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Hanushek, Eric Alan; Woessmann, Ludger
2015, 20150424, 20150410, 2015-05-26, 2015-04-24eBook, Book
In this book the authors make a simple, central claim, developed with rigorous theoretical and empirical support: knowledge is the key to a country's development. Of course, every country acknowledges the importance of developing human capital, but the authors argue that message has become distorted, with politicians and researchers concentrating not on valued skills but on proxies for them. The common focus is on school attainment, although time in school provides a very misleading picture of how skills enter into development. The authors contend that the cognitive skills of the population-which they term the "knowledge capital" of a nation-are essential to long-run prosperity. The authors subject their hypotheses about the relationship between cognitive skills (as consistently measured by international student assessments) and economic growth to a series of tests, including alternate specifications, different subsets of countries, and econometric analysis of causal interpretations. They find that their main results are remarkably robust, and equally applicable to developing and developed countries. They demonstrate, for example, that the "Latin American growth puzzle" and the "East Asian miracle" can be explained by these regions' knowledge capital. Turning to the policy implications of their argument, they call for an education system that develops effective accountability, promotes choice and competition, and provides direct rewards for good performance. (Orig.).
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