How Much Do Educational Outcomes Matter in OECD Countries?

How Much Do Educational Outcomes Matter in OECD Countries?

Issue/Topic: Economic/Workforce Development
Author(s): Hanushek, Eric; Woessmann, Ludger
Organization(s): Hoover Institution; Ifo Institute for Economic Research and CESifo
Publication: National Bureau of Economic Research Working Paper
Published On: 1/1/2010

Existing growth research provides little explanation for the very large differences in long-term growth performance across the Organization for Economic Co-operation and Development (OECD) countries. Most of the robust results that exist refer either to the importance of basic economic institutions or to policies that affect short- to medium-term growth in developed countries. This study focuses on whether cognitive skills also matter in understanding growth differences among rich countries.

To examine whether improved human capital, measured by cognitive skills, has the potential for substantial improvements in the long term economic well-being of OECD countries


Education policy is closely associated with the long-term growth potentials of countries across the Organization for Economic Co-operation and Development (OECD).


Policy Implications/Recommendations:
  1. Without minimizing the need to deal with current unemployment conditions, paying attention to issues of longer-run economic growth may be more important for the welfare of nations.
  2. Many of the traditional policies of simply providing more funds for schools or of adding specific resources such as smaller classes, do not provide much hope for significant improvements in student achievement.
  3. A growing body of research shows that teacher quality is a primary driver of student achievement, but that differences in quality are not closely related to teacher education and experience. Because teacher quality is not easily measured and regulated, effective policies to improve quality appear to necessitate more careful attention to the incentives faced by schools and teachers.
  4. The economic gains from education reform are surely not reaped within matters of one or two political legislation periods. They rather require a long-run perspective that fully considers the time horizon of a child born today.

To access the full study:

Research Design:
Sensitivity analyses

International participants in 12 tests of math, science, or reading

Year data is from:
1964 - 2003


Data Collection and Analysis:
Analysis of 12 international tests of math, science, or reading that were administered to a voluntarily participating group of countries; the tests were given over the past 45 years in order to develop a single comparable measure of skills for each country that can be used to index skills of people in the labor force

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