A Better-Educated Population Could Boost US Economy by Trillions

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A new study released by the Washington Center for Equitable Growth discovered that if children’s test scores in math and science in the United States could improve to meet those found in Canada, the US economy could potentially gain $10 trillion by 2050.

The study, The Economic and Fiscal Consequences of Improving U.S. Educational Outcomes, looked at test scores from the 2012 version of the Programme for International Student Assessment exam, which is offered to 15-year-old children around the world.

America ranked 24th out of the 34 countries who participated in the 2012 PISA exam, which is offered to member countries of the Organisation for Economic Co-operation and Development.  South Korea, Japan, Finland, Estonia and Switzerland made up the top five.  Canada came in seventh.

According to the study, the large gap between the scores found in the US and Canada could be caused by an increasing education gap occurring within the US.

“In general, there are large gaps in the educational outcomes among children from families with lower and higher socioeconomic status,” Robert Lynch, Washington College economics professor and visiting fellow at the Washington Center for Equitable Growth, said in the report. “These gaps contribute to subsequent economic inequality, with the relatively poor performance of children from lower socioeconomic backgrounds reducing U.S. economic growth. Thus, closing income or class-based educational gaps would promote faster and more widely shared economic growth.”

Past data from the US Census Bureau used for the study found that income of the bottom 10% of households in the country only increased by around 15% between 1967 and 2013, while the top 10% increased by 59%, each with respect for inflation, writes Andrew Soergel for US News.

It is suggested that greater investments in education could help to close this gap.  According to the authors of the study, a better educated population would present more desirable skills for the workforce.

“The theoretical basis for the relationship between additional schooling and economic growth is straightforward,” Lynch writes in the report. “Educational attainment increases human capital, resulting in the enhanced productivity of a nation’s workforce, increases the rate of technological innovation, and facilitates the diffusion and adoption of new production techniques, all of which help boost economic growth.”

The authors of the study believe that an increase in PISA test scores to meet the average of all 34 countries who take the exam would improve the US economy by an estimated $2.5 billion by 2050.  That number would be 1.7% lower without the improved exam scores.  By 2075, the US economy would be worth $14 trillion.

By matching the average scores received by Canadian children, the US economy could increase by $10 trillion by 2025 and $57.4 trillion by 2075.

Friday
02 6, 2015
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