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Schooling, educational achievement, and the Latin American growth puzzle

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  • Hanushek, Eric A.
  • Wößmann, Ludger

Abstract

Latin American economic development has been perceived as a puzzle. The region has trailed most other world regions over the past half century despite relatively high initial development and school attainment levels. This puzzle, however, can be resolved by considering educational achievement, a direct measure of human capital. We introduce a new, more inclusive achievement measure that comes from splicing regional achievement tests into worldwide tests. In growth regressions, the positive growth effect of educational achievement fully accounts for the poor growth performance of Latin American countries. These results are confirmed in a number of instrumental-variable specifications that exploit plausibly exogenous achievement variation stemming from historical and institutional determinants of educational achievement. Finally, a development accounting analysis finds that, once educational achievement is included, human capital can account for between half and two thirds of the income differences between Latin America and the rest of the world.

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Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 20399.

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Date of creation: 2012
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Publication status: Published in Journal of Development Economics 2 99(2012): pp. 497-512
Handle: RePEc:lmu:muenar:20399

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Citations

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Cited by:
  1. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
  2. CARRIERI, Vincenzo & D'AMATO, Marcello & ZOTTI, Roberto, 2013. "Selective Admission Tests and Students' Performances. Evidence from a Natural Experiment in a Large Italian University," CELPE Working Papers 0/00, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
  3. Hanushek, Eric A. & Schwerdt, Guido & Wiederhold, Simon & Woessmann, Ludger, 2013. "Returns to Skills around the World: Evidence from PIAAC," IZA Discussion Papers 7850, Institute for the Study of Labor (IZA).
  4. Baten, Joerg & Juif, Dácil, 2014. "A story of large landowners and math skills: Inequality and human capital formation in long-run development, 1820–2000," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 375-401.
  5. Metzler, Johannes & Wößmann, Ludger, 2012. "The impact of teacher subject knowledge on student achievement: Evidence from within-teacher within-student variation," Munich Reprints in Economics, University of Munich, Department of Economics 19216, University of Munich, Department of Economics.
  6. José Joaquín Brunner, 2013. "The Rationale for Higher Education Investment in Ibero-America," OECD Development Centre Working Papers 319, OECD Publishing.
  7. Hanushek, Eric A., 2013. "Economic growth in developing countries: The role of human capital," Economics of Education Review, Elsevier, vol. 37(C), pages 204-212.

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