NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Much Do Educational Outcomes Matter in OECD Countries?

Eric A. Hanushek, Ludger Woessmann

NBER Working Paper No. 16515
Issued in November 2010
NBER Program(s):Economics of Education, Economic Fluctuations and Growth, Labor Studies, Public Economics

Existing growth research provides little explanation for the very large differences in long-run growth performance across OECD countries. We show that cognitive skills can account for growth differences within the OECD, whereas a range of economic institutions and quantitative measures of tertiary education cannot. Under the growth model estimates and plausible projection parameters, school improvements falling within currently observed performance levels yield very large gains. The present value of OECD aggregate gains through 2090 could be as much as $275 trillion, or 13.8 percent of the discounted value of future GDP. Extensive sensitivity analyses indicate that, while differences between model frameworks and alternative parameter choices make a difference, the economic impact of improved educational outcomes remains enormous. Interestingly, the quantitative difference between an endogenous and neoclassical model framework - with improved skills affecting the long-run growth rate versus just the steady-state income level - matters less than academic discussions suggest. We close by discussing evidence on which education policy reforms may be able to bring about the simulated improvements in educational outcomes.

download in pdf format
   (372 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16515

Published: Eric A. Hanushek & Ludger Woessmann, 2011. "How much do educational outcomes matter in OECD countries?," Economic Policy, CEPR, CES, MSH, vol. 26(67), pages 427-491, 07. citation courtesy of

Users who downloaded this paper also downloaded* these:
Hanushek w16606 The Economic Value of Higher Teacher Quality
Freeman, Machin, and Viarengo w16293 Variation in Educational Outcomes and Policies across Countries and of Schools within Countries
Hanushek and Woessmann w15066 Schooling, Cognitive Skills, and the Latin American Growth Puzzle
Meghir and Rivkin w16003 Econometric Methods for Research in Education
Hanushek and Woessmann w15949 The Economics of International Differences in Educational Achievement
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us