The Basic Skills Gap

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The Basic Skills Gap

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Bibliographic details

• Authors: Eric Hanushek, LUDGER WOESSMANN
• Published: April 26, 2022

Key issues highlighted

• (1) Skill differences account for three-quarters of cross-country variations in long-term growth.
• (2) The global skill deficit is immense, as two-thirds or more of the world’s youth do not reach even basic skill levels.
• (3) Reaching the goal of global universal basic skills would raise future world GDP by $700 trillion over the remainder of the century.

Achievement and growth

• Long-term growth depends primarily on the skills of the people (Hanushek and Woessmann 2015).
• Relevant economic skills are captured by international student achievement tests in math and science (for example, PISA, TIMSS).
• Achievement explains three-quarters of the variation in growth rates across countries.
• Years of schooling have no bearing on growth after accounting for what has actually been learned.
• Evidence presented to support causality:
  • Achievement tests up to the early 1980s predict subsequent growth.
  • Greater spending does not consistently raise achievement.
  • Using achievement variation arising from strong school institutions (accountability, school choice) yields the same link to faster growth.
  • Countries with increased achievement over time have subsequently shown increased growth rates.

The world picture of education

• Definition of basic skills: represented by mastering at least PISA Level 1 skills.
  • PISA Level 1: able to carry out obvious routine procedures according to direct instructions, but cannot draw direct inferences or reliably employ basic conventions to solve simple problems involving whole numbers.
• Global shortfall:
  • Two-thirds or more of the world’s young people fail to reach the minimum skill levels required to compete in the international economy.
  • Deficits are worldwide and most severe in the poorest countries.
• Six stylized facts summarizing global deficits:
  • At least two-thirds of the world’s youth do not obtain basic skills.
  • The share of young people who do not reach basic skills exceeds half in 101 countries and rises above 90 percent in 37 of these.
  • Even in high-income countries, a quarter of young people lack basic skills.
  • Skill deficits reach 94 percent in sub-Saharan Africa and 90 percent in south Asia, but they also hit 70 percent in Middle East and North Africa and 66 percent in Latin America.
  • While skill gaps are most apparent for the third of global youth not attending secondary school, fully 62 percent of the world’s secondary school students fail to reach basic skills.
  • Half of the world’s young people live in the 35 countries that do not participate in international testing, resulting in a lack of regular foundational performance information.
• Implication: It is not enough for all young people to be in school; the low quality of education in most developing economies must be addressed.

The economics of meeting the SDGs

• Primary development goal: endow all children (universal) in all countries (global) with at least basic skills via secondary schooling for all young people that is good enough to equip them with basic skills.
• International context:
  • In 2020, more than $161 billion was disbursed under official development assistance.
• Simulated impact using the growth relationship:
  • Present value of added world GDP over the remainder of the century from achieving global universal basic skills: $700 trillion, or five times current annual world GDP.
  • The gain is equivalent to 11 percent of the discounted future GDP over the same horizon.
  • Impact on developing regions (sub-Saharan Africa, south Asia, the Middle East and North Africa, and Latin America) would be multiples of their current GDP.
• Caveats:
  • Improvements would be difficult to achieve and would take time.
  • Economies need time to assimilate newly skilled workforces.

The new urgency (pandemic impact)

• The pandemic has changed educational outcomes for current cohorts; losses from school closures and reluctance to return will not disappear simply by restoring schools to their January 2020 performance (Hanushek and Woessmann 2020).
• Learning losses have been disproportionately severe for poor children in both developed and developing economies.
• Disruptions were greatest in a broad set of developing economies; example cited: school closures up to a record-breaking two years in Uganda.
• Recovery requires schools to be better than they were at the beginning of 2020.

Policy implications and recommendations

• Focus: unwavering attention on improving student achievement.
• Evidence-based policy directions:
  • Develop effective accountability systems.
  • Promote choice.
  • Emphasize teacher quality.
  • Provide direct rewards for good performance.
• Data and monitoring:
  • International development organizations should institute a regular, internationally standardized test in all countries of the global South, with tested content relevant for children who struggle to reach basic levels.
  • A globally comparative test would give policymakers better information to focus efforts, devise suitable policies, and monitor success.

Eric A. Hanushek and Ludger Woessmann, F&D Magazine, June 2022.