Economic growth and education quality

April 24, 2001

Free Market Foundation

Multinational studies have linked nations’ rates of economic growth with school enrolment rates the more schooling, the higher the growth rates.

But researchers Eric A. Hanushek at Stanford University and Dennis D. Kimko of the U.S. Institute for Defence Analyses think a better indicator would be the quality of education. In an article in the American Economic Review, they compare the scores from international science and mathematics achievement tests given to students in 39 nations between 1963 and 1995 with those nations’ per-capita growth rates over the same period.

They report that the test scores are far more closely correlated with growth rates than are differences in enrolment levels.

That’s because such scores, they claim, are a direct measure of the kind of cognitive skills that foster productivity and technological progress.

Since U.S. students consistently earned below-average science and mathematics scores in the international tests, how has America managed to maintain its technological lead?

The answer may be that Americans have made up in quantity what they lack in quality in other words, through greater high school and college enrolment rates.

But other nations with higher cognitive achievement scores are now rapidly catching up with the U.S. in terms of higher college enrolments. That suggests that if America wants to maintain its lead, it had better improve the quality of its education.

Source: Gene Koretz, Economic Trends: Keeping the U.S. High-Tech Edge, Business Week, April 16, 2001.

For more on Training and Education http://www.ncpa.org/pd/economy/econ5.html