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The Knowledge Capital of Nations: Education and the Economics of Growth
A rigorous, pathbreaking analysis demonstrating that a country's prosperity is directly related in the long run to the skills of its population.

In this book Eric Hanushek and Ludger Woessmann make a simple, central claim, developed with rigorous theoretical and empirical support: knowledge is the key to a country's development. Of course, every country acknowledges the importance of developing human capital, but Hanushek and Woessmann argue that message has become distorted, with politicians and researchers concentrating not on valued skills but on proxies for them. The common focus is on school attainment, although time in school provides a very misleading picture of how skills enter into development. Hanushek and Woessmann contend that the cognitive skills of the population--which they term the "knowledge capital" of a nation--are essential to long-run prosperity.

Hanushek and Woessmann subject their hypotheses about the relationship between cognitive skills (as consistently measured by international student assessments) and economic growth to a series of tests, including alternate specifications, different subsets of countries, and econometric analysis of causal interpretations. They find that their main results are remarkably robust, and equally applicable to developing and developed countries. They demonstrate, for example, that the "Latin American growth puzzle" and the "East Asian miracle" can be explained by these regions' knowledge capital. Turning to the policy implications of their argument, they call for an education system that develops effective accountability, promotes choice and competition, and provides direct rewards for good performance.
"1120681748"
The Knowledge Capital of Nations: Education and the Economics of Growth
A rigorous, pathbreaking analysis demonstrating that a country's prosperity is directly related in the long run to the skills of its population.

In this book Eric Hanushek and Ludger Woessmann make a simple, central claim, developed with rigorous theoretical and empirical support: knowledge is the key to a country's development. Of course, every country acknowledges the importance of developing human capital, but Hanushek and Woessmann argue that message has become distorted, with politicians and researchers concentrating not on valued skills but on proxies for them. The common focus is on school attainment, although time in school provides a very misleading picture of how skills enter into development. Hanushek and Woessmann contend that the cognitive skills of the population--which they term the "knowledge capital" of a nation--are essential to long-run prosperity.

Hanushek and Woessmann subject their hypotheses about the relationship between cognitive skills (as consistently measured by international student assessments) and economic growth to a series of tests, including alternate specifications, different subsets of countries, and econometric analysis of causal interpretations. They find that their main results are remarkably robust, and equally applicable to developing and developed countries. They demonstrate, for example, that the "Latin American growth puzzle" and the "East Asian miracle" can be explained by these regions' knowledge capital. Turning to the policy implications of their argument, they call for an education system that develops effective accountability, promotes choice and competition, and provides direct rewards for good performance.
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The Knowledge Capital of Nations: Education and the Economics of Growth

The Knowledge Capital of Nations: Education and the Economics of Growth

The Knowledge Capital of Nations: Education and the Economics of Growth

The Knowledge Capital of Nations: Education and the Economics of Growth

Overview

A rigorous, pathbreaking analysis demonstrating that a country's prosperity is directly related in the long run to the skills of its population.

In this book Eric Hanushek and Ludger Woessmann make a simple, central claim, developed with rigorous theoretical and empirical support: knowledge is the key to a country's development. Of course, every country acknowledges the importance of developing human capital, but Hanushek and Woessmann argue that message has become distorted, with politicians and researchers concentrating not on valued skills but on proxies for them. The common focus is on school attainment, although time in school provides a very misleading picture of how skills enter into development. Hanushek and Woessmann contend that the cognitive skills of the population--which they term the "knowledge capital" of a nation--are essential to long-run prosperity.

Hanushek and Woessmann subject their hypotheses about the relationship between cognitive skills (as consistently measured by international student assessments) and economic growth to a series of tests, including alternate specifications, different subsets of countries, and econometric analysis of causal interpretations. They find that their main results are remarkably robust, and equally applicable to developing and developed countries. They demonstrate, for example, that the "Latin American growth puzzle" and the "East Asian miracle" can be explained by these regions' knowledge capital. Turning to the policy implications of their argument, they call for an education system that develops effective accountability, promotes choice and competition, and provides direct rewards for good performance.

Product Details

ISBN-13: 9780262548953
Publisher: MIT Press
Publication date: 08/15/2023
Series: CESifo Book Series
Pages: 280
Product dimensions: 6.00(w) x 9.00(h) x (d)

About the Author

Eric A. Hanushek is Paul and Jean Hanna Senior Fellow and at the Hoover Institution of Stanford University. Hanushek and Woessmann are coauthors (with Paul E. Peterson) of Endangering Prosperity: A Global View of the American School.

Ludger Woessmann is Professor of Economics at the University of Munich and Director of the ifo Center for the Economics of Education.

Table of Contents

Series Foreword ix
Preface xi
1 Introduction 1
2 A Structure for Understanding Growth 9
3 Knowledge Capital and Growth: The Main Results 39
4 Causation 79
5 Developing Countries 109
6 Developed Countries 143
7 The Economic Value of Educational Reform 157
8 Policies to Improve Knowledge Capital 185
Notes 205
References 231
Index 255

What People are Saying About This

Dani Rodrik

Knowledge is the foundation of economic prosperity. Sensible as it sounds, this idea has been sidelined recently by studies that find measures of educational attainment to be poor predictors of economic growth and by explanations that focus on the quality of legal and political institutions instead. This book redresses the balance, powerfully demonstrating that conventional measures of schooling miss a big part of the picture. It places learning and cognitive skills at the front and center of the policy agenda—for developed and developing nations alike.

Daron Acemoglu

Attempts to put human capital as the fount of the huge differences in prosperity across nations have a mixed record. This thought-provoking book makes a strong argument that knowledge capital, which incorporates the crucial quality dimension of human capital, could be at the root of much of the variation we observe around the globe.

Endorsement

That Hanushek and Woessmann are world experts on researching with international test score and education data is very clearly demonstrated in this book. It makes essential reading for anyone interested in differences in growth and in education performance across countries.

—Stephen Machin, Professor of Economics, University College London, and Research Director, Centre for Economic Performance, London School of Economics

From the Publisher

Knowledge is the foundation of economic prosperity. Sensible as it sounds, this idea has been sidelined recently by studies that find measures of educational attainment to be poor predictors of economic growth and by explanations that focus on the quality of legal and political institutions instead. This book redresses the balance, powerfully demonstrating that conventional measures of schooling miss a big part of the picture. It places learning and cognitive skills at the front and center of the policy agenda—for developed and developing nations alike.

—Dani Rodrik, Albert O. Hirschman Professor, Institute for Advanced Study, and author of The Globalization Paradox

Attempts to put human capital as the fount of the huge differences in prosperity across nations have a mixed record. This thought-provoking book makes a strong argument that knowledge capital, which incorporates the crucial quality dimension of human capital, could be at the root of much of the variation we observe around the globe.

—Daron Acemoglu, Elizabeth and James Killian Professor of Economics, MIT

That Hanushek and Woessmann are world experts on researching with international test score and education data is very clearly demonstrated in this book. It makes essential reading for anyone interested in differences in growth and in education performance across countries.

—Stephen Machin, Professor of Economics, University College London, and Research Director, Centre for Economic Performance, London School of Economics

Stephen Machin

That Hanushek and Woessmann are world experts on researching with international test score and education data is very clearly demonstrated in this book. It makes essential reading for anyone interested in differences in growth and in education performance across countries.

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