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The High Cost Of Low Educational Performance

EVENT-DAY video VIDEO (flash popup)



Featured Participants (in alphabetical order)
Eric Hanushek
, Paul and Jean Hanna Senior Fellow in Education,
Hoover Institution at Stanford University
Robert Rothman, Senior Fellow, Alliance for Excellent Education
Andreas Schleicher, Head, Indicators and Analysis Division, Directorate for Education,
Organisation for Economic Co-Operation and Development
Bob Wise, President, Alliance for Excellent Education

Relatively small improvements in students’ educational performance can have large impacts on a nation’s future economic well-being, according to The High Cost of Low Educational Performance: The Long-Run Economic Impact of Improving PISA Outcomes. PISA, the Program for International Student Assessment, was created by the Organisation for Economic Co-Operation and Development (OECD) in1997 to monitor the outcomes of education systems in terms of student achievement on a regular basis and within an internationally greed-common framework. This PISA report, to be presented on January 28 at the World Economic Forum in Davos, Switzerland, uses economic modeling to relate cognitive skills (as measured by PISA) to economic growth. The report shows that achievable gains in educational performance yield tens of trillions of dollars in gains in a nation’s gross domestic product.


On January 19, the Alliance for Excellent Education hosted an online forum to preview a new report by the Paris-based Organisation for Economic Co-Operation and Development (OECD), The High Cost of Low Educational Performance: The Long-Run Economic Impact of Improving PISA Outcomes. The report outlines findings from an international study that used economic modeling to show that even modest and achievable gains in student learning yield large increases in a nation’s gross domestic product over the long run. The report was officially released on January 25 at the World Economic Forum in Davos, Switzerland.

Robert Rothman, senior fellow at the Alliance for Excellent Education, opened the forum by describing the study as one that builds on other work, including that from the Alliance for Excellent Education, that links educational improvements not only to benefits to individual students but also to their larger communities. In the case of this study, which takes an international perspective on the topic, improvements in education are linked to improved economic outcomes for entire nations.

Andreas Schleicher, head of the Indicators and Analysis Division at the OECD’s Directorate for Education, set the stage by reminding viewers that this report comes out as the world is starting to exit a severe economic downturn where new workers entering the job market face stiff competition from those already in the market. As we have moved further into the twenty-first-century economy, he explained, an individual’s knowledge and skills are emerging as the predictor of his or her success in the work force, more so than education level, which had previously been thought to be the key determinant. Mr. Schleicher went on to identify the Programme for International Student Assessment (PISA)—an assessment of fifteen-year-old students administered by the OECD across the globe—as an instrument that can measure and compare the knowledge and skills of students in participating countries, thereby gauging the quality of their education systems. PISA scores over time, he explained, can be used to compare improvements in the quality of a nation’s education system to improvements in its economic health.

Eric Hanushek, the Paul and Jean Hanna senior fellow at the Hoover Institution of Stanford University and coauthor of The High Cost of Low Educational Performance, then discussed his findings for the United States based on the comparison that Mr. Schleicher described. He described three scenarios and the resulting impact on the nation’s economy for each.

  1. If PISA scores for the United States increased by 25 points over twenty years—what he identified as a modest goal, citing Poland’s similar improvement in just six years—the U.S. gross domestic product would grow by $40 trillion over the lifetime of a person born today.
  2. If the United States could increase its PISA scores to match Finland’s, a seventy-five point increase, the result would be an increase in gross domestic product of $100 trillion.
  3. If the United States could improve the scores of its lowest-achieving students, raising them up from a Level 1 to a Level 2 PISA score, the gross domestic product would grow by $72 trillion.

Dr. Hanushek went on to suggest how the United States could move toward these scenarios, positing that replacing the lowest-performing teachers in the country with teachers of just average effectiveness could improve the nation’s PISA scores dramatically; replacing the bottom six percent of the nation’s teachers could yield an increase of 50 points, while replacing the bottom ten percent could raise the nation’s PISA scores by 75 points.

During the question and answer period, Mr. Schleicher and Dr. Hanushek shared the following insights:

  • Although what students know is more essential to success than their years of education, students must stay in school to have the opportunity to learn and, unfortunately, the United States is eighteenth out of the thirty PISA-participating nations in high school completion rates.
  • While some may argue the heterogeneity of the student population creates challenges for the United States that make it difficult to compare educational outcomes internationally, in fact several PISA-participating nations have similar immigration patterns and therefore face similar challenges.
  • Higher-performing nations tend to have high standards for learning, have effective professional development to assist teachers in moving students towards meeting those standards, and have structures in place to attract the most effective teachers who are skilled in a highly individualized approach to teaching and learning.

Event-Day Agenda PDF filePDF
Speaker Biographies PDF filePDF
The High Cost of Low Educational Performance: The Long-Run Economic Impact of Improving PISA Outcomes  PDF fileReport (PDF)
Report Summary PDF filePDF 
“High Cost of Low Educational Performance”
 A PowerPoint presentation by Andreas Schleicher, OECD PDF filePDF
“High Cost of Low Educational Performance” A PowerPoint presentation by Eric Hanushek, a coauthor of the report PDF filePDF

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