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Basic skills in literacy and numeracy are
essential for success in the labor market
Even in OECD countries, where an increasing
proportion of the workforce has a university degree, the value of basic
skills in literacy and numeracy remains high. Indeed, in some countries the
return for such skills, in the form of higher wages, is sufficiently large
to suggest that they are in high demand and that there is a relative
scarcity. Policymakers need robust evidence in order to devise interventions
that genuinely improve basic skills, not just of new school leavers entering
the market, but also of the existing workforce. This would lead to
significant improvements in the population that achieves a minimum level of
literacy and numeracy.
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Teacher effectiveness has a dramatic effect on
student outcomes—how can it be increased?
Teacher effectiveness is the most important
component of the education process within schools for pupil attainment. One
estimate suggests that, in the US, replacing the least effective 8% of
teachers with average teachers has a present value of $100 trillion.
Researchers have a reasonable understanding of how to measure teacher
effectiveness; but the next step, understanding the best ways to raise it,
is where the research frontier now lies. Two areas in particular appear to
hold the greatest promise: reforming hiring practices and contracts, and
reforming teacher training and development.
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Public education tends to crowd out parents’
time and money, but careful policy design may mitigate this
Many countries around the world are making
substantial and increasing public investments in children by providing
resources for schooling from early years through to adolescence. Recent
research has looked at how parents respond to children’s schooling
opportunities, highlighting that public inputs can alternatively encourage
or crowd out parental inputs. Most evidence finds that parents reduce their
own efforts as schooling improves, dampening the efficiency of government
expenditure. Policymakers may thus want to focus government provision on
schooling inputs that are less easily substituted.
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Cognitive skills are more relevant in explaining earnings,
socio-emotional skills in determining labor supply and schooling
Common proxies, such as years of education, have been shown to
be ineffective at capturing cross-country differences in skills acquisition, as well as the
role they play in the labor market. A large body of research shows that direct measures of
skills, in particular cognitive and socio-emotional ones, provide more adequate estimations of
individuals’ differences in potential productive capacity than the quantity of education they
receive. Evidence shows that cognitive skills in particular are quite relevant to explain
wages, while socio-emotional skills are more associated with labor force and education
participation decisions.
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Student sorting into classes complicates policies that utilize peer effects to optimize educational outcomes
The role of social interactions in modifying individual behavior is central to many fields of social science. In education, one essential aspect is that “good” peers can potentially improve students’ academic achievement, career choices, or labor market outcomes later in life. Indeed, evidence suggests that good peers are important in raising student attainment, both in compulsory schooling and university. Interventions that change the ability group composition in ways that improve student educational outcomes without exacerbating inequality therefore offer a promising basis for education policies.
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Despite increasingly generous parental leave schemes their
advantages over subsidized childcare remain unclear
Most OECD countries spend substantially more on maternity leave
schemes than on early childcare. However, given high tax burdens and rapidly aging
populations, female labor force participation is critically needed. Moreover, it is important
to know whether the main beneficiaries, the children themselves, reap more benefits from one
or the other in the long term. The first cohorts exposed to the introduction or extension of
maternity/paternity leave schemes and subsidized childcare programs have now completed
education and entered the labor market, allowing an investigation of these programs’ long-term
economic effects.
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External school leaving exams raise student
achievement and improve how grades are understood in the labor market
Reaching the policy goal of improving student
achievement by adding resources to the school system has often proven
elusive. By contrast, ample evidence indicates that central exit exams
constitute an important feature of a school system’s institutional
framework, which can hold students, teachers, schools, and administrators
accountable for student outcomes. While critics point to issues such as
teaching test-only skills, which may leave students ill-prepared for the
real world, the evidence does not bear this out. Overall, central exams are
related to better student achievement, favorable labor market outcomes, and
higher economic growth.
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Relative costs and family characteristics
determine the effectiveness of different forms of childcare
Increasing population age and low fertility
rates, which characterize most modern societies, compromise the balance
between people who can participate in the labor market and people who need
care. This is a demographic and social issue that is likely to grow in
importance for future generations. It is therefore crucial to understand
what factors can positively influence fertility decisions. Policies related
to the availability and costs of different kinds of childcare (e.g. formal
care, grandparents, childminders) should be considered and promoted after an
evaluation of their effects on the probability of women having children.
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While mostly missing their primary objectives, adult
literacy programs can still improve key socio-economic outcomes
In addition to the traditional education system
targeting children and youth, one potentially important vehicle to improve
literacy and numeracy skills is adult literacy programs (ALPs). In many
developing countries, however, these programs do not seem to achieve these
hoped for, ex ante, objectives and have therefore received less attention,
if not been largely abandoned, in recent years. But, evidence shows that
ALPs do affect other important socio-economic outcomes such as health,
household income, and labor market participation by enhancing participants’
health knowledge and income-generating activities.
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Secondary and higher education are windows of
opportunity for boosting students’ life skills
Life skills, sometimes referred to as
noncognitive skills or personality traits (e.g. conscientiousness or locus
of control—the belief to influence events and their outcomes), affect labor
market productivity. Policymakers and academics are thus exploring whether
such skills should be taught at the high school or college level. A small
portfolio of recent studies shows encouraging evidence that education could
strengthen life skills in adolescence. However, as no uniform approach
exists on which life skills are most important and how to best measure them,
many important questions must be answered before life skill development can
become an integral part of school curricula.
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