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To improve our economy, first improve our education system. In a series of papers published by OECD, Eric Hanushek and Ludger Woessmann (2010, 2015) provide compelling data to this effect, data with which the Nigerian finance ministry should become familiar, if they are not already. The studies conclude with a strong prediction; over a 20-year period, a country’s economic growth rate will increase by 5% for every 0.25 standard deviation improvement on the Programme for International Student Assessment (PISA). If these predictions hold, there are immense payoffs for improved education.
PISA, administered to 15-year-old students, assesses the Mathematics, Reading, and Science skills most aligned to the OECD member country’s curriculum. The PISA score represents the culmination of lessons learned across many school years. While it is mostly straightforward to compare PISA scores across countries and across time, it is far more difficult to assess whether a school system’s early childhood and primary reform initiatives will result in the deeper student understandings that translate to higher PISA scores.
A recent study led by Nobel-prize winning economist Professor Michael Kremer demonstrated how an education program in Kenya produced accelerated learning for its pre-primary students and primary students. In these two years, pre-primary students learned what would have taken their peers an additional 1.35 years to learn. Bridge Kenya Primary students learned 0.89 years more than their peers. This randomized controlled study is as rigorous as any field trial ever conducted with similar size and scope. In considering the standard deviation gains alongside the Hanushek PISA research, arguably the learning gains demonstrated in the Kremer et.al study could push Kenya up education league tables to match countries with incomes three or four times greater per person. The good news for Nigeria is that this holistic methodology studied by Michael Kremer and his co-authors has been exported from Kenya and largely underpins Nigeria’s state wide Lagos (EKOEXCEL), Edo (EdoBEST) and Kwara (KwaraLEARN) public transformation programs. Nigeria’s Governors have implemented the methodology to transform learning outcomes across their public school systems including early childhood, primary and junior secondary schools.
The evidence clearly shows successful education reforms lead to better economies, better economic opportunities for individuals are likely the first, and more predictable, steps along the path to improving the economy for a nation.
Again, we turn to Hanushek, Woessmann, and colleagues to estimate the economic benefits to individuals that accrue when schools improve. Using data from the Programme for the International Assessment of Adult Competencies (PIAAC) – measuring the key cognitive and workplace skills needed for individuals to participate in society and for economies to prosper – Hanushek et al.[1] estimate large returns to improved cognitive skills, approximately 18% higher hourly wages per standard deviation improvement.
While the Kremer study analyzed programme-level learning effects, they also calculated a higher-order skills index. The study found that attending a school supported by the studied methodology had roughly a 0.90 effect on higher order thinking skills such as critical thinking and problem solving at both the pre-primary and the primary levels.
Even though the data from PIAAC is a test of adult skills, it is reasonable to assume that the improved cognitive skills – and corresponding learning gains – in primary school would be maintained, if not improved, as a student continues in their school career.
Two years of improved schooling leads to at least two years of additional income.
Therefore, if we use the most conservative of the Kremer et al. impact estimates, an intent to treat estimate at 0.29 standard deviations, this suggests the value of improved schooling for the average primary student is slightly over $400 USD per year in additional earnings. This assumes average wages in Kenya (2019, pre-pandemic) at roughly $7,800 USD annually (Kenya National Bureau of Statistics). Over a working lifetime, roughly 40 years, the additional wages (greater than $16,000 USD) equal more than two years of salary. If instead of the conservative effects, we calculate potential additional wage gains using the larger of the Kremer et al. impact estimates at 0.81SD then the expected wage increase would be nearly three times larger, exceeding $1,100 or roughly 15% additional wages every year, adding about 6 additional years of salary over a 40 year career. These individual economic benefits from just
two years of improved schooling are enormous, even using the most conservative impact estimates from the Kremer study.
These numbers focus on Kenya since that is where the study was located. However, individual economic returns to improved schooling is not a Kenyan or even African phenomenon, but should be applicable to any economy where increased skills lead to better wages. The Hanushek et al. (2015) study showed strong and consistent wage increases for individuals who received improved schooling in Australia and across a diverse set of European and North American countries.
Even higher returns could be expected from earlier and more exposure to improved schooling. The Kremer et al. paper found the largest effects on learning achievement for the youngest students, more than one-third larger among pre-primary students than primary students. This strength of these results foreshadows what could be possible for students who begin pre-primary in highly effective schools and then attend highly effective schools for the remainder of their primary and secondary years.
Even two years of exposure to effective schooling at a young age can have lasting effects. Heckman et al.’s (2010) study of the Perry Preschool program[1], targeting low-income Black youth, found “each dollar invested at age 4 yields a return of 60–300 dollars by age 65.” If Bridge Kenya’s pre-school tuition at USD $64 per year yields similar returns, the nearly $200 investment in three years of pre-school should return to between $12,000 and $60,000 over the course of a career. Moreover, these effects can be intergenerational. This is the main finding of Heckman and Karapakula’s (2019) study of long-term effects of quality pre-school enrollment[2]. The positive effects of high-quality early schooling persisted and were even extended to the next generation. The children of parents, who as students received high-quality pre-schooling, were less likely to have adverse school and life experiences (such as suspensions and participation in crime) and more likely to have higher levels of education and employment.
With time and widespread adoption of schooling methods that lead to better learning outcomes, the benefits shift from individual recipients to states and nations. In the long run, this improved schooling system would not only transform individuals’ economic lives, but the entire country’s economy. This is the conclusion from Hanushek and Woessmann decades of research. In addition, as a country’s
economy strengthens, those with the benefit of having attended effective schools earliest will be the most able to reap the rewards of a fast-growing economy[1].
The Kremer et al. study does more than evidence a system delivering improved gains for pre-primary and primary school students. It produces findings which when analyzed alongside Hanuskek and Woessmann indicates a type of schooling system that could deliver national economic prosperity. It is in the interest of both government ministers, Education and Finance, to improve schooling. It will not only enhance the opportunities for their nation’s youth, but also enhance the economy’s workforce.
Education scholars estimate education reforms resulting in a 25-point gain on Programme for International Student Assessment (PISA) (0.25 standard deviation) will increase the GDP growth rate by 0.5% annually in middle-income countries. Lagos, Edo and Kwara can expect the same outcome. Hopefully the whole of Nigeria can too, if this studied methodology is implemented at Federal level.
