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Schooling, Cognitive Skills, and the Latin American Growth Puzzle

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  • Eric A. Hanushek
  • Ludger Woessmann

Abstract

Economic development in Latin America has trailed most other world regions over the past four decades despite its relatively high initial development and school attainment levels. This puzzle can be resolved by considering the actual learning as expressed in tests of cognitive skills, on which Latin American countries consistently perform at the bottom. In growth models estimated across world regions, these low levels of cognitive skills can account for the poor growth performance of Latin America. Given the limitations of worldwide tests in discriminating performance at low levels, we also introduce measures from two regional tests designed to measure performance for all Latin American countries with internationally comparable income data. Our growth analysis using these data confirms the significant effects of cognitive skills on intra-regional variations. Splicing the new regional tests into the worldwide tests, we also confirm this effect in extended worldwide regressions, although it appears somewhat smaller in the regional Latin American data than in the worldwide data.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2667.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2667

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  1. Hanushek, Eric A. & Wößmann, Ludger, 2008. "The role of cognitive skills in economic development," Munich Reprints in Economics 20454, University of Munich, Department of Economics.
  2. Jess Benhabib & Mark M. Spiegel, 2002. "Human capital and technology diffusion," Working Paper Series 2003-02, Federal Reserve Bank of San Francisco.
  3. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
  4. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
  5. Dennis D. Kimko & Eric A. Hanushek, 2000. "Schooling, Labor-Force Quality, and the Growth of Nations," American Economic Review, American Economic Association, vol. 90(5), pages 1184-1208, December.
  6. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
  7. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  8. Jere R. Behrman & Nancy Birdsall & Miguel Székely, 2007. "Economic Policy Changes and Wage Differentials in Latin America," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 57-97.
  9. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  10. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  11. Topel, Robert, 1999. "Labor markets and economic growth," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 44, pages 2943-2984 Elsevier.
  12. Eric A. Hanushek & Lei Zhang, 2006. "Quality-Consistent Estimates of International Returns to Skill," NBER Working Papers 12664, National Bureau of Economic Research, Inc.
  13. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  14. Eric A. Hanushek, 2002. "Publicly Provided Education," NBER Working Papers 8799, National Bureau of Economic Research, Inc.
  15. Robert J. Barro & Jong-Wha Lee, 1993. "International Comparisons of Educational Attainment," NBER Working Papers 4349, National Bureau of Economic Research, Inc.
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Cited by:
  1. Peter H. Lindert, 2009. "Revealing Failures in the History of School Finance," NBER Working Papers 15491, National Bureau of Economic Research, Inc.
  2. Arlette Beltrán & Janice Seinfeld, 2011. "Hacia una educación de calidad en el Perú: El heterogéneo impacto de la educación inicial sobre el rendimiento escolar," Working Papers 11-06, Departamento de Economía, Universidad del Pacífico, revised Sep 2011.
  3. Johannes Metzler & Ludger Woessmann, 2010. "The Impact of Teacher Subject Knowledge on Student Achievement: Evidence from Within-Teacher Within-Student Variation," CESifo Working Paper Series 3111, CESifo Group Munich.
  4. Leandro Prados de la Escosura, 2011. "Human Development in Africa: A Long-Run Perspective," Working Papers 0008, European Historical Economics Society (EHES).
  5. Felipe Barrera-Osorio & Darío Maldonado & Catherine Rodríguez, 2012. "Calidad de la Educación Básica y Media en Colombia: Diagnóstico y Propuestas," DOCUMENTOS CEDE 010321, UNIVERSIDAD DE LOS ANDES-CEDE.
  6. Hanushek, Eric A. & Woessmann, Ludger, 2012. "Schooling, educational achievement, and the Latin American growth puzzle," Journal of Development Economics, Elsevier, vol. 99(2), pages 497-512.
  7. Angrist, Noam & Patrinos, Harry Anthony & Schlotter, Martin, 2013. "An expansion of a global data set on educational quality : a focus on achievement in developing countries," Policy Research Working Paper Series 6536, The World Bank.
  8. Christian Daude, 2012. "Development Accounting: Lessons for Latin America," OECD Development Centre Working Papers 313, OECD Publishing.
  9. Juan Castro & Gustavo Yamada & Omar Arias, 2011. "Higher Education Decisions in Peru: On the Role of Financial Constraints, Skills, and Family Background," Working Papers 11-14, Departamento de Economía, Universidad del Pacífico, revised Dec 2011.

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