The Economic Value of Student Achievement Gains

Jan 26, 2016 by

by Sandy Kress –

I am absolutely fascinated by the recent publication of the working paper, “Economic Gains for U.S. States from Educational Reform.” The paper was authored by Eric A. Hanushek, Jens Ruhose, and Ludger Woessemann under the banner of the National Bureau of Economic Research. A summary of it can be found here: How to make the U.S 76 Trillion Richer.. An actual copy of the paper can be purchased online for a nominal fee.

Essentially, the paper shows that educational achievement strongly predicts economic growth across U.S. states. This is so, the authors show, because there is a strong relationship between growth in the states and the quality of the workforce. The paper consists mostly of an analysis of several models of how various amounts of improvement in the schools can  dramatically improve the workforce and, as a result, economic gains in our states and nation.

For example, the value of reform that would lift each state to the top-performing state would amount to an aggregate $76 trillion for the United States. This would obviously be an extraordinary contribution.

Even lesser levels of improvement, such as achieving a gain of 1/4 of a standard deviation on, say, 8th grade math performance on the National Assessment of Educational Progress (NAEP), would generate huge long term growth. Here future increases in state GDP would have a present value of 2.6 times current GDP. For California, this would be a present value of more than $6 trillion; for New York, $3.5 trillion.

There are models that look as well at the substantial gains that would be garnered by improving all students to the basic level on the NAEP or improving state achievement to the level of the best state in the region.

We can better understand the meaning of this analysis by considering the actual trajectory of NAEP performance over the past 15 years. On the 8th grade NAEP, all students improved 10 points from 2000 to 2009. This amounts to the significant improvement of roughly a grade level. Black students improved by 17 points, or over a grade level and a half, over this period; and Hispanics improved by 13 points. At least broadly, these gains, which one sees mirrored in several of the states, represent the improvement that could make a real difference to economic growth.

Look at Texas, for example. Students in Texas had been improving on 8th grade math since the state initiated a system of accountability in the early 90s. Black and Hispanic students improved by a stunning 40 scale score points from 1990 to 2011. This is an improvement of almost 4 grade levels.

Hanushek and his fellows demonstrate in the working paper the remarkable economic effect of getting all students to basic or above on the NAEP. In Texas, the percent of Black students at basic or above in 8th grade math went up from 17% in 1990 to 71% in 2011. During that same period, the percent of Hispanic students at basic or above in 8th grade math went up from 29% to 76%. These are remarkable leaps, the sort the paper suggests could make a significant difference in later economic growth.

Yet, if we are to experience the significant economic growth the authors are discussing, there must be sustained improvement along the lines of the models presented in the paper. Here is the bad news: nationally, and in most states, there was no improvement at all in 8th grade math from 2009 to 2015. In Texas, Black students lost 10 points, roughly a grade level, just from 2011 to 2015, and Hispanic students lost 6 points.

Hanushek, et.al, show that there truly is a huge payoff IF we can better prepare our young people to make up a more qualified and productive workforce in the future. We were on that path during the 2000s, albeit with a lot of additional improvement to make. But, we have eased up. We have slowed down. We lost our commitment to being accountable and doing what it takes to have continuous improvement in student achievement at a high level.

This highly important paper shows that while some may be happy and less pressured in this new world of decreased accountability, we and our children will pay a huge price in lost growth for the stagnation that has replaced steady academic gains.

The real bottom line question is this: what is in us and our politics that causes us to be generally unaware of the tremendous and consequential truths in this paper, unwilling to do what it takes to reap these benefits for ourselves and our children, and, worst of all, actually choose a path that will lead us away from such gains and benefits?

Source: The Economic Value of Student Achievement Gains | Sandy Kress

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