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Economic Gains for U.S. States from Educational Reform

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  • Eric A. Hanushek
  • Jens Ruhose
  • Ludger Woessmann

Abstract

There is limited existing evidence justifying the economic case for state education policy. Using newly-developed measures of the human capital of each state that allow for internal migration and foreign immigration, we estimate growth regressions that incorporate worker skills. We find that educational achievement strongly predicts economic growth across U.S. states over the past four decades. Based on projections from our growth models, we show the enormous scope for state economic development through improving the quality of schools. While we consider the impact for each state of a range of educational reforms, an improvement that moves each state to the best-performing state would in the aggregate yield a present value of long-run economic gains of over four times current GDP.

Suggested Citation

  • Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2015. "Economic Gains for U.S. States from Educational Reform," CESifo Working Paper Series 5662, CESifo.
  • Handle: RePEc:ces:ceswps:_5662
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    Cited by:

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    2. Pierre Lefebvre & Philip Merrigan, 2020. "Les inégalités provinciales aux tests internationaux-nationaux de littéracie : Québec, Ontario et autres provinces canadiennes 1993-2018 (Version révisée et augmentée octobre 2020)," CIRANO Working Papers 2020s-29, CIRANO.
    3. Ali Ibrahim, 2020. "Issues in Higher Education: Analysis of 2017 Global Knowledge Index Data and Lessons Learned," Higher Education Studies, Canadian Center of Science and Education, vol. 10(1), pages 1-91, March.
    4. Polsitty R. Kumar & Giuseppe T. Cirella, 2020. "Globalization – Reflective Outlook," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 9(1), pages 42-50, March.
    5. Catherine Haeck & Pierre Lefebvre, 2020. "The Evolution of Cognitive Skills Inequalities by Socioeconomic Status across Canada," Working Papers 20-04, Research Group on Human Capital, University of Quebec in Montreal's School of Management.
    6. Jill Johnes & Maria Portela & Emmanuel Thanassoulis, 2017. "Efficiency in education," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(4), pages 331-338, April.

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    More about this item

    Keywords

    economic growth; human capital; cognitive skills; schooling; U.S. states;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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