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Schooling, Cognitive Skills, and the Latin American Growth Puzzle

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Author Info
Eric A. Hanushek
Ludger Woessmann

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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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15066.

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Date of creation: Jun 2009
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Handle: RePEc:nbr:nberwo:15066

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Find related papers by JEL classification:
H4 - Public Economics - - Publicly Provided Goods
I2 - Health, Education, and Welfare - - Education
O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
N16 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Latin America; Caribbean

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  4. 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. [Downloadable!] (restricted)
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  7. Eric A. Hanushek & Lei Zhang, 2006. "Quality-Consistent Estimates of International Returns to Skill," NBER Working Papers 12664, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. 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. [Downloadable!] (restricted)
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  9. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-68, September.
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