International Large Scale Assessment ConferenceEducation Testing Service

March 2011

The Role of International Assessments of Cognitive Skills in the Analysis of

Growth and Development

Eric A. HanushekStanford University

Ludger WoessmannUniversity of Munich, ifo Institute

Elements of Discussion

• Outcomes of education

• Determinants of education

Hanushek, Eric A., and Ludger Woessmann. "The economics of international differences in educational achievement." In Handbook of the Economics of Education, Vol. 3, edited by Eric A. Hanushek, Stephen Machin, and Ludger Woessmann. Amsterdam: North Holland, 2011: 89-200

Participation in IEA and OECD tests (through 2007)

0

5

10

15

20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Number of tests participated (1964-2007)

Num

ber o

f cou

ntrie

s

OECDnon-OECD

Studies of the Economic Consequences of Human Capital

Data source

Economic Consequences TOTAL

individual earnings equity aggregate

outcomes IEA 1 1 2 OECD Other 6 3 1 10 Combined 13 13 TOTAL 6 4 15 25

Returns to Cognitive Skills(International Adult Literacy Survey)

0

0.05

0.1

0.15

0.2

0.25

US

Netherlands

Sw

itzerland

Chile

Finland

Germ

any

Hungary

Italy

Denm

ark

Norw

ay

Czech

Sw

eden

Poland

Cognitive Skills and Economic Growth

Years of Schooling and Economic Growth

Without quality control

With quality control

Growth Projections

• Scenario 1- Achievement improves by 25 points (1/4 s.d.)

Annual Gains from 25 PISA-Points Improvement (1/4 std. dev.)

0%

10%

20%

30%

40%

50%

60%

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 2110

Perc

ent a

dditi

on to

ann

ual G

DP

Year

Annual Gains from 25 PISA-Points Improvement (1/4 std. dev.)

0%

10%

20%

30%

40%

50%

60%

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 2110

Perc

ent a

dditi

on to

ann

ual G

DP

Year

Annual Gains from 25 PISA-Points Improvement (1/4 std. dev.)

0%

10%

20%

30%

40%

50%

60%

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 2110

Perc

ent a

dditi

on to

ann

ual G

DP

Year

Growth Projections

• Scenario 1- Achievement improves by 25 points (1/4 s.d.)

- PV = 288% of current GDP- $123T for OECD- $43T for United States

Growth Projections

• Scenario 1- Achievement improves by 25 points (1/4 s.d.)

• Scenario 2- Everybody Achieves at Level of Finland

- PV = 645% of current GDP in OECD- $275T for OECD- $112 trillion for United States

Growth Projections

• Scenario 1- Achievement improves by 25 points (1/4 s.d.)

• Scenario 2- Everybody Achieves at Level of Finland

• Scenario 3- All students to 400 points (basic skills)

- PV = 530% of current GDP in OECD- $226T for OECD- $86 trillion for United States

Australia

Australia

Belgium

BelgiumCanada

Canada

Finland

Finland

France

FranceUK

UK

GermanyGermany

Italy

Italy

JapanJapanKorea

KoreaNetherlands

Netherlands

N. Zealand

N. ZealandNorway

Norway

Sweden

Sweden

USA

USA

460

480

500

520

540

560

1975 2000

Trends in Test Scores

Trends in Growth Rates vs. Trends in Test

Scores

School Performance in Peru

1

6

33

48

12

60

Never enrolled

dropout gr 1-5

dropout gr 5-9

finish gr 9 w/o basic skills

finish gr 9 with basic skills

Determinants of Human Capital

Data source

Determinants of Student Achievement

Achieve-ment equity TOTAL Unique

Studies

family background plus school inputs Institutions

within country

cross-country

within country

cross-country

IEA 15 2 1 2 1 21 20 OECD 6 4 3 7 2 22 20 Other 2 2 1 5 4 Combined 3 3 4 6 16 16 TOTAL 24 11 6 14 9 64 60

Resources and Performance across Countries

350

400

450

500

550

0 10000 20000 30000 40000 50000 60000 70000 80000

Math performance in PISA 2003

Cumulative educational expenditure per student

Mexico

BelgiumIceland

FranceSweden

SwitzerlandDenmark

AustriaNorway

USAItalyPortugal

Spain

Korea

GermanyIreland

Czech Rep.

HungaryPolandSlovak Rep.

Greece

FinlandNetherlands

CanadaJapan

AustraliaR 2 = 0.01

R 2 = 0.15

0.00

0.25

0.50

0.75

1.00

0% 2% 4% 6% 8% 10% 12%

s.d.

per

form

ance

gai

n

Percent deselected

high estimate of teacher effectiveness low estimate of teacher effectiveness

Canada

Finland

Alternative Estimates of Least Effective U.S. Teachers on Student Achievement

Central Exams, School Autonomy, and Student Performance

NoYes

No

Yes

55.5

76.2

23.7

0.00

10

20

30

40

50

60

70

80

Central exams

School autonomy over teacher salaries

TIMSS + TIMSS-R

Math test

score

Central Exams, School Autonomy, and Student Performance

NoYes

No

Yes

64.1 67.6

22.7

0.00

10

20

30

40

50

60

70

80

Central exams

Teacher influence on resource funding

TIMSS + TIMSS-R

Math test

score

Issues to be Addressed

Measurement

• Reliability at extremes (e.g., Peru)

• Intertemporal linkages

Causation

• Panel of individuals

Economic outcomes

• Labor market results

• Further schooling