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PENNSYLVANIA:
ECONOMIC FUTURE WITH
EDUCATIONAL REFORM
This file contains detailed projections and information from the article:
Eric A. Hanushek, Jens Ruhose, and Ludger Woessmann, “It pays to improve
school quality: States that boost student achievement could reap large economic
gains,” Education Next, Summer 2016
http://educationnext.org/pays-improve-school-quality-student-achievement-economic-gain/
U.S. and State Interests
• Future depends on skills of the population
• True for the nation and for individual states
• Improvements in student achievement return very large
economic returns to states
• Feasible gains would provide more incomes to state than total
spending on K-12 education
Cognitive Skills and Long Run Economic
Growth: International Evidence
Growth in GDP/pop over1960-2000 as related to math and science skills and
conditional on income levels in 1960
Test Scores and Growth: U.S. states
AL
AZ
ARCA
CO
CT
FL
GA
HI
ID
IL
IN
IAKS
KY
LA
ME
MD
MA
MI
MN
MS
MO
MT
NE
NV
NH
NJ
NM
NY
NC
ND
OH
OK
OR
PA
RI
SC
SD
TN
TX
UT
VT
VA
WA
WV
WI
1.5
22.5
3
Conditio
nal G
DP
per
capita g
row
th, 1970-2
010
460 470 480 490 500 510Conditional average test score
Growth in GDP/pop over1970-2010 for states as related to math
skills and conditional on income levels in 1970
Pennsylvania’s Position in the U.S.
• The economic performance of states is dependent upon
the skills of their populations.
• States compete with each other in terms of the skills of
their population.
• National Assessment of Educational Progress (NAEP) for
2013 tracks current schools
225
250
275
300
325
Ma
ssachusetts
New
Jers
ey
New
Ham
pshire
Ve
rmont
Min
nesota
Nort
h D
akota
Washin
gto
n
Colo
rado
Pe
nnsylv
ania
Ohio
Ka
nsas
Mo
nta
na
Wis
con
sin
Ma
ine
Te
xas
Virg
inia
Wyom
ing
Ind
ian
a
So
uth
Dakota
Mary
land
Idaho
Nort
h C
aro
lina
Connecticu
t
Iow
a
Nebra
ska
Illin
ois
Natio
nal
Uta
h
Rhode I
sla
nd
Ore
gon
Mis
souri
Dela
ware
New
York
Ala
ska
Haw
aii
Flo
rid
a
Ke
ntu
cky
Mic
hig
an
So
uth
Caro
lina
Arizona
Georg
ia
Nevada
Ark
ansas
Te
nnessee
Calif
orn
ia
Okla
hom
a
West V
irgin
ia
New
Me
xic
o
Louis
iana
Mis
sis
sip
pi
Ala
ba
ma
Dis
tric
t of C
olu
mb
ia
NA
EP
Sc
ore
NAEP 8th Grade Mathematics, 2013Pennsylvania is at 55th percentile of U.S. distribution
Pennsylvania is at 38th percentile of Massachusetts distribution
250
275
300
325
Dis
tric
t of C
olu
mb
ia
Ma
ssachusetts
New
Jers
ey
Min
nesota
Te
xas
Colo
rado
Ma
ryla
nd
Pe
nn
sylv
an
ia
New
Ham
pshire
Connecticu
t
Ve
rmont
Nort
h C
aro
lina
Illin
ois
Washin
gto
n
Virg
inia
Wis
con
sin
Ka
nsas
Ala
ska
Nort
h D
akota
Ohio
Natio
na
l
Arizona
New
York
So
uth
Dakota
Rhode I
sla
nd
Dela
ware
Mo
nta
na
India
na
Nebra
ska
So
uth
Caro
lina
Georg
ia
Calif
orn
ia
Flo
rid
a
Idaho
Uta
h
Wyom
ing
Haw
aii
Ore
gon
Ma
ine
New
Me
xic
o
Iow
a
Neva
da
Mis
souri
Mic
hig
an
Ark
ansas
Mis
sis
sip
pi
Louis
iana
Te
nnessee
Ke
ntu
cky
Okla
hom
a
Ala
ba
ma
West V
irgin
ia
NA
EP
Sc
ore
NAEP 8th Grade Mathematics, White Students, 2013Pennsylvania is at 53rd percentile of U.S. distribution
Pennsylvania is at 39th percentile of Massachusetts distribution
Projection Methodology
• Educational improvements steady until reaching the post-
2015 goals in 2030
• Work life of 40 years
• Growth rate is based on the average skill of workers
• Consider horizon of somebody born today (80 years)
• Future gains in GDP are discounted to the present with a
3% discount rate
• Implies the projections are directly comparable to current levels of
GDP
Value of Improvement to Pennsylvania
1. Increasing average achievement by ¼ standard
deviation.
2. Bringing each state up to the best state (Minnesota).
3. Bringing each state up to the best in the geographic
division (New Jersey).
4. Bringing all students in a state up to the NAEP basic
level.
5. Scenario 2 with single state improvement.
6. Equaling Canada
7. Equaling Finland
2. Equal Minnesota level: 269% of current GDP
0
200
400
600
800
1000
1200
Mis
siss
ipp
iA
lab
ama
Lou
isia
na
New
Mex
ico
Haw
aii
Cal
ifo
rnia
Ark
ansa
sW
est
Vir
gin
iaTe
nn
esse
eN
evad
aG
eorg
iaFl
ori
da
Ari
zon
aO
klah
om
aK
entu
cky
Rh
od
e Is
lan
dSo
uth
Car
olin
aU
SAD
elaw
are
No
rth
Car
olin
aN
ew Y
ork
Illin
ois
Mic
hig
anM
isso
uri
Mar
ylan
dTe
xas
Ala
ska
Uta
hV
irgi
nia
Pen
nsy
lvan
iaO
hio
Ind
ian
aO
rego
nId
aho
Co
lora
do
Was
hin
gto
nW
yom
ing
Co
nn
ecti
cut
Neb
rask
aM
ain
eN
ew J
erse
yK
ansa
sW
isco
nsi
nSo
uth
Dak
ota
Iow
aN
ew H
amp
shir
eV
erm
on
tM
on
tan
aM
assa
chu
sett
sN
ort
h D
ako
taM
inn
eso
ta
Pre
sen
t V
alu
e o
f St
ate
GD
P
3. Equal New Jersey level: 99% of Current GDP
0
100
200
300
400
500
600
700
800
New
Mex
ico
Nev
ada
Haw
aii
Cal
ifo
rnia
Rh
od
e Is
lan
dA
rizo
na
Lou
isia
na
Mis
siss
ipp
iM
isso
uri
Wes
t V
irgi
nia
Ala
bam
aA
rkan
sas
Geo
rgia
Flo
rid
aIll
ino
isM
ich
igan
Uta
hN
ew Y
ork
USA
Sou
th C
aro
lina
Neb
rask
aId
aho
Co
nn
ecti
cut
Co
lora
do
Kan
sas
Wyo
min
gO
klah
om
aTe
nn
esse
eSo
uth
Dak
ota
Iow
aM
ain
eD
elaw
are
No
rth
Car
olin
aO
hio
Ind
ian
aP
enn
sylv
ania
Ala
ska
New
…M
aryl
and
Ver
mo
nt
No
rth
Dak
ota
Ore
gon
Ken
tuck
yM
assa
chu
sett
sM
inn
eso
taM
on
tan
aN
ew J
erse
yTe
xas
Vir
gin
iaW
ash
ingt
on
Wis
con
sin
Pre
sen
t V
alu
e o
f St
ate
GD
P
Division Leaders
4. All students to basic: 165% of state GDP
0
50
100
150
200
250
300
350
Cal
ifo
rnia
Ala
bam
aM
issi
ssip
pi
Ten
nes
see
Lou
isia
na
New
Mex
ico
Ari
zon
aH
awai
iW
est
Vir
gin
iaN
evad
aFl
ori
da
Geo
rgia
Sou
th C
aro
lina
New
Yo
rkA
rkan
sas
Mic
hig
anU
SAO
rego
nR
ho
de
Isla
nd
Ala
ska
Mis
sou
riK
entu
cky
Illin
ois
Mar
ylan
dP
enn
sylv
ania
Uta
hO
klah
om
aD
elaw
are
No
rth
Car
olin
aW
ash
ingt
on
Neb
rask
aC
on
nec
ticu
tIo
wa
Vir
gin
iaId
aho
Ind
ian
aM
ain
eW
isco
nsi
nC
olo
rad
oO
hio
Kan
sas
Ver
mo
nt
Wyo
min
gN
ew J
erse
yN
ew H
amp
shir
eTe
xas
Mo
nta
na
Sou
th D
ako
taM
inn
eso
taM
assa
chu
sett
sN
ort
h D
ako
ta
Pre
sen
t V
alu
e o
f St
ate
GD
P
5. Single v. All States Improve to Best
0
200
400
600
800
1000
1200
Mis
siss
ippi
Ala
bam
a
Loui
sian
a
New
Mex
ico
Haw
aii
Calif
orni
a
Ark
ansa
s
Wes
t V
irgi
nia
Tenn
esse
e
Nev
ada
Geo
rgia
Flor
ida
Ari
zona
Okl
ahom
a
Kent
ucky
Rho
de Is
land
Sout
h Ca
rolin
a
USA
Del
awar
e
Nor
th C
arol
ina
New
Yor
k
Illin
ois
Mic
higa
n
Mis
sour
i
Mar
ylan
d
Texa
s
Ala
ska
Uta
h
Vir
gini
a
Penn
sylv
ania
Ohi
o
Indi
ana
Ore
gon
Idah
o
Colo
rado
Was
hing
ton
Wyo
min
g
Conn
ecti
cut
Neb
rask
a
Mai
ne
New
Jer
sey
Kans
as
Wis
cons
in
Sout
h D
akot
a
Iow
a
New
Ham
pshi
re
Ver
mon
t
Mon
tana
Mas
sach
uset
ts
Nor
th D
akot
a
% o
f cur
rent
GD
P
Single-state improvement All states improve to top-performing state
International Challenge
• Unfortunately the challenge extends beyond U.S. borders
and includes countries around the world.
• Other countries are producing students with both more
education and better education.
6. Equal Canadian level: 276% of current GDP
0
200
400
600
800
1,000
1,200
Mis
siss
ipp
iA
lab
ama
Lou
isia
na
New
Mex
ico
Haw
aii
Cal
ifo
rnia
Ark
ansa
sW
est
Vir
gin
iaTe
nn
esse
eN
evad
aG
eorg
iaFl
ori
da
Ari
zon
aO
klah
om
aK
entu
cky
Rh
od
e Is
lan
dSo
uth
Car
olin
aU
SAD
elaw
are
No
rth
Car
olin
aN
ew Y
ork
Illin
ois
Mic
hig
anM
isso
uri
Mar
ylan
dTe
xas
Ala
ska
Uta
hV
irgi
nia
Pen
nsy
lvan
iaO
hio
Ind
ian
aO
rego
nId
aho
Co
lora
do
Was
hin
gto
nW
yom
ing
Co
nn
ecti
cut
Neb
rask
aM
ain
eN
ew J
erse
yK
ansa
sW
isco
nsi
nSo
uth
Dak
ota
Iow
aN
ew H
amp
shir
eV
erm
on
tM
on
tan
aM
assa
chu
sett
sN
ort
h D
ako
taM
inn
eso
ta
Pre
sen
t V
alu
e o
f St
ate
GD
P
7. Equal Finnish level: 336% of current GDP
0
200
400
600
800
1,000
1,200
Mis
siss
ipp
iA
lab
ama
Lou
isia
na
New
Mex
ico
Haw
aii
Cal
ifo
rnia
Ark
ansa
sW
est
Vir
gin
iaTe
nn
esse
eN
evad
aG
eorg
iaFl
ori
da
Ari
zon
aO
klah
om
aK
entu
cky
Rh
od
e Is
lan
dSo
uth
Car
olin
aU
SAD
elaw
are
No
rth
Car
olin
aN
ew Y
ork
Illin
ois
Mic
hig
anM
isso
uri
Mar
ylan
dTe
xas
Ala
ska
Uta
hV
irgi
nia
Pen
nsy
lvan
iaO
hio
Ind
ian
aO
rego
nId
aho
Co
lora
do
Was
hin
gto
nW
yom
ing
Co
nn
ecti
cut
Neb
rask
aM
ain
eN
ew J
erse
yK
ansa
sW
isco
nsi
nSo
uth
Dak
ota
Iow
aN
ew H
amp
shir
eV
erm
on
tM
on
tan
aM
assa
chu
sett
sN
ort
h D
ako
taM
inn
eso
ta
Pre
sen
t V
alu
e o
f St
ate
GD
P
Summary of Improvement: Pennsylvania
Improvement
Discounted
reform
billion $’s % current GDP
% future GDP
without reform
1. ¼ stnd deviation 1,824 262 5.6
2. Equal Minnesota 1,872 269 5.8
3. Equal division best (NJ) 689 99 2.1
4. All at least basic 1,151 165 3.5
5. Single state to best (MN) 1,182 170 3.6
6. Equal Canada 1,922 276 5.9
7. Equal Finland 2,338 336 7.2
THE CHALLENGE
Improvement is Possible:
Gains on NAEP 1992-2009
0
0.5
1
1.5
2
2.5
3
3.5
4
MD FL
DE
MA
LA
SC
NC
AR
NJ
MS HI
KY
VA
GA
OH
CA
TX
CO
PA
NY
AL
US
A
WY
TN
MN
NH RI
ID IN
MO
AZ
CT
NM
UT
MI
ND
WV
NE
WI
OK
ME IA
NY
WY
HI
MA
RI
LA
NH
NJ
MD
WV
ME
NM
AL
ARKY
OH
ND
NE
MN
MS
DE
MO
VA
IA
GA
SC
USA
CT
WI
PA
OK
UT
TNID
TX
IN
CA
MI
NC
AZ
CO
FL
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
$1,000 $2,000 $3,000 $4,000 $5,000 $6,000
Te
st-
sc
ore
ga
ins
be
twe
en
19
92
an
d 2
011
Increase in Expenditures, 1990-2009 (2009 Dollars)*
Increments in Expenditures and Gains in Student Achievement 1990-2008
No Simple AnswersImprovement is possible but not easy