Long-term economic impact of better skills

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Why quality in education mattersAnd what it takes to improve it

Egypt Education SummitLuxor, 18 March 2010

Andreas SchleicherEducation Policy Advisor of the OECD Secretary-General

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mat

ters 1. Know why you are looking

The yardstick for success is no longer just improvement by national standards…

… but the best performing education systems globally

2. Know what you are looking for The kind of ‘human capital’ that makes a

difference for individuals and nations

3. How do we recognise it when we found it?

The link between skills, and economic and social outcomes

4. Policy implications Understanding what contributes to the success of

education systems and improving performance .

AustraliaAustriaCzech RepublicDenmarkFinlandGermanyGreeceHungaryIcelandIrelandItalyJapanNetherlandsNew ZealandNorwayPolandPortugalSlovak RepublicSpainSwedenUnited KingdomUnited States

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)

Tertiary-type A graduation rate

A world of change – higher education

Graduate supply

Cost

per

stu

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0 10 20 30 40 50 60 700

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United States

Australia

Finland

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Imp

act

of

inte

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ion

al A

sse

ssm

en

ts

Know what you are looking for

The kind of human capital that makes a difference for people and nations

1313A

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mat

ters Latin America then…

Hanushek 2009

GDP/pop 1960

Years schooling

Asia 1891 4

Sub-Saharan Africa 2304 3.3

MENA 2599 2.7

Latin America 4152 4.7

Europe 7469 7.4

Orig. OECD 11252 9.5

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GDP/pop 1960

Years schooling

Asia 1891 4

Sub-Saharan Africa 2304 3.3

MENA 2599 2.7

Latin America 4152 4.7

Europe 7469 7.4

Orig. OECD 11252 9.5

Latin America then and now…

GDP/pop 1960

Years schooling

Growth 1960-2000

GDP/pop 2000

Asia 1891 4 4.5 13571

Sub-Saharan Africa 2304 3.3 1.4 3792

MENA 2599 2.7 2.7 8415

Latin America 4152 4.7 1.8 8063

Europe 7469 7.4 2.9 21752

Orig. OECD 11252 9.5 2.1 26147

Hanushek 2009

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Why quality is the key

Hanushek 2009

GDP/pop 1960

Years schooling

Growth 1960-2000

GDP/pop 2000

PISA testscore

Asia 1891 4 4.5 13571 480

Sub-Saharan Africa 2304 3.3 1.4 3792 360

MENA 2599 2.7 2.7 8415 412

Latin America 4152 4.7 1.8 8063 388

Europe 7469 7.4 2.9 21752 492

Orig. OECD 11252 9.5 2.1 26147 500

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Coverage of world economy 77%81%83%85%86%87%

OECD’s PISA assessment of the knowledge and skills of 15-year-olds

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High science performance

Low science performance

Average performanceof 15-year-olds in science – extrapolate and apply

616310

360

410

460

510

560

Finland

Hong Kong-ChinaCanadaChinese Taipei

Estonia JapanNew ZealandAustraliaNetherlandsLiechtenstein KoreaSloveniaGermanyUnited KingdomCzech Republic Switzerland

Macao-ChinaAustriaBelgiumIreland HungarySwedenPolandDenmark

France CroatiaIcelandLatvia

United States Slovak Republic,Spain,LithuaniaNorwayLuxembourgRussian Federation

ItalyPortugal Greece

Israel

TurkeyJordanThailand

RomaniaMontenegro Mexico

IndonesiaArgentinaBrazil

ColombiaTunisiaAzerbaijan

Qatar

Kyrgyzstan

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Imp

act

of

inte

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ion

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sse

ssm

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How do we know that we found it?

To what extent knowledge and skills matter for the success of individuals and economies

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Age 19

Age 21

Age 21

048

121620

Level 2Level 3

Level 4Level 5

Increased likelihood of postsec. particip. at age 19/21 associated with PISA reading proficiency at age 15

(Canada)after accounting for school engagement, gender, mother

tongue, place of residence, parental, education and family income (reference group PISA Level 1)

Odds ratioCollege entry

School marks at age 15

PISA performance at age

15

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Finland







Israel





Qatar

Kyrgyzstan

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20102011201220132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050205120522053205420552056205720582059206020612062206320642065206620672068206920702071207220732074207520762077207820792080208120822083208420852086208720882089209020912092209320942095209620972098209921002101210221032104210521062107210821092110-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Relationship between test performance and economic outcomes

Annual improved GDP from raising performance by 25 PISA pointsPe

rcent

add

itio

n t

o G

DP

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0

2000

4000

6000

8000

10000

12000

14000

Potential increase in economic output (bn $)

Increase average performance by 25 PISA points (Total 115 trillion $)

bn$

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Israel





Qatar

Kyrgyzstan

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0

2000

4000

6000

8000

10000

12000

14000 Potential increase in economic output (bn $)

Raise everyone to minimum of 400 PISA pointsbn$

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Mex

ico

Greec

eIta

ly

Unite

d St

ates

Pola

nd

Norway

Slov

ak R

epub

lic

Fran

ce

Austri

a

Icel

and

Czech

Rep

ublic

Unite

d Ki

ngdo

m

Austra

lia

Japa

n

Kore

a0%

200%

400%

600%

800%

1000%

1200%

Raise everyone to minimum of 400 PISA points% currrent

GDP

2727C

ounci

l, 1

8 S

ep

tem

ber

20

08

Ed

uca

tion a

t a G

lance

Some conclusions The higher economic outcomes that improved

student performance entails dwarf the dimensions of economic cycles

Even if the estimated impacts of skills were twice as large as the true underlying causal impact on growth, the resulting present value of successful school reform still far exceeds any conceivable costs of improvement.

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Implications

Understanding what contributes to the success of education systems and improving

performance

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Money matters - but other things do too

0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000400

425

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410

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f(x) = 0.000612701270434403 x + 462.612736410929R² = 0.19035445894851

Scienceperformance

Cumulative expenditure (US$ converted using PPPs)

Question:

If better education results in more money,

Does more money result in better education?

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Port

ug

al

Sp

ain

Sw

itze

rlan

d

Tu

rkey

Belg

ium

Kore

a

Lu

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bou

rg

Germ

an

y

Gre

ece

Jap

an

Au

stra

lia

Un

ited

Kin

gd

om

New

Zeala

nd

Fra

nce

Neth

erl

an

ds

Den

mark

Italy

Au

stri

a

Cze

ch

Rep

ub

lic

Hu

ng

ary

Norw

ay

Icela

nd

Irela

nd

Mexic

o

Fin

lan

d

Sw

ed

en

Un

ited

Sta

tes

Pola

nd

Slo

vak R

ep

ub

lic

-10

-5

0

5

10

15

Salary as % of GDP/capita Instruction time 1/teaching time 1/class sizePort

ug

al

Sp

ain

Sw

itze

rlan

d

Tu

rkey

Belg

ium

Kore

a

Lu

xem

bou

rg

Germ

an

y

Gre

ece

Jap

an

Au

stra

lia

Un

ited

Kin

gd

om

New

Zeala

nd

Fra

nce

Neth

erl

an

ds

Den

mark

Italy

Au

stri

a

Cze

ch

Rep

ub

lic

Hu

ng

ary

Norw

ay

Icela

nd

Irela

nd

Mexic

o

Fin

lan

d

Sw

ed

en

Un

ited

Sta

tes

Pola

nd

Slo

vak R

ep

ub

lic

-10

-5

0

5

10

15

Difference with OECD average

Spending choices on secondary schoolsContribution of various factors to upper secondary teacher compensation costs

per student as a percentage of GDP per capita (2004)

Percentage points

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High ambitions and universal

standards

Rigor, focus and coherence

Great systems attract great teachers and

provide access to best practice and quality

professional development

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Challenge and support

Weak support

Strong support

Lowchallenge

Highchallenge

Strong performance

Systemic improvement

Poor performance

Improvements idiosyncratic

Conflict

Demoralisation

Poor performance

Stagnation

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ters Human capital

International Best Practice• Principals who are trained,

empowered, accountable and provide instructional leadership

• Attracting, recruiting and providing excellent training for prospective teachers from the top third of the graduate distribution

• Incentives, rules and funding encourage a fair distribution of teaching talent

The past

• Principals who manage ‘a building’, who have little training and preparation and are accountable but not empowered

• Attracting and recruiting teachers from the bottom third of the graduate distribution and offering training which does not relate to real classrooms• The best teachers are in the most advantaged communities

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ters Human capital (cont…)

International Best Practice• Expectations of teachers are

clear; consistent quality, strong professional ethic and excellent professional development focused on classroom practice

• Teachers and the system expect every child to succeed and intervene preventatively to ensure this

The past

• Seniority and tenure matter more than performance; patchy professional development; wide variation in quality

• Wide achievement gaps, just beginning to narrow but systemic and professional barriers to transformation remain in place

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High ambitions

Access to best practice and quality professional development

Accountability and intervention in

inverse proportion to success

Devolved responsibility,

the school as the centre of action

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No

Yes

0

10

20

30

40

50

60

70

No

Yes

0

41

46

63

Standards based external

examinations School autonomyin selecting teachers for hire

PISA score in science

School autonomy, standards-based examinations and science performance

School autonomy in selecting teachers for hire

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Strong ambitions

Access to best practice and quality professional development

Accountability

Devolvedresponsibility,

the school as the centre of action

Integrated educational

opportunities

From prescribed forms of teaching and assessment towards personalised learning

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Imp

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•Principled•Strategic partnership

•Negotiated•Pragmatic .

•Top-down•Antagonistic .

•Leading•Evidence-driven•Achieving high reliability and innovation .

• Enabling• Incentivising

.

•World class performance.

•Continuous learning and innovation .

Good Great

•Accommodating•Evidence-based•Adopting best . practice

•Regulating .•Capacity-building

•Transparency .•Spreading best practice

• Implementing•Accepting evidence•Adopting minimum standards

•Prescribing .• Justifying

• Tackling underperformance

Adequate GoodPoor Adequate

Main focus of assessment

Role of government

Role of professions

Nature of relationship between government

and professions

Phases of development

Main outcomes

• Improvement in outcomes

•Reduction of public anxiety.

•Steady improvement

•Growing public satisfaction .

•Consistent quality•Public engagement and co-production .

Getting the order right

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Paradigm shifts

The old bureaucratic system The modern enabling system

Hit and miss Universal high standards

Uniformity Embracing diversity

Provision Outcomes

Bureaucratic look-up Devolved – look outwards

Talk equity Deliver equity

Prescription Informed profession

Conformity Ingenious

Curriculum-centred Learner-centred

Interactive Participative

Individualised Community-centred

Delivered wisdom User-generated wisdom

Management Leadership

Public vs private Public with private

Culture as obstacle Culture as capital

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ters

Thank you !

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Long-term economic impact of better skills

Education

Transcript of Long-term economic impact of better skills