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IT PAYS TO IMPROVE SCHOOL QUALITY: New Economic Analysis Pegs Economic Growth to Level of Student Achievement

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"If we are to achieve prolonged economic growth in our nation, we have little choice but to strengthen the skills of our people.”

Were every state to lift its student performance so that all of its students reached at least the basic level of the National Assessment of Educational Progress (NAEP), the economic impact on the United States would be at least $32 trillion,[1] according to a new economic analysis appearing in the Summer 2016 issue of Education Next. Should every state reach the level of Minnesota, the top-performing state in the analysis, the economic impact would be $76 billion, or more than four times the current gross domestic product (GDP) of the United States.

“As the skills of today’s students improve, the skills of tomorrow’s workers advance,” said coauthor Eric A. Hanushek, senior fellow at the Hoover Institution at Stanford University and research associate at the National Bureau of Economic Research.

Gains As A Precentage of Current GDP

As shown in the graphic to the right taken from the analysis, Mississippi, Alabama, Louisiana, New Mexico, and Hawaii would benefit the most were they to match Minnesota’s educational performance while North Dakota, Massachusetts, and other high-performing states that perform similar to Minnesota would see the least.

“Even in North Dakota and Massachusetts, the current value of gains over the next 80 years would amount to 70 percent of current state GDP,” the report notes.

The analysis, “It Pays to Improve School Quality: States That Boost Student Achievement Could Reap Large Economic Gains,” evaluates states’ educational performances based on a combination of eighth-grade math scores on NAEP, as well as math scores on the Programme for International Student Assessment (PISA) and the Trends in International Mathematics and Science Study (TIMSS), which help to adjust for individuals born outside of the United States.

The analysis notes that the nation’s new education law, the Every Student Succeeds Act (ESSA), “sharply diminished” the federal government’s role in school accountability, instead giving states much of the responsibility for improvements in student achievement.

“Large economic benefits should accrue to states that take advantage of this new flexibility,” the report notes. “Realizing these gains does require a sustained commitment on the part of a state’s political leaders. But such commitment to better schools has already given rise to dramatic gains in the United States (for instance, in Massachusetts) and abroad (as in South Korea). If we are to achieve prolonged economic growth in our nation, we have little choice but to strengthen the skills of our people.”

“It Pays to Improve School Quality: States That Boost Student Achievement Could Reap Large Economic Gains” is available at

http://educationnext.org/pays-improve-school-quality-student-achievement-economic-gain/.

[1] Economic gain over the expected lifetime of a person born today (80 years), expressed in trillions of 2015 dollars.

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