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School Achievement Can Drive Economic Growth

6 minute Read by Alexander “Sandy” Kress
Education debate focuses on the details of policy, but we should not lose track of the big picture -- namely, that education is a main driver of economic prosperity.

Policy wonks tend to get caught up in the details of education debates. Do we have the best standards and curriculum? Do we have good teachers? Do we have sufficient funding? Are there the right levels of accountability? These are important questions for which there must be good answers.

But what we tend to miss, and miss badly, are the questions that matter most to the public, the taxpayers, and the parents. Are we preparing young people well for additional education, job training and good careers? Does the education system contribute to a strong economy? To whatever extent it does, could it do better, and how?

Are we preparing young people well for additional education, job training and good careers? Does the education system contribute to a strong economy? To whatever extent it does, could it do better, and how?

The good news is research shows improvement in a K-12 education can have a dramatic effect in boosting the economy. Yet further improvements could add even more to growth and good jobs. And taking constructive action could strengthen the wellbeing of communities and their children in other important ways.

How much growth could K-12 achievement gains generate in the economy? And what gains would be necessary to achieve the growth? 

Some revealing, even stunning, answers are found in the working paper, “Economic Gains for U.S. States from Educational Reform.” This paper was authored by Eric A. Hanushek, Jens Ruhose, and Ludger Woessemann under the banner of the National Bureau of Economic Research. (A summary can be found at How to Make the U.S. $76 Trillion Richer.) 

Essentially, the paper shows that educational achievement strongly predicts economic growth. This is so, the authors show, because there is a strong relationship between growth in the states and quality of the workforce. 

The paper consists mostly of analyses of how various gains in the schools can improve the workforce and, as a result, generate economic growth. The main finding is encouraging: School reforms that would lift each state to the achievement level of the top-performing state would amount to an aggregate $76 trillion for the United States. 

The main finding is encouraging: School reforms that would lift each state to the achievement level of the top-performing state would amount to an aggregate $76 trillion for the United States. 

Even lesser levels of improvement would generate huge long- term growth. We could reap economic benefits from achieving even a slight gain on, say, eighth grade math performance on the National Assessment of Educational Progress (NAEP).

In fact, future increases in state GDP would have a present value of 2.6 times current GDP. For California, this would be a present value of more than $6 trillion; for New York, the number would be $3.5 trillion.

If increasing eighth grade math proficiency produces such a huge, positive impact on economic growth, might we get further improvement if we move more graduating students to true readiness for college and career success? Among others, the Lumina Foundation says that doing so would matter a lot. The foundation produced a paper to show what the impact of progress would be in Arizona alone. It found that "social and fiscal gains associated with simply increasing postsecondary attainment to meet national norms has the potential to, at a minimum, double our annual economic growth rate." 

So, we can expand economic growth even more by building on K-12 success after high school. Here’s one of many solid ways to do so: Enterprising mayors could work with their economic development teams to do an inventory of the good-paying job openings that exist and new jobs that will be sought over the next decade.

A skills/knowledge analysis could be done on these jobs. Companies that have had great success in creating certificates of readiness for such jobs and enterprising institutions of higher education could be recruited to develop plans to enroll all interested and ready high school graduates in post-secondary programs to prepare them for the identified jobs.

This endeavor could become a central enterprise for communities. Parents could be challenged to do their part. Charities, youth and family serving agencies, and religious and neighborhood groups could be encouraged to join in.

Though it should be measured and evaluated, this could be a big winner for local economies. But the biggest winner might be the citizens themselves. More of their high school graduates would be ready for college, receive the training and education they need to get good jobs, and bridge some of the divides that separate their communities.

Though it should be measured and evaluated, this could be a big winner for local economies. But the biggest winner might be the citizens themselves.

K-12 education has an impact both on the economy and the community. If we did K-12 better, its impact would be substantially greater. If people were awakened to these simple facts, they might become more involved in the tough decisions and the hard work of improving schools, and actually make it happen.


Author

Alexander “Sandy” Kress
Alexander “Sandy” Kress

As a fellow at the Bush Institute, Mr. Kress advises on Middle School Matters and contributes to the Advancing Accountability program.

In addition to his duties for the Bush Institute, Mr. Kress is a partner at Akin Gump Strauss Hauer & Feld LLP, where his practice focuses on public law and policy at the state and national levels.

Previously, Mr. Kress served as senior advisor to President George W. Bush on education and served as president of the board of trustees of the Dallas Public Schools.

Mr. Kress earned his B.A. degree from the University of California at Berkeley, and earned his J.D. degree from the University of Texas.

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