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Economic importance of good schools

"There is," according to Eric A Hanushek in a recent NBER Working Paper, "mounting evidence that quality [of schooling]-generally measured by test scores-is positively related to individual earnings, productivity, and economic growth." Early studies of education and wages focused on the return to

an undifferentiated year of schooling and suggested little effect of differences in cognitive ability if quantity of education was held constant. More recent studies surveyed by Hanushek indicate that higher quality of education, as measured by standard tests, is linked to individual productivity and earnings. Also, higher individual achievement scores are correlated with the probability of continued school attendance- a sort of quality-leads-toquantity effect.

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