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Study Pins US Economy to Student Test Scores

Susan Notes:

The authors criticize previous studies for an inaccurate measure of human capital which tie it to school attainment rather than actual skills. This translates, they contend, on mistaken emphasis on high school graduation and promotion of GED. In sum, "Economic analyses based just on whether a program affects school completion can distort both costs and benefits of programs, leading to incorrect decisions."

You can guess what's coming.

Since I live in Vermont, a state with declining school population, I admit to reacting badly to the authors' conclusions that "We find that there is a strong relationship between a state's growth and the quality of its workforce. Our measures of the human capital in each state directly link the productive skills of the workforce to the quality of schools in the state." I hear Texas population is so booming they'll soon have three more Congressional representatives. Does this really mean their schools are delivering more skills than Vermont?

I always go first to bibliographies, to see who's in and who's out. Note how often Hanusheck and partners reference themselves.

Economic Gains for US States from Educational Reform

Eric A. Hanushek
Hoover Institution
Stanford University
Stanford, CA 94305-6010
and NBER

Jens Ruhose
University of Munich
Ifo Institute for Economic Research and CESifo
Poschingerstr. 5
81679 Munich, Germany

Ludger Woessmann
University of Munich
Ifo Institute for Economic Research and CESifo
Poschingerstr. 5
81679 Munich, Germany

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.


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— Eric A. Hanushek et al with Ohanian comment



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