Hossain

The Economics of International Differences in Educational Achievement --Eric A. Hanushek --Ludger Woesmann National Bureau of Economic Research (NBER), Working paper 15494, April 2010

Presented by Md. Ismail Hossain PhD candidate in Labour Studies

Introduction Number of international assessments on identifying

the factors of educational achievement and impact of skills on economic and social outcomes, where individual skills are important but generally captured under the blanket of human capital. The concept of human capital is defined by Mincer (1970) in terms of school attainment. Very often school attainment is taken virtually as a synonym for human capital, which ignores other elements of skill development except family influence and governmental investments. These omitted elements are considered here as cognitive skills, an indication of human capital.

International consortia on Educational Achievement Research

 Program for International student Assessment (PISA)—testing math,

science and reading performance of 15-years olds on three years cycle since 2000  Trends in International Mathematics and Science Study (TIMSS) – testing math and science performance of eight graders on a four year cycle since 1995  Progress in International Reading Literacy Study (PIRLS)—testing primary school performance on a five year cycle since 2001

International Test of Educational Achievement  The first international test was ‘First International Mathematics Study

(FIMS) conducted in 1964 where 12 countries participated.  International Association for the Evaluation of Educational Achievement (IEA) developed a cooperative venture to test educational achievement where a set of nations voluntarily participated.  IEA efforts have been matched by an ongoing testing progrmme from the OECD and have expanded dramatically in terms of participating countries. While 29 countries in 1996, a total of 96 countries by 2007 and it will rise to 102 in 2011 . results may be influenced by differences in the extent  Criticism of samples, e. g., entire student population sample selection is a potential to undermine validity, a major source of bias

Purpose of this study The aim of this study is to look at the impacts of human capital on economic outcomes. Therefore, it starts from the measures of cognitive skills as a measure of human capital. The focus of this research covers two direction  To understand the underlying determinants of cognitive skills  Consequences of skill differences

Economic motivation  O=yH+Xβ+ε

………………….. (1) where , O is individual earnings H is Human capital X includes such things as labour market experience of the worker, gender and health status The question is how to measure human capital? Is it simply substituted by school attainments, S? Skills is affected by a number of factors including family inputs (F), quality and quantity of inputs provided by schools (qS), individual ability (A) and other relevant factors (Z) which include labour market experience, health and so forth. So the formula is like this; H= λF+ φ(qS)+ηA+αZ+v ………………………..(2)

Determinants of International Educational Achievement  International evidence on educational production functions

T = a0+a1F + a2R+a3I + a4 A+e ............... (3) Where, T—is the outcome of the educational production process F—is the facets of student and family background R—is a vector of measures of school resources I—is institutional features of schools and education systems and A—is individual ability

Determinants of International Educational Achievement  Student and family background Family inputs have long been viewed as a leading in educational production. For the test in math and science among the students controlling for the immigration status of student mother and father interacted with family background, the impact of multivariate analysis depicted that estimates are driven by the coeeficient of books available in the households  Books at home as a powerful proxy for the educational, social and economic background of the students families. Number of books at home is the reflection of parents education, household income and home resources.

Does school input matter?  Substantial increases in real school expenditure per student did not

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lead to improvements in student outcomes in most of the sample OECD and east Asian countries At the country level, Lee and Barro (2001) find a positive effect of smaller teacher student ratios, but Hanushek and Kimko (2000) find no such relationship Measures of teacher education tend to show positive associations with student achievement in cross-country analysis Shortages of materials tend to be negatively associated with student outcomes Teacher’s salary are positively associated with student achievement (Dolton and Marcenaro-Gutierrez, 2010)

Does school input matter?.....(2)  Class size effect is

systematically associated with the salary and education of the teaching force (Woessman and west, 2006; Woessman,2005).  The class size effect is tend to be larger in classes that are taught by teachers with lower education and also find indication of large class size effect in developing countries. (Altinok and Kingdon, 2009)  Little evidence have been found on teacher –student gender

interaction on student achievement (Ammermeller and Dolton, 2006)

Does school Input matter?....(3)  Aggregate financial measure of average expenditure per student

and average achievement

 This figure presents the international association between cumulative spending per student from age 6

to 15 and the average math achievement of 15 years old on the 2003 PISA test. Without considering the strong outliers of Mexico and Greece, there is no association between spending levels and average achievement across countires.

How do institutions matter for IEA? • Accountability—external exit exam, regular teachers’ monitoring of

student progress (Woessmann 2005, Fuchs and Woessmann, 2007; Woessmann, Luedemann, Schuetz and west, 2009; • Autonomy –student performs significantly better in schools that have autonomy in process and personnel decision which includes deciding on the purchase of supplies and on budget allocations within schools, hiring and rewarding teachers, and choosing text books, instructional methods and the like. (Woessmann, 2003; Fuchs and Woessmann 2007) • Private versus public management and finance—Students achievement in schools managed by private is tend to be higher than public management schools. Equal share of public and private funding boost up higher student performance than other combinations. • Tracking—placement of students into different school types hierarchically structured by performance; homogenous class and mix class.

How institutions matter for IEA?  This figure shows the

inequality in reading achievement in 4° grade (in PIRLS) and at age 15 (in PISA 2003) for all countries that participated in both studies, measuring educational inequality by the standard deviation in student test score.

Is there any relationship of cognitive skills and earning? ‘Mincer’s earning model’ is as follows;

 Where, y is labour market earnings

Exp is labour market experience W is a vector of other measure factors affecting incomes b1S is school attainments

How to measure cognitive skills?  Is it school attainment or years of schooling?  Association between quantitative measures of schooling and economic

growth—ignores the non schooling factors included in equation (2).  Is it simply substitution of S by H (human capital)?

School quality is assumed here as constant. Therefore, the extended model is to include cognitive skills as a measure of school quality. Y = b0+b1 S + b2Exp+b3Exp2 + b4W+ b5C +v ............... (5) But this model also excludes the non-school influence of cognitive skills, particularly from the family. Therefore, the modified model is; ∂y/∂S = b1 + b5 (∂C/∂S) ............... (6) Here, b1 is coefficient of S

What is the role of cognitive skills in economic growth?  Hanushek and Kim (2000)—

shows statistically and economically significantly effect of the cognitive skills on economic growth in 19602000 including the data from 37 countries  Hanushek and Woessman (2008, 2009)—have found relationship in test score and economic growth using data from 50 countries.

 Figure 13

What is the role of cognitive skills in economic growth?...  Based on the data from International Adult Literacy Survey in 14

OECD countries, Coulombe and Tremblay’s study (2006) shows that test score measure outperforms quantitative measures of education.  Jamison, Jamison and Hanushek (2007) study, controlling for a large number of potentially confounding variables and extending the time period of analysis, suggest that cognitive skill seem to improve income levels mainly through speeding up technological progress rather than shifting the level of the production function or increasing the impact of an additional year of schooling.  It can be concluded that cognitive skills are closely related to long-run

growth rates for countries.

Basic skill / Top performance and IQ?  Basic Skills and Top performance—Hanushek and Woessman’s study

(2009) use the micro data from each of the international assessments to calculate measures of the share of students’ skills by dividing into two groups;  Basic skills—one standard deviation below the OECD mean as the threshold of basic literacy and numeracy  Superior performance—one standard deviation above the OECD mean Their analysis suggest that both measures of test score distribution are significantly related to economic growth.  IQ differences have a strong and significant effect on growth rates even allowing for differences in school attainment.  IQ has a strong predictive power with economic growth and it makes earning differences (Jones and Schneider 2006, 2010) and  It is strongly correlated with the labour force quality (Hanushek and Kimko)  So, general conclusion is that school attainment appears less relevant when IQ measures are included in the analysis (Lynn and Vanhanen, 2002).

Basic skill / Top performance and IQ?...(2)  In contrary, PISA scores are better predictors of GDP per captia than

measures of IQ (Hunt and Wittmann, 2008) and there is very high correlations between IQ scores and either TIMSS or PISA scores.  The conclusion from the various model is that impact of national IQ scores on economic outcomes is that IQ provides another potential measure of cognitive skills.

Conclusion and future research agenda  This study highlights the crucial role of educational achievement in

understanding the vast international differences in economic wellbeing. It also suggests some key factors that account for the immense international differences in educational achievement  Regarding the future advances, it can include further institutional variation and making more use of regional information. Some unexplored issues, like, foreign languages, civic education and information technology, student morale and commitment, nondisruptive behaviour, disciplinary climate and tardiness etc can also be part of the analysis