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PDF Download Panel 1 Panel 1 define what is educationally allowable within a nation, the educational systems beyond one’s national bound- EERING OVER THE EDGE P H : aries suggest what is educationally possible”. HOW DO THE NEIGHBOURS Rather than comparing any given country to just one DO IT? other country, we should look at a whole sample of countries to see whether countries with certain poli- cies perform systematically differently – rather than LUDGER WOESSMANN being exceptions to the rule. This report is thus based Professor of Economics, University of Munich; Head on such systematic econometric cross-country of the Human Capital and Innovation Department, research.1 Ifo Institute Educational achievement is the key to economic With once cheap-labour countries such as China, prosperity India and others moving rapidly up the value chain, the only way for Europe to secure its prosperity is to Empirical research clearly shows that the cognitive remain innovative. Therefore, it comes as no surprise skills of the population, measured by international that businesses are clamouring for top-notch educa- student achievement tests such as TIMSS, PISA and tion and training systems that can tap, foster, cultivate their predecessors, are indeed leading predictors of and stimulate knowledge and talent. But Europe’s countries’ long-run growth in GDP per capita (see educational outcomes are still quite uneven. How can Figure 1). Because of this crucial role of basic skills, we identify the best approaches for improving the the following analysis concentrates on educational education system? policies at the school level. Figure 1 Learning from cross-country EDUCATIONAL ACHIEVEMENT AND ECONOMIC GROWTH analyses conditional growth 7 Singapore Countries differ widely in their 6 Switzerland Taiwan education policies and outcomes. Denmark Canada As a consequence, cross-country 5 Australia Hong Kong Korea comparisons provide a huge Portugal Thailand 4 Cyprus China Iceland Tunisia Ireland Italy Malaysia opportunity to learn which edu- USA Finland Indonesia Morocco France cation policies work and which 3 Norway Iran Brazil Greece Austria India UK Spain Belgium do not. As Arthur W. Foshay, a Mexico New Zealand Israel Netherlands 2 Chile South Africa Argentina Uruguay pioneer in international testing, Jordan Romania Colombia Egypt 1 Zimbabwe Turkey Sweden said in 1962 on the first pilot Ghana Japan Peru study of international student Philippines 0 achievement: “if custom and law 300 350 400 450 500 550 600 conditional test score 1 For a detailed survey of underlying cross- Note: Added-variable plot of a regression of the average annual rate of growth (in percent) of country research, see Hanushek, E.A. real GDP per capita in 1960-2000 on the initial level of real GDP per capita in 1960, average and L. Woessmann (2011), The Eco - years of schooling in 1960, and average test scores on international student achievement tests nomics of International Differences in (mean of unconditional variables added to each axis). Educational Achievement, in: Hanushek, E.A., S. Machin and L. Woessmann (eds.), Handbook of the Economics of Source: Own depiction based on Hanushek, E. A. and L. Woessmann, “Do Better Schools Education, Vol. 3, Amsterdam: North Lead to More Growth? Cognitive Skills, Economic Outcomes, and Causation”, Journal of Hol land, 89–200. Eco nomic Growth, forthcoming. CESifo Forum 3/2012 16 Panel 1 Figure 2 The incentives to produce high- SPENDING AND EDUCATIONAL ACHIEVEMENT ACROSS COUNTRIES quality education, in turn, are created by the institutions of the PISA 2009 math score 560 education system – the rules and regulations that explicitly or Finland 540 implicitly set rewards and penal- Netherlands ties for the people in volved in the 520 education process. Therefore, it is Germany Belgium Estonia important to get the rules and Slovenia Denmark regulations right. Changes in the 500 Slovak Rep. Austria Poland Sweden Czech Rep. France institutional structure and incen- Ireland Hungary UK Portugal tives of schools are also funda- 480 Spain Italy mental to improving teacher Greece quality, a crucial ingredient in 460 determining student achieve- 25 000 50 000 75 000 100 000 cumulative expenditure per student (US$, PPP) ment. What does this mean in practice? Existing research has Note: Regression line of best fit (without three outliers). shown that the following interre- Source: Own depiction based on data on math achievement of EU countries in PISA 2009. lated policies are important for better results. ‘Throwing money at schools’ is not the answer According to extensive available evidence, simply Competition providing more resources – direct spending, reduc- tions in class size, and the like – within the context of First, countries that have a large share of privately current school organization is very unlikely to lead operated schools and government funding for all to noteworthy improvements in student outcomes. schools perform systematically better on the interna- Contrary to what one might intuitively expect, coun- tional achievement tests. That is, students perform tries with higher spending or smaller classes simply better in countries with more competition from pri- do not perform systematically better (see Figure 2 vately operated schools and where public funding of for an example). Figure 3 PRIVATE VS. PUBLIC OPERATION AND FUNDING OF SCHOOLS AND Focus on institutions, incentives STUDENT ACHIEVEMENT and teacher quality math formance in PISA test scores (relative to lowest So, if more money or smaller category) classes will not work, what 80 70.9 would? The existing evidence 70 suggests that what matters is 60 the institutional structure of 50 schools. Foremost, the perfor- 33.9 40 mance of a system is affected by 36.9 30 the incentives that all the 20 high people involved in the educa- 10 average share of tion process face: if they are 0.0 low government funding 0 rewarded (extrinsically or in - low high trinsically) for producing better share of privately operated schools student achievement – or other- Note: Based on cross-country student-level multiple regressions using the PISA 2003 micro database. ‘Low’ and ‘high’ refer to the first and ninth decile on the international distribution wise face negative consequences of the two variables (0% and 55% in the case of private operation and 55% and 100% in the for not producing high achieve- case of government funding). ment – achievement is likely to Source: Woessmann, L., E. Luedemann, G. Schuetz and M.R. West (2009), School Account - improve. ability, Autonomy and Choice around the World, Cheltenham: Edward Elgar. 17 CESifo Forum 3/2012 Panel 1 Figure 4 Autonomy THE COMPLEMENTARITY OF EXTERNAL EXAMS AND SCHOOL AUTONOMY Third, once schools are held math performance in TIMSS/TIMSS-R accountable for their outcomes, test scores (relative to lowest category) and once a country operates at a reasonable level of development, 76.2 80 school autonomy leads to im - 70 proved student achievement, in 55.5 60 particular in decision-making 50 areas related to academic content 40 and to personnel (see Figure 4 for 4 30 an example). Thus, autonomy in local decision-making can help to 20 23.7 yes 10 ensure that individual schools 0.0 central exams no and their leaders take action to 0 no yes promote student achievement. school autonomy over teacher salaries Source: Woessmann, L. (2005), “The Effect Heterogeneity of Central Exams: Evidence from TIMSS, TIMSS-Repeat and PISA”, Education Economics 13, 143–169. De-tracking Apart from the overall level of such schools ensures that all families can make choic- achievement, education systems es (see Figure 3). Thus, a crucial aspect of successful also tend to aim for equality of opportunity for chil- school systems lies in the promotion of competition, dren from different family backgrounds. Thus, the so that parental demand will create strong incentives cross-country evidence suggests that tracking stu- to individual schools.2 dents into different types of schools at an early age leads to a stronger dependence of ultimate achieve- ment on family background, without any positive Accountability effect on achievement levels (see Figure 5). Second, countries with central school-leaving exams 4 For the most recent evidence on school autonomy stressing that a and other means that hold students, teachers, and reasonable level of development is a precondition for successful autonomy reforms, see Hanushek, E.A., S. Link and L. Woess - schools accountable for the achieved outcomes per- mann, “Does School Autonomy Make Sense Everywhere? Panel Estimates from PISA”, Journal of Development Economics, forth- form significantly better (see Figure 4). Another fea- coming. ture of successful school sys- tems is thus accountability sys- Figure 5 tems that identify good school EDUCATION POLICY AND EQUALITY OF OPPORTUNITY performance and lead to re - effect of family background on student achievement wards based on this. There is 30 28 28.8 also some indication that stu- raising pre-primary duration 26 by 1 year 25.6 dents perform better in coun- 24 22 23.1 tries that allow for teacher raising pre-primary enrolment 20 20.8 from 60% to 100% salaries to be adjusted based on 18 - 1.3 3 17.7 teaching performance. 16 16.8 - 4.4 - 4.3 14 14.0 12 tracking 4 years 10 2 For recent evidence that the effect of later 8 competition on educational achievement 8.3 is likely causal, see West, M.R. and L. 6 Woessmann (2010), “Every Catholic 4 Child in a Catholic School’: Historical Resistance to State School ing, Con - 2 temporary School Compe tition and 0 Student Achievement across Countries”, Eng- Ger- USA AustriaOECD Switzer- Finland France Economic Journal, 120(546), F229–F255. land many average land 3 See Woessmann, L. (2011), “Cross- Country Evidence on Teacher Perform - ance Pay”, Economics of Education Source: Own depiction based on Schütz, G., H.W. Ursprung and L. Woessmann (2008), Review 30, 404–418.
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