Schooling, Labor-Force Quality, and the Growth of Nations
By ERIC A. HANUSHEK
AND

DENNIS D. KIMKO*

Direct measures of labor-force quality from international mathematics and science test scores are strongly related to growth. Indirect specification tests are generally consistent with a causal link: direct spending on schools is unrelated to student performance differences; the estimated growth effects of improved labor-force quality hold when East Asian countries are excluded; and, finally, home-country quality differences of immigrants are directly related to U.S. earnings if the immigrants are educated in their own country but not in the United States. The last estimates of micro productivity effects, however, introduce uncertainty …ver más…

A challenging problem made clear by this alternative, however, comes from the lack of adjustment for schooling quality. Few people, for example, would believe that a year of secondary schooling in the United States was equivalent to a year at the same grade level in Egypt. Indeed, Barro (1991) explored the inclusion of differences in real school resources as a crude measure of quality differences across countries in his growth regressions. While he found that the student-teacher ratio in primary schools in 1960 had a negative relationship to economic growth, the student-teacher ratio in secondary schools was statistically insignificant with a positive sign— giving little faith that these adequately captured any quality differences in schools. There is also a conceptual issue with many human-capital formulations of growth models, since continued growth arising from human capital frequently requires continued growth in human capital. Yet, for simple investment reasons one does not expect that years of schooling will expand in an unbounded manner. When phrased in terms of cognitive skills and human-capital quality, however, continual quality growth is more natural, and the underlying growth models are much more readily interpreted. This paper addresses the measurement problem of labor-force quality directly. Rather than concentrating on conventional measures of