Educating for prosperity

Improving students’ cognitive skills — as measured by math and science scores — speeds a nation’s economic growth, concludes Eric Hanushek and colleagues in Education Next. “A highly skilled work force can raise economic growth by about two-thirds of a percentage point every year,” researchers write. Increasing the years students spend in school doesn’t always pay off: It depends if they’re learning or warming the seats.

It’s not enough to educate a few “rocket scientists.” Fast-growth economies also bring most workers to a basic level of competence.

If the U.S. could figure out how to improve cognitive skills, there would be a huge benefit to the economy.

What would it mean for economic growth, then, if a country like the United States, currently performing somewhat below the average of OECD countries, managed to increase its performance by 50 points (or 0.5 standard deviations) so that it would score alongside the world leaders? (On average on the PISA 2006 math and science exams, countries such as Canada and Korea scored about 50 points higher than the U.S., Hong Kong and Taiwan about 60 points higher, and Finland as many as 74 points higher.)

In 1989, President George H. W. Bush and the nation’s governors vowed to achieve that 50-point gain by 2000. It didn’t happen.

(If it had) GDP would by 2015 be 4.5 percent greater than in the absence of any such gains (see Figure 4). That 4.5 percent increment in GDP is equal to the total the U.S. currently spends on K–12 education.

The U.S. has grown faster than most of our competitors for the past century, despite mediocre math and science scores. If we’re so average, why are we rich?

The U.S. may be living on past human capital, Hanushek speculates. (He doesn’t mention importing “rocket scientists” from other countries.) Or it may be the more open economy. Smarts are suppressed in closed economies and enhanced in open economies. The U.S. also benefits from our world-class university system, which is “a powerful engine of technological progress and economic growth.”

But our competitors are educating more students to higher levels, Hanushek writes. They’re opening their economies. The U.S. may not be able to stumble to prosperity forever.

13 Responses to “Educating for prosperity”


  1. 1 Reality Czech Apr 11th, 2008 at 10:17 am

    Possible explanations for outsized US performance vs. cognitive skills include: Immigration of high-performing workers; overstatement of US production (e.g. outsourced manufacturing counted as domestic).

  2. 2 Reality Czech Apr 11th, 2008 at 10:17 am

    I hate sites which strip HTML without so much as a by-your-leave.

  3. 3 linda seebach Apr 11th, 2008 at 10:28 am

    The authors do not address racial and ethnic disparities in cognitive skills, other than to observe that if counties with large East Asian populations (because they’re in East Asia) are removed from the analysis, the link between cognitive skills and economic grown is diminished.

    Do data from other countries allow calculation of their so-called “achievement gaps”? If so, what does the analysis show if data are disaggregated and results weighted to take demographic differences into account?

    If not, I’m not sure what these results signify, if anything.

  4. 4 Vital Core Apr 11th, 2008 at 12:08 pm

    The U.S. has grown faster than most of our competitors for the past century, despite mediocre math and science scores.

    We import much of our talent. Even back in the day, our best rocket scientists were imported from Germany in Operation Paperclip.

    Go check out the last names of any good university in the science fields (engineering/physics/computer science). I used to do it for sport: it goes Chinese, Indian, German, Japanese (in that order). They are nearly all from somewhere else. We suck.

    But don’t trust my word: if you look at the profs in the top 50 ranked US universities, Asians are 5-6 times as represented in engineering as their percentage of our population says they should be. Most of these folk are from somewhere else. I’m sorry, but this has got to have something to do with our poor science education.

    Why America? America has a superior political situation that allows for massive economic growth and opportunities for people who come here. I would point out that Japan (who was handed our political system after the war) has only 1/3 of our population, yet now produces 1/2 of our GDP with no natural resources. Think about it.

    And don’t for a minute dream America’s sorry educational system is helping. Just the opposite. We can’t steal people forever; I’ve even talked to some Chinese who have recently went back home for better opportunities.

  5. 5 Margo/Mom Apr 11th, 2008 at 1:52 pm

    I believe that our importation of brainpower from elsewhere has also been tied to our innovation and higher ed system, which are frequently draws.

    Linda asked about the ability to disaggregate other countries’ data for achievement gaps. OECD has a good bit of analysis regarding “equity” in PISA scores. Their SES data are based on an aggreggation of survey data inclusive of parental employment and education, books at home, those sorts of things. They tend to have a more profound effect here in the US than they do in some of the more highly scoring countries (Finland, Canada, Hong Kong). I believe that this is frequently because our high performers–who tend to be more advantaged–generally are on a par with their high performers. Their low performers, who tend to be lesser advantaged, generally perform at a higher level than our low performers. Lesson learned: our focus needs to be in improving the outcomes for those in the lower echelons.

  6. 6 david foster Apr 11th, 2008 at 3:46 pm

    Interesting, but I wonder to what degree the cognitive-skill measurement is serving as a proxy for other factors…for example, maybe the real cause-and-effect relationship for economic growth is with societal values like hard work and the belief that one has control over one’s own destiny.

  7. 7 Peter Apr 12th, 2008 at 8:14 am

    Quick - how many Finnish Nobel Prize Winners are there? Answer - 3; the last one in 1967.

    I agree that it would be a very good thing if US high school students did much better on international tests like PISA. But for various reasons, the US puts much less emphasis on high school education and much more emphasis on college education, which is why we have a pretty unimpressive high school system, but easily the best post-secondary system in the world. And since it is the college grads - and even more so the grad student grads - who are doing the competing. A student’s “cognitive ability” at 17 is useful to know - but his “cognitive ability” at age 22 or 25 or 27 is probably more important for a country’s competitiveness.

    Vital Core - I’m not sure where you got your Japan/US comparison, but I find Japan has a GNP per capita of $33,000, while the US has a per capita GNP of $44,000. Meaning that the US is substantially more productive on a per person basis.

    More generally, there seems to be this naive belief among some people that the US is somehow failing because we have a lot of immigrant engineers, etc. This is silly - because the US is disproportionately involved in the production of technology, the US is going to require a disproportionate number of engineers (and we already have 1.5 million). It’s not a sign of failure that the US can employ foreign engineers; it’s a sign of success.

  8. 8 Reality Czech Apr 12th, 2008 at 8:38 am

    It’s a sign of failure that our own students are eschewing engineering for other fields, and those foreign engineers are taking US-developed IP back to their home countries without compensation to the owners.

  9. 9 Vital Core Apr 12th, 2008 at 9:35 am

    Peter, the US is disproportionately involved in the production of technology

    Because we import our talent.

    + In 2000, 37% of all scientists and engineers with doctoral degrees living in the U.S. were born abroad (this was only 23% in 1990; we are in free-fall).

    + Scientists born abroad account for about one-third of all scientific production in biomedicine in the U.S. from the beginning of the 20th century up to now.

    + About a third of American Nobel laureates were born outside the United States (National Research Council Report).

    I’ve spoken with a graduate department head in math who wouldn’t take a single American if English wasn’t an issue. It is this bad.

  10. 10 jj Apr 12th, 2008 at 10:06 am

    I’m a foreign born prof and I agree that the general secondary education in the US is lacking. Even the rigor of a top public hs is usually no better — and in math, worse — than an above average school in Singapore or France. Even the top universities are falling down. The opportunities for a top student in the elite schools are tremendous. But the MINIMUM requirements are pathetic. The idea that you could finish in an Ivy and never demonstrate competence in calculus is a joke. Even Caltech, MIT, and Chicago (probably the most rigorous undergrad programs in the US) have inflated their grades compared to 30 years ago. The top students are tremendous, but the average is not forced to perform or fail.

    Here’s a testable claim: Take an average student at a mid-level state university and put him/her in any Ivy. My guess is that said student could find a way to make it through **some** soft major with a B average.

    That is not true in the top schools in many countries. These schools only select on academic criteria. There’s no way that the equivalent of a student with an 1800 on the SAT could make it through the very top schools in many countries.

    Having taught at top schools here, I’ve given up arguing with admissions people and their “holistic” approach. Thank the lord that graduate Phd admissions in technical fields are the last bastions of academic merit-only admissions. If the top 10 schools used the same principles for their undergrads they apply to their grads , at least a third of the students would be flunked out.

  11. 11 david foster Apr 12th, 2008 at 12:14 pm

    Also: what happens to a country’s economic productivity when a high proportion of those with strong conceptual skills are directed into fields which are not economically productive? Consider lawyers–some optimum number of lawyers is required to make our society function best, but surely the current number is greater than this optimum. Hence, the continued direction of highly intelligent people into law, in large numbers, is arguably a net economic deficit.

  12. 12 Peter Apr 12th, 2008 at 3:02 pm

    David - how many fewer lawyers do we need? After all, students are directed into this field by the job market, which demands lawyers. Why do you assume that the market is wrong? And how many more engineers do we need? Please explain how the employment market is wrong, since the number of employed engineers in many fields (EE, for example) appears to be shrinking.

    JJ - I understand your point about calculus and top schools, but I don’t really understand how society would be improved one tiny bit if grads of top schools had passed calculus. FWIW, I think it’s a shame that grads of top school - of all colleges, really - aren’t fluent in at least one foreign language (and 4 semesters does not equal fluency). I think that would improve society more than general knowledge of calculus).

    Vital Core: To some extent, certainly. But foreign students stayed because the tech market needed them; they they contributed to the tech market. And of course the vast majority of foreign born “talent” are also trained in the US because we have the better universities.

  13. 13 david foster Apr 12th, 2008 at 6:59 pm

    Peter…regarding the job market for lawyers, Shakespeare remarked that “two lawyers can thrive in a town where one would starve.” Excessive litigation can be profitable for the litigators at the expense of the broader society.

    I didn’t say anything at all about the demand for engineers.

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