I frequently have my undergrad and grad students read Bill Easterly’s excellent book, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. They are often a bit depressed after reading the chapters on growth, noting how little we seem to know about growth in the real world. It is the education chapter, however, which really gets to them. In it, Easterly points out what has been known for ages but is rarely mentioned in print (see Lant Pritchett’s “Where has all the education gone?” for a refreshing exception), namely, that education is not positively and significantly related to economic growth for most samples. Sometimes you can find a weakly positive t-stat in a sample of OECD countries, but you are lucky if you merely find zero correlation (instead of a negative and significant) in the developing world.
I reassure students by telling them that one of the problems with these regressions is that we are trying to measure human capital without any ability to adjust for quality across countries. 8 years of education in Switzerland may not be equivalent to 8 years of education in Guinea-Bissau (see this new NBER working paper for a truly depressing look at this country’s educational woes).
We have some measures of quality, but not usually enough to use in a panel of countries. A new working paper called “A New International Database on Education Quality: 1965-2010” by Nadir Altinok, Claude Diebolt, and Jean-Luc Demeulemeester seeks to fill this gap by creating a new database of educational quality for 103 countries from 1965 to 2010. Their approach is innovative in that it “includes regional student achievement tests and intertemporal comparable indicators.”
Check out the Figure below (it’s small so click on it for a larger view) for an idea of how primary school quality differs across countries. They find that Asian countries have the highest average primary school quality (although I do question how Kazakhstan can be scoring so highly), there is a lot of variance in the Arab states, and that Sub-Saharan African countries as a whole rank relatively low (although again there is a fair amount of variance). From this figure at least, it looks like Mauritania has its work cut out for it.