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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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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. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, American Economic Association, vol. 91(5), pages 1369-1401, December.
  3. Benhabib, Jess & Spiegel, Mark M., 2005. "Human Capital and Technology Diffusion," Handbook of Economic Growth, Elsevier, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 13, pages 935-966 Elsevier.
  4. Eric A. Hanushek & Lei Zhang, 2006. "Quality-Consistent Estimates of International Returns to Skill," NBER Working Papers 12664, National Bureau of Economic Research, Inc.
  5. Hanushek, Eric A., 2002. "Publicly provided education," Handbook of Public Economics, Elsevier, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 30, pages 2045-2141 Elsevier.
  6. Hanushek, Eric A. & Wößmann, Ludger, 2008. "The role of cognitive skills in economic development," Munich Reprints in Economics, University of Munich, Department of Economics 20454, University of Munich, Department of Economics.
  7. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 90(5), pages 1160-1183, December.
  8. Dennis D. Kimko & Eric A. Hanushek, 2000. "Schooling, Labor-Force Quality, and the Growth of Nations," American Economic Review, American Economic Association, American Economic Association, vol. 90(5), pages 1184-1208, December.
  9. 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.
  10. Alan B. Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," NBER Working Papers 7591, National Bureau of Economic Research, Inc.
  11. 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, University of Chicago Press, vol. 56, pages 57-97.
  12. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, Elsevier, vol. 32(3), pages 363-394, December.
  13. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  14. Topel, Robert, 1999. "Labor markets and economic growth," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 44, pages 2943-2984 Elsevier.
  15. Daniel Cohen & Marcelo Soto, 2001. "Growth and Human Capital: Good Data, Good Results," OECD Development Centre Working Papers 179, OECD Publishing.
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Cited by:
  1. 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, Departamento de Economía, Universidad del Pacífico 11-06, Departamento de Economía, Universidad del Pacífico, revised Sep 2011.
  2. Juan Castro & Gustavo Yamada & Omar Arias, 2011. "Higher Education Decisions in Peru: On the Role of Financial Constraints, Skills, and Family Background," Working Papers, Departamento de Economía, Universidad del Pacífico 11-14, Departamento de Economía, Universidad del Pacífico, revised Dec 2011.
  3. Leandro Prados de la Escosura, 2011. "Human development in Africa : a long-run perspective," Working Papers in Economic History wp11-09, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
  4. Peter H. Lindert, 2009. "Revealing Failures in the History of School Finance," NBER Working Papers 15491, National Bureau of Economic Research, Inc.
  5. Felipe Barrera-Osorio & Dario Maldonado & Catherine Rodríguez, 2012. "Calidad de la educación básica y media en Colombia: diagnóstico y propuestas," DOCUMENTOS DE TRABAJO, UNIVERSIDAD DEL ROSARIO 010078, UNIVERSIDAD DEL ROSARIO.
  6. Metzler, Johannes & Woessmann, Ludger, 2010. "The Impact of Teacher Subject Knowledge on Student Achievement: Evidence from Within-Teacher Within-Student Variation," IZA Discussion Papers 4999, Institute for the Study of Labor (IZA).
  7. Hanushek, Eric A. & Woessmann, Ludger, 2012. "Schooling, educational achievement, and the Latin American growth puzzle," Journal of Development Economics, Elsevier, Elsevier, vol. 99(2), pages 497-512.
  8. Christian Daude, 2012. "Development Accounting: Lessons for Latin America," OECD Development Centre Working Papers 313, OECD Publishing.
  9. 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.

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