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The Role of School Improvement in Economic Development

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Author Info
Eric A. Hanushek
Ludger Woessmann

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Abstract

The role of improved schooling, a central part of most development strategies, has become controversial because expansion of school attainment has not guaranteed improved economic conditions. This paper reviews the role of education in promoting economic well-being, with a particular focus on the role of educational quality. It concludes that there is strong evidence that the cognitive skills of the population - rather than mere school attainment - are powerfully related to individual earnings, to the distribution of income, and to economic growth. New empirical results show the importance of both minimal and high level skills, the complementarity of skills and the quality of economic institutions, and the robustness of the relationship between skills and growth. International comparisons incorporating expanded data on cognitive skills reveal much larger skill deficits in developing countries than generally derived from just school enrollment and attainment. The magnitude of change needed makes clear that closing the economic gap with developed countries will require major structural changes in schooling institutions.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12832.

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Date of creation: Jan 2007
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Handle: RePEc:nbr:nberwo:12832

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Find related papers by JEL classification:
H4 - Public Economics - - Publicly Provided Goods
I2 - Health, Education, and Welfare - - Education
J0 - Labor and Demographic Economics - - General
O1 - Economic Development, Technological Change, and Growth - - Economic Development
O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Dee, Thomas S., 2004. "Are there civic returns to education?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1697-1720, August. [Downloadable!] (restricted)
  2. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Falch, Torberg & Fischer, Justina AV, 2008. "Does a generous welfare state crowd out student effort? Panel data evidence from international student tests," Working Paper Series in Economics and Finance 694, Stockholm School of Economics. [Downloadable!]
  2. Sascha O. Becker & Ludger Woessmann, 2007. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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  3. Schoellman, Todd, 2008. "The Causes and Consequences of Cross-Country Differences in Schooling Attainment," MPRA Paper 9243, University Library of Munich, Germany. [Downloadable!]
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