, and other factors specific to individual studies (Mincer 1974). The coefficient on years of schooling in this regression can, under specific circumstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renelt 1992) as proxies for the human capital of an economy. An important innovation by Barro and Lee (1993, 2001) was the development of internationally comparable data on average years of schooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possib...

Citation Context

...hooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possible and using literacy and enrollment data to fill gaps in the census data. 5. See the general conceptual model in Hanushek (1979) and the review in Hanushek (1986). 6. The clearest analyses are found in several references for the United States (analyzed in Hanushek 2002). See Bishop 1989, 1991; O’Neill 1990; Grogger and Eide 1993; D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 308 E.A. Hanushek Blackburn and Neumark 1993, 1995; Murnane, Willett, and Levy 1995; Neal and Johnson 1996; Mulligan 1999; Murnane et al. 2000, 2001; Altonji and Pierret 2001; Lazear 2003). 7. Scores are standardized to mean zero and standard deviation one for comparative purposes. A one-half standard deviation change would move somebody from the middle of the distribution (the 50th percentile) to the 69th percentile; a one standard deviation change would move this person to the 84th percentile. Because tests tend to follow a normal distribution, the percentile movements are largest at the center of the distribution. 8. See, for example...

Citation Context

...acy and numeracy for a representative sample of the population aged 15–65 years was collected for a sample of countries between 1994 and 1998. This data-set spans countries with different incomes. These data permit direct comparisons of the relative importance of quantity and quality of schooling across countries, although the bias toward developed economies remains. Hanushek and Zhang (forthcoming) estimate returns to school attainment and to literacy scores Table 2. Summary of estimated returns to a standard deviation increase in cognitive skills. Country Study Estimated effecta Notes Ghana Glewwe (1996) 0.21**–0.3** (government), 0.14–0.17 (private) Alternative estimation approaches yield some differences; mathematics 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 mathematics 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 mathematics and reading with non-farm self-employment; highly varia...

Citation Context

...r possible and using literacy and enrollment data to fill gaps in the census data. 5. See the general conceptual model in Hanushek (1979) and the review in Hanushek (1986). 6. The clearest analyses are found in several references for the United States (analyzed in Hanushek 2002). See Bishop 1989, 1991; O’Neill 1990; Grogger and Eide 1993; D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 308 E.A. Hanushek Blackburn and Neumark 1993, 1995; Murnane, Willett, and Levy 1995; Neal and Johnson 1996; Mulligan 1999; Murnane et al. 2000, 2001; Altonji and Pierret 2001; Lazear 2003). 7. Scores are standardized to mean zero and standard deviation one for comparative purposes. A one-half standard deviation change would move somebody from the middle of the distribution (the 50th percentile) to the 69th percentile; a one standard deviation change would move this person to the 84th percentile. Because tests tend to follow a normal distribution, the percentile movements are largest at the center of the distribution. 8. See, for example, Dugan (1976) and Manski and Wise (1983)) for early analyses. Murnane et al. (2000) separate the direct returns to measured skill...

Citation Context

...es permit a tentative conclusion that the returns to quality may be even larger in developing countries than in developed countries. This of course would be consistent with the range of estimates for returns to quantity of schooling (for example, Psacharopoulos 1994; Psacharopoulos and Patrinos 2004), which are frequently interpreted as indicating diminishing marginal returns to schooling. Evidence also suggests that educational quality is directly related to school attainment in developing countries. In Brazil, a country plagued by high rates of grade repetition and ultimate school dropouts, Harbison and Hanushek (1992) show that higher cognitive skills in primary school lead to lower repetition rates. Further, Hanushek, Lavy, and Hitomi (2008) find that lower-quality schools, measured by lower valueadded to cognitive achievement, lead to higher dropout rates in Egyptian primary schools. Thus, as found for developed countries, the full economic impact of higher educational quality comes in part through greater school attainment. This complementarity of school quality and attainment also means that actions that actually improve quality of schools will yield a bonus in terms of meeting goals for attainment. Co...

Citation Context

...derable emphasis on investments in human capital through the provision of schooling. And this focus carries through to international agencies such as the World Bank, which also emphasizes the provision of schooling. The underlying message is that human capital is important for individuals and for nations. At the same time, human capital – identified as the stock of productive skills of an individual – is an abstract concept. Both researchers and policy-makers must transform the concept into practical terms that can be studied and translated into policy. The genius of early researchers, led by Mincer (1970, 1974), was to recognize that varying amounts of schooling signified different amounts of human capital, and thus could be a clear measure of the abstract idea of human capital. From a research standpoint, various census and survey databases routinely provide school attainment information that can be linked to incomes and other individual outcomes. From a policy viewpoint, school attainment is also a concrete notion – leading virtually all countries of the world to devote attention to rates of school completion and the promotion of access to further schooling. The worldwide quest to improve s...

Citation Context

... affect student achievement (with some heterogeneity across states), there is little relationship between observable teacher characteristics and teacher effort. Thus, the research (and policy) challenge is establishing what drives performance in developing countries such as India and what can be done to alter the current state. There is simply much less evidence on the variation of teacher quality in developing countries. There is, however, a variety of estimates of how different incentives might yield important results, even if teacher quality variations are not well understood. For example, Muralidharan and Sundararaman (2008) suggest from experimental evidence in India that two years of performance incentives to teachers could yield close to 0.3 standard deviation improvements in student scores. Conclusions Virtually every government is concerned about investments in human capital. These objectives must be put within context, because schooling is different from many publicly provided goods. First, schooling has direct implications for individual outcomes, for national aggregate outcomes, and for the distribution of outcomes Table 4. Literacy rates: world and South Asia, 2000–2006. Adult literacy rate (age 15+ year...

Citation Context

... inputs.5 This broader view is important methodologically but, more than that, also modifies the policy discussions to include other factors such as the role of health in cognitive development. A variety of researchers are now able to document that the individual earnings advantages to higher achievement on standardized tests are quite substantial. These results are derived from different specific approaches, but the basic underlying analysis involves estimating a standard ‘Mincer’ earnings function and adding a measure of individual cognitive skills.6 Recent US studies by Mulligan (1999), by Murnane et al. (2000) and by Lazear (2003) obtain estimates of the value of cognitive skills from different nationally representative data-sets for the United States that follow students after they leave school and enter the labor force. They suggest that one standard deviation increase in mathematics performance at the end of high schools translates into 12% higher annual earnings.7 A limited number of additional studies are available for other developed countries – McIntosh and Vignoles (2001) study wages in the United Kingdom, and Finnie and Meng (2002) and Green and Riddell (2003) in Canada also suggest that c...

Citation Context

...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 mathematics 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 mathematics and reading with non-farm 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 et al. (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 (2008) 0.25 Estimates of structural model with combined scores for cognitive ...

Citation Context

...s important methodologically but, more than that, also modifies the policy discussions to include other factors such as the role of health in cognitive development. A variety of researchers are now able to document that the individual earnings advantages to higher achievement on standardized tests are quite substantial. These results are derived from different specific approaches, but the basic underlying analysis involves estimating a standard ‘Mincer’ earnings function and adding a measure of individual cognitive skills.6 Recent US studies by Mulligan (1999), by Murnane et al. (2000) and by Lazear (2003) obtain estimates of the value of cognitive skills from different nationally representative data-sets for the United States that follow students after they leave school and enter the labor force. They suggest that one standard deviation increase in mathematics performance at the end of high schools translates into 12% higher annual earnings.7 A limited number of additional studies are available for other developed countries – McIntosh and Vignoles (2001) study wages in the United Kingdom, and Finnie and Meng (2002) and Green and Riddell (2003) in Canada also suggest that cognitive skills are i...

Citation Context

...d to average mathematics 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 mathematics and reading with non-farm 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 et al. (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 (2008) 0.25 Estimates of structural model with combined scores for cognitive skill; significant effects of combined mathematics and reading scores that are instrumented by school inputs South Africa Moll ...

Citation Context

...es plus an extended set of references can be found in Hanushek and Woessmann (2008). 3. The Mincer earnings function relates the logarithm of earnings to years of schooling, potential labor market experience, and other factors specific to individual studies (Mincer 1974). The coefficient on years of schooling in this regression can, under specific circumstances, be interpreted as the rate of return to schooling. (See, however, Heckman, Lochner, and Todd [2006], who offer a critique and interpretation of these analyses.) 4. For extensive reviews of the literature, see for example Topel (1999), Temple (2001), Krueger and Lindahl (2001), and Sianesi and Van Reenen (2003). Early studies used adult literacy rates (for example, Azariadis and Drazen 1990; Romer 1990) or school enrollment ratios (for example, Barro 1991; Mankiw, Romer, and Weil 1992; Levine and Renelt 1992) as proxies for the human capital of an economy. An important innovation by Barro and Lee (1993, 2001) was the development of internationally comparable data on average years of schooling for a large sample of countries and years, based on a combination of census or survey data on educational attainment wherever possible and using li...

Citation Context

...ndard ‘Mincer’ earnings function and adding a measure of individual cognitive skills.6 Recent US studies by Mulligan (1999), by Murnane et al. (2000) and by Lazear (2003) obtain estimates of the value of cognitive skills from different nationally representative data-sets for the United States that follow students after they leave school and enter the labor force. They suggest that one standard deviation increase in mathematics performance at the end of high schools translates into 12% higher annual earnings.7 A limited number of additional studies are available for other developed countries – McIntosh and Vignoles (2001) study wages in the United Kingdom, and Finnie and Meng (2002) and Green and Riddell (2003) in Canada also suggest that cognitive skills are important to earnings. Further, in the developed countries, a portion of the return to cognitive skills comes through increased school attainment. In general, higher skills are strongly associated with continuation in school.8 The evidence for developing countries is a little difficult to summarize easily.9 The literature on returns to cognitive skills in developing countries is restricted to a relatively limited number of countries: Ghana, Kenya, Morocco...

Citation Context

...jverberg (1999) ? Income estimates for mathematics and reading with non-farm 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 et al. (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 (2008) 0.25 Estimates of structural model with combined scores for cognitive skill; significant effects of combined mathematics and reading scores that 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...

Citation Context

... middle of the distribution (the 50th percentile) to the 69th percentile; a one standard deviation change would move this person to the 84th percentile. Because tests tend to follow a normal distribution, the percentile movements are largest at the center of the distribution. 8. See, for example, Dugan (1976) and Manski and Wise (1983)) for early analyses. Murnane et al. (2000) separate the direct returns to measured skill from the indirect returns of more schooling and suggest that perhaps one-third to one-half of the full return to higher achievement comes from further schooling. Similarly, Rivkin (1995) finds that variations in test scores capture a considerable proportion of the systematic variation in high school completion and in college continuation, so that test score differences can fully explain black-white differences in schooling. See further discussion and references in Hanushek (2006) 9. See Glewwe (1996), Jolliffe (1998), Boissiere, Knight, and Sabot (1985), Knight and Sabot (1990), Angrist and Lavy (1997), Alderman et al. (1996), Behrman, Ross, and Sabot (2008) and Moll (1998). 10. At the same time, the estimates of the return to years of schooling from models that incorporate f...

Citation Context

...nation of census or survey data on educational attainment wherever possible and using literacy and enrollment data to fill gaps in the census data. 5. See the general conceptual model in Hanushek (1979) and the review in Hanushek (1986). 6. The clearest analyses are found in several references for the United States (analyzed in Hanushek 2002). See Bishop 1989, 1991; O’Neill 1990; Grogger and Eide 1993; D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 308 E.A. Hanushek Blackburn and Neumark 1993, 1995; Murnane, Willett, and Levy 1995; Neal and Johnson 1996; Mulligan 1999; Murnane et al. 2000, 2001; Altonji and Pierret 2001; Lazear 2003). 7. Scores are standardized to mean zero and standard deviation one for comparative purposes. A one-half standard deviation change would move somebody from the middle of the distribution (the 50th percentile) to the 69th percentile; a one standard deviation change would move this person to the 84th percentile. Because tests tend to follow a normal distribution, the percentile movements are largest at the center of the distribution. 8. See, for example, Dugan (1976) and Manski and Wise (1983)) for early analyses....

Citation Context

...ion for All initiative grew out of the world summit on education in 1990 and was given more specificity in the Dakar summit in 2000. The key elements of the Education for All initiative (all to be accomplished by 2015) are: expand early childhood care and education; provide free and compulsory primary education for all; promote learning and life skills for young people and adults; increase adult literacy by 50%; achieve gender parity by 2005, gender equality by 2015; and improve the quality of education. While each of the goals has received attention in annual monitoring reports (for example, UNESCO 2005), it appears clear that schooling attainment largely drives the movement. The Millennium Development Goals, developed in 2000, cover a range of broad issues including health, nutrition, and the environment, but the second goal is achieving universal primary education.1 Again the focus is getting school attainment up at least to the primary schooling level everywhere. This discussion begins with a brief review of the evidence on the value of added years of schooling.2 Following that, however, the discussion turns to issues of educational quality. The perspective taken is that school attainment ...

Citation Context

...1995; Murnane, Willett, and Levy 1995; Neal and Johnson 1996; Mulligan 1999; Murnane et al. 2000, 2001; Altonji and Pierret 2001; Lazear 2003). 7. Scores are standardized to mean zero and standard deviation one for comparative purposes. A one-half standard deviation change would move somebody from the middle of the distribution (the 50th percentile) to the 69th percentile; a one standard deviation change would move this person to the 84th percentile. Because tests tend to follow a normal distribution, the percentile movements are largest at the center of the distribution. 8. See, for example, Dugan (1976) and Manski and Wise (1983)) for early analyses. Murnane et al. (2000) separate the direct returns to measured skill from the indirect returns of more schooling and suggest that perhaps one-third to one-half of the full return to higher achievement comes from further schooling. Similarly, Rivkin (1995) finds that variations in test scores capture a considerable proportion of the systematic variation in high school completion and in college continuation, so that test score differences can fully explain black-white differences in schooling. See further discussion and references in Hanushek (2006...

Citation Context

...ve importance of quantity and quality of schooling across countries, although the bias toward developed economies remains. Hanushek and Zhang (forthcoming) estimate returns to school attainment and to literacy scores Table 2. Summary of estimated returns to a standard deviation increase in cognitive skills. Country Study Estimated effecta Notes Ghana Glewwe (1996) 0.21**–0.3** (government), 0.14–0.17 (private) Alternative estimation approaches yield some differences; mathematics 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 mathematics 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 mathematics and reading with non-farm 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...

Citation Context

...2 level difficulty).’31 Table 4 provides information about literacy rates of adults and of youth (age 15– 24 years) in South Asian countries. First, the variations across South Asia are striking – varying from roughly one-half of adults in Bangladesh being illiterate to almost full literacy in the Republic of Maldives. Second, and more problematic, is the literacy shortcomings in several countries for youth, indicating that the problem of illiteracy will not disappear with current policies and schooling availability. Third, the inconsistency of the literacy data and the simple test results in Pratham (2005) suggests that these data actually understate the problem of achievement and cognitive skills that exists in the region. The larger issue is whether policy implications revolving around teacher quality hold for developing countries. The evidence on the magnitude of teacher quality differences comes directly from the United States. While it has been essentially duplicated across US analyses, little is available for the developing world. We do know that the lack of relationships between student achievement and common measures of teacher quality is quite consistent across developed and developing...

Citation Context

... Asian countries. Developing countries as a whole are significantly behind others at primary school, and, not surprisingly, this gap expands by tertiary schooling. Table 3. Enrollment rates by development status: world and South Asia, 2006. Net enrollment rate (primary school) Gross enrollment rate (tertiary school) School life expectancy World 86 25 11 Countries in transition 90 57 13 Developed countries 95 67 16 Developing countries 85 17 10 South Asia 86 11 9 Bangladesh 89 6 8 Bhutan 79 6 10 India 89 12 10 Iran 94 27 13 Maldives 97 – 12 Nepal 79 6 – Pakistan 66 5 7 Sri Lanka 97 – – Source: UNESCO (2008). D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 Education Economics 305 While some South Asian countries have moved forward with school enrollment – notably Maldives, Sri Lanka, and Iran – the other countries of the region lag behind. India now beats the developing world in primary school enrollment (an estimated 89%29 versus 85%) but actually does worse in terms of tertiary school enrollment (12% versus 17% in the rest of the developing world) (see UNESCO 2008). Enrollment and elementary school completion are far from universal in...

Citation Context

...a standard deviation increase in cognitive skills. Country Study Estimated effecta Notes Ghana Glewwe (1996) 0.21**–0.3** (government), 0.14–0.17 (private) Alternative estimation approaches yield some differences; mathematics 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 mathematics 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 mathematics and reading with non-farm 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 et al....

Citation Context

... accounts, efforts to expand school attainment – which have been significant in recent years – may do little to meet the human capital goals of many developing countries. On this message it appears clear that the research pertains directly to developing countries. India has not participated in any of the international tests since the early 1970s, and other South Asian countries have not participated in them at all. Thus, it is difficult to benchmark student performance in South Asian countries in terms of developed or developing countries of the world. Two innovative studies, by Wu (2009) and Das and Zajonc (2008), however, give a useful comparison. By testing 6000 Indian students using the publicly available mathematics test items from Trends in International Mathematics and Science Study (TIMSS) and applying item response theory to these, they can place India within the world distribution of performance. In terms of average performance, Das and Zajonc (2008) show that the tested Indian states of Orissa and Rajasthan are placed near the bottom of the 51 countries participating in TIMSS.30 These findings are consistent with an earlier study of rural Indian students that found ‘close to 35% of children ...

Citation Context

...h the impact of variations in teacher quality or the appropriate policies that might be followed. Harbison and Hanushek (1992) do show that, at least for poor areas of Brazil, common teacher measures – such as school attainment of the teachers – bear little relationship to student outcomes even when observed at very low levels. They also indicate that there are huge variations in performance across individual teachers and classrooms, although a portion of this could reflect the composition of students in the classroom.32 Some specific research on South Asia supports these general conclusions. Kingdon (2006) shows that little gain can be expected simply from improving teacher characteristics such as training and qualifications. Similarly, a study by Pandey, Goyal, and Sundararaman (2008) across three Indian states finds that, although teacher attendance and effort generally affect student achievement (with some heterogeneity across states), there is little relationship between observable teacher characteristics and teacher effort. Thus, the research (and policy) challenge is establishing what drives performance in developing countries such as India and what can be done to alter the current state....

Citation Context

...sic level the absence of schools means that government policy toward promoting human capital cannot be effective. Two aspects of the distributional side of governmental schooling policy are important. First, the strong message of the existing empirical work reviewed above is that time in school has little payoff if it is not accompanied by learning. The student who attends eight years of school but comes away unable to read adequately is unlikely to reap many rewards from the schooling. Second, the distribution of cognitive skills appears to be closely related to the distribution of earnings. Nickell (2004), employing the International Adult Literacy Survey data on international differences in literacy, finds a close association between skill variation and earnings variation. As seen in Figure 4, the spread of earnings mirrors the spread of cognitive skills. Clearly this does not establish causation, but it is highly suggestive of the role of educational quality. Figure 4. Inequality of educational quality and earnings.Note: Measur of inequality is he ratio of ninth decile to first decile in both cases; test performance refers to prose literacy in the International Adult Literacy Survey.S urce: ...

Citation Context

...of existing teachers, but currently available evidence does not suggest that such an approach would be very effective. 23. A recent study on India suggests that performance pay could work to improve teachers’ performance in particular country settings; see Muralidharan and Sundararaman (2008) 24. There are of course many reasons for caution. The most important is that estimates of individual teacher value-added contains substantial measurement error. For an analysis of how this can be integrated into policy, see Gordon, Kane, and Staiger (2006) 25. See Murnane (1975), Armor et al. (1976), and Jacob and Lefgren (2006). 26. These basic estimates are described in detail in Hanushek (2009). 27. These calculations assume that one standard deviation of teacher quality – moving from the center of the distribution to the 84th percentile – is 0.20 standard deviations of student achievement; using a calculation of 0.30 makes these conclusions even more grim. 28. These estimates apply the information on the distribution of teacher effectiveness for each year to a cumulative impact if teachers are improved in all grades. To obtain these steadystate results, it would be necessary for a student to have a higher average...

Citation Context

...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 et al. (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 (2008) 0.25 Estimates of structural model with combined scores for cognitive skill; significant effects of combined mathematics and reading scores that 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. Note: aEstimates indicate proportional increase in wages from a one standard deviation increase in measured test scores. *Significant at 0.05 level. **Significant at 0.01 level. D ow nl oa de d by [ M on te re y In st o f In te rn at io na l S tu di es ] at 1 2: 43 1 1 Ja nu ar y 20 12 296 E.A. Hanushek (in both r...

Citation Context

...cognitive skills.6 Recent US studies by Mulligan (1999), by Murnane et al. (2000) and by Lazear (2003) obtain estimates of the value of cognitive skills from different nationally representative data-sets for the United States that follow students after they leave school and enter the labor force. They suggest that one standard deviation increase in mathematics performance at the end of high schools translates into 12% higher annual earnings.7 A limited number of additional studies are available for other developed countries – McIntosh and Vignoles (2001) study wages in the United Kingdom, and Finnie and Meng (2002) and Green and Riddell (2003) in Canada also suggest that cognitive skills are important to earnings. Further, in the developed countries, a portion of the return to cognitive skills comes through increased school attainment. In general, higher skills are strongly associated with continuation in school.8 The evidence for developing countries is a little difficult to summarize easily.9 The literature on returns to cognitive skills in developing countries is restricted to a relatively limited number of countries: Ghana, Kenya, Morocco, Pakistan, South Africa, and Tanzania. Nonetheless, as Table ...