## The Basic Skills Gap

## Source details

**Canonical URL:** [The Basic Skills Gap](https://www.imf.org/en/publications/fandd/issues/2022/06/basic-skills-gap-hanushek-woessmann)

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## Bibliographic details
- Authors: Eric Hanushek, LUDGER WOESSMANN
- Published: April 26, 2022

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### 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.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2022/06/basic-skills-gap-hanushek-woessmann_