How Much Do Educational Outcomes Matter In OECD Countries?
Existing growth research provides little explanation for the very large differences in long-run growth performance across OECD countries. The authors show that cognitive skills can account for growth differences within the OECD, whereas a range of economic institutions and quantitative measures of tertiary education cannot. Under the growth model estimates and plausible projection parameters, school improvements falling within currently observed performance levels yield very large gains. The present value of OECD aggregate gains through 2090 could be as much as $275 trillion, or 13.8 percent of the discounted value of future GDP.