With the recession still fresh in our minds and questions about whether college is worth the cost, some may be wondering just how much schooling matters. If they go searching for answers, they may even find confusing claims like this: “at the global level, no relationship has been found between a more educated population and more rapid economic development.”

Finally, analyses by Eric Hanushek and Ludger Woessmann provide a compelling answer: seat time doesn’t matter, but knowledge does. They explain years of work in a new book, The Knowledge Capital of Nations: Education and the Economics of Growth. I’ll confess: I haven’t read it (so far, I’ve read a couple of their free papers, which Hanushek graciously makes easy to find). But I will read it—I’ve been hoping for this book since finding an early, and especially reader-friendly, analysis in the spring 2008 issue of Education Next.

For now, here’s the central claim, drawn from the book’s introduction:

The conclusion of the analysis we develop in this book is that Adam Smith was right: human capital, as we now call it, is extraordinarily important for a nation’s economic development. The significance of education, however, has been obscured by measurement issues. Time in school is a very bad measure of what is learned and of what skills are developed, particularly in an international context. With better measures, the fundamental importance of human capital becomes clear.

Although many factors enter into a nation’s economic growth, we conclude that the cognitive skills of the population are the most essential to long-run prosperity. These skills, which in the aggregate we call the “knowledge capital” of a nation, explain in large part the differences in long-run growth we have seen around the world in the past half century.

For those who have not yet been persuaded by the democracy– and cognition-based arguments for rigorous, knowledge-rich elementary and secondary education, perhaps this economic argument will win the day. Seat time is a waste of precious resources; building knowledge is a terrific investment.


Shutterstock Image
Knowledge and the economy grow together (image courtesy of Shutterstock).

3 comments on ““Knowledge Capital” Determines Economic Growth”

  1. 1
    Ponderosa on July 14, 2015

    Notice how Hanushek blurs the distinction between “skills” and “knowledge” in the quote. Unless he clarifies this elsewhere, many might read his piece as justification for doubling down on skills instruction rather than pivoting to actual knowledge instruction.

    Hanushek’s other work has served as ammo for the current witch-hunt for “bad teachers” via value added measurement. This scientifically-dubious enterprise has unfairly tarnished the reputations of many good teachers, and surely increased the likelihood that teachers will narrow their curriculum to ELA and math (the ones VAM is usually based on), thus limiting kids’ exposure to broad knowledge. Thus, ironically, Hanushek himself may be partly responsible for American kids’ knowledge deficiency. Perhaps he will start to call for a broader array of tests to measure “value added” so as to incentivize teachers to teach broad knowledge instead of just tricks for gaming the ELA and math tests. Or perhaps he’ll call off the witch hunt for “bad” teachers and admit that building a solid curriculum would be a far more profitable use our our limitied energies than devising complicated schemes for weeding out some “bad” teachers (as far as I know, no other high-performing nation uses VAM, by the way).

  2. 2
    Lisa Hansel on July 14, 2015

    I agree that Hanushek’s (and others’) work on value added has been counterproductive. For this analysis, he and Woessmann draw on international assessments that do measure content knowledge. In the papers at least, there seems to be reasonable understanding that knowledge and skills develop together.

  3. 3
    Robin on July 14, 2015

    What international assessments measure content knowledge, Lisa?

    I have the OECD’s own papers on what PISA is measuring. DeSeCo-Definition and Selection of Competencies and what PISA is really measuring is covered in Chapter 4 of my book Credentialed to Destroy.

    I also have Thorsten Husen’s book and other materials from IEA on what they are actually measuring. Again it’s not content knowledge unless one counts Cross-Cutting Themes and Core Disciplinary Concepts and other broad concepts as the Next Generation SCience Standards do as content knowledge.

    The book appears to me to be more propaganda that is pushing anything but a factually rich definition of knowledge. The kind that withstood the test of time and gave rise to our entire consciousness of ourselves as individuals. That’s anathema to the Competency global agenda.

    I wish it wasn’t, which is why I keep writing and pushing away the rhetoric.

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