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Economic growth and test scores on maths


A recent study provides evidence that test scores on cognitive skills in international tests have a significant effect on the growth in real GDP per capita in the period 1960-2000. According to the study, "test scores that are larger by one standard deviation (measured at the student level across all OECD countries in PISA) are associated with an average annual growth rate in GDP per capita that is two percentage points higher over the whole 40-year period. In sum, the existing evidence suggests that the quality of education, measured by the knowledge that students gain as depicted in tests of cognitive skills, is substantially more important for economic growth than the mere quantity of education". A recent growth scenario for OECD countries based on quite modest increase in each countries PISA score by 25 points over the next 20 years would increase the combined GDP of OECD countries by USD 115 trillion in present value terms.

If every OECD country were to raise its performance to the best performing country Finland, the increase in GDP will be more than double under the modest scenario. Even a fraction of this amount is achieved by increased effort to improve quality the gain will still be very significant. The different simulation of improvements in cognitive skills and increased economic growth "provide an indication of the cost of not improving schools".

References: The Role of School Improvement in Economic Development, Eric Hanushek and Ludger Woessmann, PEPG, January 2007

The High cost of low educational performance: The long-run economic impact of improving PISA outcomes, OECD 2010.

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