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The Effect of Raising School Quality on Earnings

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  • Patrinos, Harry Anthony
  • Psacharopoulos, George

Abstract

The evidence underscores the need to shift attention from school attainment to actual learning. While the average global return to an additional year of schooling is about 10 percent, a one standard deviation increase in test scores raises earnings by 15 percent. Studies show that including direct measures of skills reduces the estimated return to schooling, revealing the stronger role of quality. These findings suggest that education policy should prioritize learning outcomes, not just years in school, to more accurately reflect the economic value of education.

Suggested Citation

  • Patrinos, Harry Anthony & Psacharopoulos, George, 2025. "The Effect of Raising School Quality on Earnings," GLO Discussion Paper Series 1616, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1616
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    References listed on IDEAS

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    More about this item

    Keywords

    Returns to education; cognitive skills; earnings;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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