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Schooling, Cognitive Skills, and the Latin American Growth Puzzle

  • Eric A. Hanushek
  • Ludger Woessmann

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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Publication status: published as S c h o o l i n g , E d u c a t i o n a l A c h i e v e m e n t , a n d t h e L a t i n A m e r i c a n G r o w t h P u z z l e ( w i t h L u d g e r W o e s s m a n n ) . J o u r n a l o f D e v e l o p m e n t E c o n o m i c s , 9 9 ( 2 ) , N o v e m b e r 2 0 1 2 , p p . 4 9 7 - 5 1 2 .
Handle: RePEc:nbr:nberwo:15066
Note: ED EFG LS PE
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  1. Hanushek, Eric A. & Wößmann, Ludger, 2008. "The role of cognitive skills in economic development," Munich Reprints in Economics 20454, University of Munich, Department of Economics.
  2. 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.
  3. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
  4. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
  5. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  6. 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.
  7. Jess Benhabib & Mark M. Spiegel, 2002. "Human capital and technology diffusion," Working Paper Series 2003-02, Federal Reserve Bank of San Francisco.
  8. Alan Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," Working Papers 808, Princeton University, Department of Economics, Industrial Relations Section..
  9. 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.
  10. Cohen, Daniel & Soto, Marcelo, 2001. "Growth and Human Capital: Good Data, Good Results," CEPR Discussion Papers 3025, C.E.P.R. Discussion Papers.
  11. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  12. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  13. 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.
  14. 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.
  15. Eric A. Hanushek & Lei Zhang, 2006. "Quality-Consistent Estimates of International Returns to Skill," NBER Working Papers 12664, National Bureau of Economic Research, Inc.
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