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Schooling, Cognitive Skills, and the Latin American Growth Puzzle

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Author Info

  • Hanushek, Eric A.

    () (Stanford University)

  • Woessmann, Ludger

    () (Ifo Institute for Economic Research)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4576.

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Length: 36 pages
Date of creation: Nov 2009
Date of revision:
Publication status: published in: Journal of Development Economics, 2012, 99 (2), 497-512
Handle: RePEc:iza:izadps:dp4576

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Keywords: Latin America; cognitive skills; economic growth; human capital;

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References

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  1. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  2. Alan B. Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," NBER Working Papers 7591, National Bureau of Economic Research, Inc.
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  4. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  5. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  6. Robert J. Barro & Jong-Wha Lee, 1993. "International Comparisons of Educational Attainment," NBER Working Papers 4349, National Bureau of Economic Research, Inc.
  7. 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.
  8. 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.
  9. Eric A. Hanushek & Lei Zhang, 2006. "Quality-Consistent Estimates of International Returns to Skill," NBER Working Papers 12664, National Bureau of Economic Research, Inc.
  10. Hanushek, Eric A., 2002. "Publicly provided education," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 30, pages 2045-2141 Elsevier.
  11. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  12. Eric Hanushek & Ludger Wobmann, 2008. "The Role of Cognitive Skills in Economic Development," Discussion Papers 07-034, Stanford Institute for Economic Policy Research.
  13. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
  14. 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.
  15. 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.
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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. 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.
  3. 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.
  4. Christian Daude, 2012. "Development Accounting: Lessons for Latin America," OECD Development Centre Working Papers 313, OECD Publishing.

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