High Cost Low Educ Performance OECD

8/3/2019 High Cost Low Educ Performance OECD

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AndreasSchleicher

25January2010

Thehighcostoflow

educationalperform

ance

The long-run economic impact of

improvements in learning outcomes

Lisbon Council, 25 January 2010

Andreas SchleicherEducation Policy Advisor of the OECD Secretary-General


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AndreasSchleicher

25January2010

Thehighcostoflow

educationalperform

ance In the current economic environment

Labour-market entry becomes more difficult as young graduates compete with experienced workers Job prospects for less qualified deteriorate

Young people with lower qualifications who becomeunemployed are likely to spend long time out of work

In most countries over half of low-qualified unemployed25-34-year-olds are long-term unemployed

Higher risks for systems with significant work-based training

Gaps in educational attainment between younger and

older cohorts likely to widen Opportunity costs for education decline

Dominated by lost earnings .


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Thehighcostoflow

educationalperform

ance

Economic impact of improvements

1.Know why you are looking The yardstick for success is no longerjust improvement by national standards

but the best performing education systemsglobally

2. Know what you are looking for The kind of human capital that makes a

difference for individuals and nations

3. How do we know that we found it? Measuring the impact of human capital

4. Implications Understanding what contributes to the success

of education and learning .


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1

6September2009

Im

pactof

in

ternationalAssessments

Know why you are lookingThe yardstick for success is no longer

just improvement by national standards

but the best performing education systems globally


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UnitedStates

0

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0 10 20 30 40 50 60 70

1995

ExpenditureperstudentatterRarylevel(USD)

TerarytypeAgraduaonrate

A world of change higher education

Graduate supply

Cost

per

student


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0

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1995




United States

Finland

Graduate supply

Cost

per

student

Germany


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Netherlands

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Expenditureperstudentatt

erRarylevel(USD)




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erRarylevel(USD)




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erRarylevel(USD)



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Council,1

8September2008

E

ducationataGlance

Moving targetsFuture supply of college graduates

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

China EU US

2006

2010

2015

2020


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8September2008

E

ducationataGlance


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16September2009

Im

pactof

in

ternationalAssessments

Know what you are looking for

Defining and measuring the kind of human capitalthat makes a difference for people and nations


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25January2010

T

hehighcostoflow

educationalperform

ance

7,34218,802

23,30640,036

40,26041,090

48,02448,714

55,69560,51963,414

64,66469,235

82,00785,586

104,410

127,691146,539

146,673

173,889186,307

-250,000 -150,000 -50,000 50,000 150,000 250,000 350,000 450,000

DenmarkSwedenNorway

New ZealandFranceTurkey

GermanyAustralia

SpainAustriaBelgiumFinlandCanada

OECD averageKorea

Ireland

HungaryPoland

Czech RepublicUnited States

ItalyPortugal

Foregone earnings Direct cost Gross earnings benefits Income tax effectSocial contribution effect Transfers effect Unemployment effect

USD equivalentA8.3

Components of the private net present valuefor a male with higher education

Net presentvalue in USDequivalent

35K$56K$ 367K$105K$27K$ 26K$ 170K$


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ance

Upper secondary and post-secondarynon-tertiary education

Tertiary Education

Public cost and benefits for a male obtaining upper secondary orpost-secondary non-tertiary education and tertiary education

Publicbenefits

Publiccosts

10,34614,23617,19717,85119,752

21,28023,87528,19336,73037,58647,36850,27151,95455,61257,22163,60463,75674,219

94,80496,186100,119

160,834

0 50,000 100,000 150,000 200,000

Net presentvalue, USD

equivalent(numbers inorange show

negative values)

A8.5USD equivalent

2,10935,524

28,76823,3509,652

4,27214,59911,242

27130,613

11,75523,857

14,05618,058

3,71113,959

5,32512,474

5,06512,314

32,2575,086

0 50,000 100,000 150,000 200,000

Turkey

Denmark

Sweden

NorwaySpain

Korea

Canada

New Zealand

France

Austria

Australia

PortugalOECD average

Finland

Poland

Germany

Italy

Ireland

Hungary

BelgiumUnited States

Czech Republic


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hehighcostoflow

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ance

Latin America then

Hanushek 2009

GDP/pop1960

Yearsschooling

Asia 1891 4

Sub-Saharan Africa2304 3.3

MENA 2599 2.7

Latin America 4152 4.7

Europe 7469 7.4

Orig. OECD 11252 9.5


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Latin America then and now

Hanushek 2009

GDP/pop1960

Yearsschooling

Growth1960-2000

GDP/pop2000

Asia 1891 4 4.5 13571

Sub-Saharan Africa 2304 3.3 1.4 3792

MENA 2599 2.7 2.7 8415

Latin America 4152 4.7 1.8 8063

Europe 7469 7.4 2.9 21752

Orig. OECD 11252 9.5 2.1 26147


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ance

Latin America then and nowWhy quality is the key

Hanushek 2009

GDP/pop1960

Yearsschooling

Growth1960-2000

GDP/pop2000

Testscore

Asia 1891 4 4.5 13571 480

Sub-Saharan Africa 2304 3.3 1.4 3792 360

MENA 2599 2.7 2.7 8415 412

Latin America 4152 4.7 1.8 8063 388

Europe 7469 7.4 2.9 21752 492

Orig. OECD 11252 9.5 2.1 26147 500


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ducationalperform

ance

OECDs PISA assessment of theknowledge and skills of 15-year-olds

Coverage of world economy 77%81%83%85%86%87%


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Average performanceof 15-year-olds inscience extrapolateand apply

High science performance

Low science performance 18 countries perform below this line

Poland


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IdentifyingRecognising issues that canbe investigated scientifically

Identifying keywords in ascientific investigation

Recognising the keyfeatures of a scientificinvestigation

ExplainingApplying knowledge ofscience in a situation

Describing or interpretingphenomena scientifically orpredicting change

Using evidence

Interpreting scientific

evidence and drawingconclusions

Identifying the assumptions,evidence and reasoningbehind conclusions

OECD Level 6OECD Level 2

Students can demonstrateability to understand andarticulate the complexmodelling inherent in the

design of an investigation.

Students can determine ifscientific measurement can beapplied to a given variable in aninvestigation. Students can

appreciate the relationshipbetween a simple model andthe phenomenon it is modelling.

Students can draw ona range of abstract scientificknowledge and concepts andthe relationships betweenthese in developingexplanations ofprocesses

Students can recall anappropriate, tangible,scientific fact applicable in asimple and straightforwardcontext and can use it toexplain or predict an outcome.

Students demonstrateability to compare and

differentiate amongcompeting explanations byexamining supportingevidence. They can formulatearguments by synthesisingevidence from multiplesources.

Students can point to anobvious feature in a simple

table in support of a givenstatement. They are able torecognise if a set of givencharacteristics apply to thefunction of everydayartifacts.


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60

40

20

0

20

40

60

80

100

NewZealand

Finland

UnitedKingdom

Aust

ralia

J

apan

Ca

nada

OECDave

rage

Portugal

Italy

Tu

rkey

Me

xico

UnitedSt

ates

K

orea

Level 6 Level 5 Level 4 Level 3 Level 2 Below Level 1%

530 563 515 527 531 534 500 474 475 424 410 489 522

Large proportion of top performers

Top and bottom performers in science

Large prop. of poor perf.

These students often confuse keyfeatures of a scientificinvestigation, apply incorrect

information, mix personal beliefswith facts in support of a position

These students can consistently identify,explain and apply scientific knowledge, linkdifferent information sources and

explanations and use evidence from these tojustify decisions, demonstrate advancedscientific thinking in unfamiliar situations


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Impactof

internationalAsses

sments

How do we know that we found it?

To what extent knowledge and skills matter for thesuccess of individuals and economies


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Level 2Level 3

Level 4Level 5

02468

1012

14161820

Age 19

Age 21

Age 21

Increased likelihood of tertiary particip. at age 19/21associated with PISA reading proficiency at age 15 (Canada)after accounting for school engagement, gender, mother tongue,

place of residence, parental, education and family income

(reference group PISA Level 1)Increased chance ofsuccessful tertiary participation

Schoolmarksatage15

PISAperform

anceatage1

5


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ducationalperform

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How knowledge and skills can impacton economic performance

Different theories(1) An aggregate production function where the output

of the macro economy is a direct function of thecapital and labour in the economy

The human capital component of growth comes throughaccumulation of more education that implies the economymoves from one steady state level to another; once at thenew level, education exerts no further influence on growth

Model is estimated by relating changes in GDP per workerto changes in education (and capital)


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ance


Different theories(2) Endogenous growth models

Education increases the innovative capacity of the economythrough developing new ideas and new technologies. A givenlevel of education can lead to a continuing stream of new

ideas, thus making it possible for education to affectgrowth even when no new education is added to theeconomy

Estimated through models that relate changes in GDP perworker to the level of education .


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Different theories(3) Diffusion of technologies

If new technologies increase firm productivity, countriescan grow by adopting these new technologies more broadly.Education may facilitate the transmission of knowledge

needed to implement new technologies .


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Estimating the relationship Link PISA to previous international assessments

in order to obtain historical data Requires tests to be put on a common scale

Estimate the impact of test performance on economicgrowth through growth regressions .


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Modelling the impact Programmes to improve cognitive skills through schools

take time to implement and to have their impact onstudents. Assume that it will take 20 years to implement reform

The impact of improved skills will not be realised untilthe students with greater skills move into the labourforce Assume that improved PISA performance will result in

improved skill-based of 2.5% of the labour-forceeach year

The economy will respond over time as newtechnologies are developed and implemented, makinguse of the new higher skills Estimate the total gains over the lifetime of the generation

born this year .


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0%

5%

10%

15%

20%

25%

30%

35%

40%

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 2110

Relationship between test performanceand economic outcomes

Annual improved GDP from raising performance by 25 PISA points

Percentadditio

ntoGDP


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E

ducationataGlance

0

2000

4000

6000

8000

10000

12000

14000

UnitedStates

Japan

Germany

UnitedKingdom

France

Italy

Mexico

Spain

Korea

Canada

Turkey

Australia

Poland

Netherlands

Belgium

Sweden

Greece

CzechRepublic

Austria

Norway

Switzerland

Portugal

Hungary

Denmark

Finland

Ireland

NewZealand

SlovakRepublic

Luxembourg

Iceland

Potential increase in economic output (bn $)

Increase average performance by 25 PISA points(Total 115 trillion $)

bn$


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EducationataGlance

0

2000

4000

6000

8000

10000

12000

14000

UnitedStates

Mexico

Turkey

Italy

Germany

Spain

France

UnitedKingdom

Poland

Greece

Portugal

Japan

Canada

Australia

Norway

Sweden

Belgium

Austria

Hungary

Netherlands

Denmark

Switzerland

CzechRepublic

Ireland

Korea

SlovakRepublic

Luxembourg

NewZealand

Iceland

Finland


Catching up with Finland(total 260 trillion $)

bn$


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EducationataGlance

0%

200%

400%

600%

800%

1000%

1200%

Mexico

Turkey

Greece

Portugal

Italy

Luxembourg

Spain

UnitedStates

Poland

Norway

SlovakRepublic

Hungary

Denmark

Germany

Iceland

France

Ireland

Sweden

Austria

Switzerland

Belgium

CzechRepublic

UnitedKingdom

Australia

NewZealand

Canada

Netherlands

Japan

Korea

Finland

Catching up with Finland(in percent of GDP)% currrent

GDP


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EducationataGlance

0

2000

4000

6000

8000

10000

12000

14000

UnitedStates

Mexico

Turkey

Germany

Italy

Japan

France

Spain

UnitedKingdom

Poland

Canada

Greece

Korea

Australia

Portugal

Belgium

Netherlands

Norway

Sweden

Austria

CzechRepublic

Switzerland

Hungary

Denmark

Ireland

SlovakRepublic

NewZealand

Luxembourg

Finland

Iceland


Raise everyone to minimum of 400 PISA pointsbn$


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EducationataGlance

0%

200%

400%

600%

800%

1000%

1200%

Mexico

Turkey

Greece

Portugal

Italy

Luxembourg

UnitedStates

Spain

Poland

Germany

Norway

Hungary

SlovakRepublic

Belgium

France

Denmark

Austria

Sweden

Iceland

Switzerland

CzechRepublic

Ireland

UnitedKingdom

NewZealand

Australia

Netherlands

Japan

Canada

Korea

Finland

Raise everyone to minimum of 400 PISA points% currrentGDP


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EducationataGlance

Some caveats

Do the statistical models used to characterise OECDgrowth between 1960 and 2000 accurately reflect theunderlying determinants of growth?

A changing impact of cognitive skills on technologicalchange and economic growth would directly affect the

specific estimates The present value of improved growth depends on the

general health and growth of individual economies,which again is simply projected according to thehistoric patterns of the OECD nations .


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EducationataGlance

Evidence on causality

Estimated relationship is little affected by includingother possible determinants of economic growth

Measures of geographical location, political stability,capital stock, population growth, and school inputs(pupil-teacher ratios and various measures of spending)

do not significantly affect the estimated impact ofcognitive skills The only substantial effect on the estimates is the inclusion

of various measures of economic institutions (security ofproperty rights and openness of the economy) which reducesthe estimated impact of cognitive skills by 15 percent .


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EducationataGlance

Evidence on causality

To tackle reverse-causality issues Separate the timing of the analysis by estimating

the effect of scores on tests conducted until theearly 1980s on economic growth in 1980-2000

Estimate shows a significant positive effect that is about twiceas large as the coefficient used in the simulations here

Reverse causality from growth to test scores is also unlikelybecause additional resource in the school system (which mightbecome affordable with increased growth) do not relatesystematically to improved test scores

Compare performance of immigrants Verify that changes in test scores over time lead tochanges in growth rates

To eliminate country-specific and cultural factors .


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EducationataGlance

Some conclusions

The higher economic outcomes that improved studentperformance would entail dwarfs the dimensions ofeconomic cycles

Even if the estimated impacts of skills were twice aslarge as the true underlying causal impact on growth,

the resulting present value of successful schoolreform still far exceeds any conceivable costs ofimprovement.


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EducationataGlance


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I

mpactof

i

nternationalAsses

sments

Implications

Understanding what contributes to the successof education systems and improving performance


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ance

Money matters - but other things do too

Australia

AustriaBelgium

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Italy

Japan

Korea

Mexico

NetherlandsNew Zealand

Norway

Poland

Portugal

Slovak Republic Spain

Sweden

Switzerland

Turkey

United Kingdom

United States

y=0.0006x+462R=0.1904

400

425

450

475

500

525

550

575

0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000

Scienceperformance

Cumulative expenditure (US$ converted using PPPs)

Question:

If better education results in more money,Does more money result in better education?


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-10

-5

0

5

10

15

Portugal

Spain

Switzerland

Turkey

Belgium

Korea

Luxembourg

Germany

Greece

Japan

Australia

UnitedKingdom

NewZealand

France

Netherlands

Denmark

Italy

Austria

CzechRepublic

Hungary

Norway

Iceland

Ireland

Mexico

Finland

Sweden

UnitedStates

Poland

SlovakRepublic

Salary as % of GDP/capita Instruction time 1/teaching time 1/class size

-10

-5

0

5

10

15

Portugal

Spain

Switzerland

Turkey

Belgium

Korea

Luxembourg

Germany

Greece

Japan

Australia

UnitedKingdom

NewZealand

France

Netherlands

Denmark

Italy

Austria

CzechRepublic

Hungary

Norway

Iceland

Ireland

Mexico

Finland

Sweden

UnitedStates

Poland

SlovakRepublic

Difference with OECD average

Spending choices on secondary schoolsContribution of various factors to upper secondary teacher compensation costs

per student as a percentage of GDP per capita (2004)

Percentage points


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ducationalperformance

High ambitions

and universal standardsRigor, focus and

coherence

Great systems attractgreat teachers and

provide access to best

practice and qualityprofessionaldevelopment


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educationalperformance

Challenge and support

Weak support

Strong support

Lowchallenge

Highchallenge

Strong performance

Systemic improvement

Poor performance

Improvements idiosyncratic

Conflict

Demoralisation

Poor performance

Stagnation


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Human capital

International Best PracticePrincipals who are trained,

empowered, accountable andprovide instructional leadership

Attracting, recruiting andproviding excellent training forprospective teachers from the topthird of the graduate distribution

Incentives, rules and fundingencourage a fair distribution ofteaching talent

The pastPrincipals who manage a building,

who have little training andpreparation and are accountablebut not empowered

Attracting and recruiting teachersfrom the bottom third of thegraduate distribution and offeringtraining which does not relateto real classrooms

The best teachers are in the mostadvantaged communities


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Human capital (cont)

International Best PracticeExpectations of teachers are

clear; consistent quality, strongprofessional ethic and excellentprofessional development focusedon classroom practice

Teachers and the system expectevery child to succeed andintervene preventatively to ensurethis

The pastSeniority and tenure matter more

than performance; patchyprofessional development; widevariation in quality

Wide achievement gaps, justbeginning to narrow but systemicand professional barriers totransformation remain in place


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High ambitions

Access to best practice

and quality professionaldevelopment

Accountabilityand intervention in

inverse proportion tosuccess

Devolvedresponsibility,

the school as thecentre of action


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No

Yes

0

10

20

30

40

50

60

70

NoYes

0

41

46

63

Standards basedexternal

examinationsSchool autonomyin selecting teachers for hire

PISA scorein science

School autonomy, standards-basedexaminations and science performance

School autonomy in selecting teachers for hire

P bli d i t h l


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Public and private schools

Private schoolsperform better

Public schoolsperform better

%

Score point difference

P l d i t ti l d t t ff t f l t d h l/


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Pooled international dataset, effects of selected school/system factors on science performance after accounting

for all other factors in the model

OECD (2007), PISA 2006 Science Competencies from Tomorrows World, Table 6.1a

30

20

10

0

10

20

30

40

50

60

70

80

90

100

Gross Net

Approx. oneschool year

Scorepointdifferenceinscience

Schools practicing abilitygrouping (gross and net)

Academically selectiveschools (gross and net) but

no system-wide effect

School results postedpublicly (gross and net)

One additional hour ofscience learning at school

(gross and net)

One additional hour of out-of-school lessons

(gross and net)

One additional hour ofself-study or homework

(gross and net)

School activities topromote science learning

(gross and net)

Schools with greaterautonomy (resources)

(gross and net)

Each additional 10% ofpublic funding(gross only)

Schools with morecompeting schools

(gross only)

School principals

perception that lack ofqualified teachers hinders

instruction(gross only)

School principals positive

evaluation of quality ofeducational materials(gross only)

Measured effect

Effect after accountingfor the socio-economic

background of students,schools and countries


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Strong ambitions

Access to best practice

and quality professionaldevelopment

Accountability

Devolvedresponsibility,

the school as the centreof action

Integratededucational

opportunities

From prescribedforms of teaching andassessment towardspersonalised learning



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DurchschnittlicheSchlerleistungen imBereich Mathematik

Low average performance

Large socio-economic disparities

High average performance

Large socio-economic disparities

Low average performance

High social equity

High average performance

High social equity

Strong socio-economic impact on

student performanceSocially equitable

distribution of learningopportunities


Low science performance

Early selection andinstitutional differentiationHigh degree of stratification

Low degree of stratification


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Education needs to prepare students to Deal with more rapid change than ever before

for jobs that have not yet been created using technologies that have not yet been invented to solve problems that we dont yet know will arise

Its not about more of the same, but about new Ways of thinking

involving creativity, critical thinking, problem-solving anddecision-making

Ways of working including communication and collaboration

Tools for working including the capacity to recognise and exploit the potential of

new technologies

The capacity to live in a multi-faceted world as activeand responsible citizens.


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Paradigm shifts

The old bureaucratic system The modern enabling system

Hit and miss Universal high standards

Uniformity Embracing diversity

Provision Outcomes

Bureaucratic look-up Devolved look outwards

Talk equity Deliver equity

Prescription Informed profession

Conformity Ingenious


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www.oecd.org; www.pisa.oecd.org All national and international publications The complete micro-level database

email: [email protected]

[email protected]

and remember:Without data, you are just another person with anopinion

Documents

High Cost Low Educ Performance OECD