Conclusions and Controversies about the Effectiveness of School Resources

Author/s
Eric A. Hanushek
Published Date
March 1998
Publication
FRBNY Economic Policy Review
Details
4(1)
Pages
pp. 11-28

I begin with some overall observations and conclusions. The subsequent discussion will provide some of the relevant evidence and references to support my conclusions. As a starting point, educational investments are very important to the U.S. economy, a fact that suggests there is much value in an aggressive human capital investment strategy. The U.S. economy has been built up largely by using a skilled labor force and has capitalized on the presence of skills, making human capital investments very important to the success of the overall economy. Moreover, many authors show that the labor market value of the increased skills, as measured by schooling level, has increased dramatically in recent years. I think this valuation demonstrates that the economy continues to need an increasingly skilled labor force. Recent work has also suggested that education is very important in boosting the growth rates of the nation as a whole and that a very important relationship exists between human capital and growth rates. Economists have recently spent considerable time and effort trying to understand why some countries grow faster than others. The majority opinion is that a nation’s stock of human capital is an important component of differential growth rates. In addition, we have thought of education as a primary ingredient in providing equal opportunity to all members of society as a way of cutting down or breaking intergenerational correlations of income. Taken together, these benefits provide important and relatively uncontroversial reasons for us to continue our attention to education.