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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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Standardized testing can create incentives to
manipulate test results and generate misleading indicators for public
policy
Standardized testing has become the accepted
means of measuring a school’s quality. However, the associated rise in
test-based accountability creates incentives for schools, teachers, and
students to manipulate test scores. Illicit behavior may also occur in
institutional settings where performance standards are weak. These issues
are important because inaccurate measurement of student achievement leads to
poor or ineffective policy conclusions. The consequences of mismeasured
student achievement for policy conclusions have been documented in many
institutional contexts in Europe and North America, and guidelines can be
devised for the future.
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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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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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The success of universal preschool education depends crucially
on the policy parameters and specific country context
Since the 1970s, many countries have established free or highly
subsidized education for all preschool children in the hope of improving children’s learning
and socio-economic life chances and encouraging mothers to join the labor force. Evaluations
reveal that these policies can increase maternal employment in the short term and may continue
to do so even after the child is no longer in preschool by enabling mothers to gain more job
skills and increase their attachment to the labor force. However, their effectiveness depends
on the policy design, the country context, and the characteristics of mothers of
preschoolers.
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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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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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Generous parental leave and affordable,
high-quality childcare can foster children’s abilities
The economic and psychological literatures have
demonstrated that early investments (private and public) in children can
significantly increase cognitive outcomes in the short and long term and
contribute to success later in life. One of the most important of these
inputs is maternal time. Women’s participation in the labor market has risen
rapidly in most countries, implying that mothers spend less time with their
children and that families rely more on external sources of childcare. This
trend has raised concerns, and an intense debate in several countries has
focused on the effectiveness of childcare policies.
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It depends: older children perform better on
standardized tests, but evidence of older school starting ages on long-term
outcomes is mixed
There is a widely held belief that older
students, by virtue of being more mature and readier to learn at school
entry, may have better academic, employment, and earnings outcomes compared
to their younger counterparts. There are understated, albeit important,
costs to starting school later, however. Compulsory school-attendance laws
may allow these same older pupils to drop out of high school earlier, which
could adversely impact their employment; entering the workforce later also
has implications for lifetime earnings and remittances to governments.
Overall, research suggests that school-age entry policies can improve
student achievement in the short term, but the long-term impacts are
currently not well-understood.
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