Developing Human Capital for Economic Growth Emiliana Vegas The World Bank May 14, 2007

Contents Introduction, Motivation and Background Why does student learning matter? Why focus on student learning in Latin America and the Caribbean? Methodological approach How is student learning achieved? Economic, social and political conditions Student-side factors School-side factors Institutional factors Ensuring that all students learn Conclusions, Next Steps

1. Introduction, Motivation and Background Human capital is a necessary condition for economic growth While in the past, much effort focused on expanding access, we now understand that human capital is much more than educational attainment Skills acquisition and the capacity to continue learning throughout the lifecycle are needed to develop individuals and to foster the rise in productivity needed for economic growth

Latin America & the Caribbean has achieved progress in developing human capital Access to basic education is mostly universal Institutional capacity to assess student learning has improved Important innovations and pilot programs Strengthened research capacity in education Stronger partnerships with the private sector and donor community

But important challenges remain for the development of the HC needed for sustained growth Increase access in higher and early childhood education, and reduce gaps across groups Improve completion rates in basic education Raise student learning outcomes Reduce gaps in student learning between Latin America and the Caribbean and OECD, East Asia Improve the relevance of education in a changing world

Raising student learning Is, arguably, the key challenge for the region in the 21st century We have recently completed a study on this topic (Vegas and Petrow, forthcoming), Raising Student Learning in Latin America: The Challenge for the 21st Century

2. Why does student learning matter? Education was established as a human right in 1948 and is viewed as such in Jomtien and Dakar Learning and cognitive skills: Have greater returns in the labor market than years of education Have important effects on economic growth and competitiveness Also affect individuals’ health, fertility, political participation, and risky behaviors Education quality can reduce (or perpetuate) income and social inequalities

3. Why focus on student learning in Latin America and the Caribbean? Educational performance indicators are exceedingly low and exhibit high inequalities within some Latin American countries Inequalities in learning outcomes within countries are often related to socioeconomic differences Ethnic and racial inequalities also exist, especially in ethnically diverse countries Few Latin American students in the region enjoy an education of high quality

PISA 2003 Pisa 2003 Mean Standard Deviation Mean reading S.D. reading 100 200 300 400 500 600 PERU BRAZIL MEXICO CHILE ARGENTINA URUGUAY TURKEY UNITED STATES SPAIN HUNGARY IRELAND AUSTRIA HONG KONG FRANCE NEW ZEALAND AUSTRALIA CANADA JAPAN KOREA FINLAND Mean 20 40 60 80 120 140 Standard Deviation Mean reading S.D. reading Pisa 2003

PISA math scores by student background 100 200 300 400 500 600 1 2 3 4 Socio-economic quartile Average PISA Score in Mathematics 2003 Mexico Brazil Uruguay OECD Source: PISA 2003

Average achievement gap between indigenous and non-indigenous students in rural schools in Guatemala Maybe graph from PREAL with Brazil, Ecuador and Guatemala? Source: McEwan 2006

Percentage of students by reading level in PISA 2003 1% 14,7% 5% 33,4% 17% 31,7% 30% 14,6% 28% 4,6% 20% 1,1% Chile Finland Source: PISA 2003

4. Methodological approach Develop a conceptual approach for analyzing factors and policies that affect student learning outcomes Identify gaps in knowledge and conduct new research to fill those gaps Synthesize findings from new and existing research on factors and policies that affect student learning outcomes in Latin America and the Caribbean and the rest of the world Intended audience: education policy makers, researchers, opinion-makers, and Bank staff involved in education operations

5. How is student learning achieved? Schools Endowments and Behaviors of Teachers Authorities Economic, political, and social context Students Parents Families Education Policy Policy actions Specific programs Systemic reforms The Education System Its organization and institutionality Learning

(a). How do economic, political and social conditions affect student learning? A country’s economic resources can determine potential education investment that may affect achievement levels: Public investment in education in Latin American has increased in recent years but is still below OECD norms There is no obvious relationship between expenditure and standardized test achievement, but low-performing countries tend to be low-spending countries How resources are invested in education matters more than how much Political commitment to student learning outcomes impacts not only funding, but also policies Social inequalities are reflected in learning. Countries with higher income inequality tend to have larger differences in test scores across students

A positive relationship exists between earnings and education inequality

(b) Students’ endowments and behaviors affect their learning ¿What do students bring with them to school? age pre-primary schooling - cognitive development natural ability What kind of support do they receive in the home? values socioeconomic status parents’ education costs income books in the home time for time for homework homework/work Learning

What do students bring with them to school? Previous research has found that most of the variation in learning outcomes is explained by student-side factors A child’s age when entering primary school can affect her trajectory through the education system The preparation a child receives before entering primary school has a strong effect on later learning A child’s access to pre-primary schooling can also greatly help improve the quality of and reduce inequalities in primary and secondary education A child’s health can also affect how well s/he learns

How do parents and families support education? Household factors and the support that children have at home have large effects on student’s success in school Socioeconomic status matters for learning outcomes Parental education and occupation also matter for student learning Books in the home have a consistently strong and positive effect on student performance across international assessments and subjects

Policies affecting children’s endowments and behaviors ¿What do students bring with them to school? age pre-primary schooling - cognitive development natural ability time for homework/work What kind of support do they receive in the home? socioeconomic status costs values parents’ education income books in the home Learning time for homework Early Childhood Education CCTs Education Policy

Early Childhood Development Children’s age and preparedness when entering primary school can affect their school careers and life outcomes (McEwan and Shapiro 2006) Regional and international evidence indicates that ECE may be one of the most effective interventions for improving student learning (Berlinski, Galiani and Gertler 2005; Berlinski Galiani and Manacorda 2006)

CCTs and student learning Reducing the cost of school is one of the simplest ways to increase participation, but little is known about its benefit to student learning Patrinos and Gertler (2006) found that Mexico’s Oportunidades helped reduce failure, repetition and dropout rates

(c.) Schools’ endowments and behaviors also affect student learning How effective are teachers? rotation and turnover knowledge pedagogy time in the profession professional calling motivation What are the characteristics of schools? infrastructure materials and textbooks class size peer group and school climate time students spend in the classroom Learning

How effective are teachers? The characteristics and behaviors of school staff, especially teachers, have a huge impact on student learning Evidence of the impact of teachers’ observable characteristics, such as years of education and experience, on student learning is scant and inconclusive

Policies addressing teachers and teaching

Policies addressing teachers and teaching How teachers are paid, both in absolute levels and relative to comparable workers, can affect teaching quality There is also limited evidence that salary level can have a beneficial impact on student outcomes Salary structure also affects teachers and the work teachers do Recent evidence from Uruguay shows that the country’s system of teacher assignment may be contributing to inequality between schools Teacher education and professional development can also act as an incentive to teachers, although evidence of their impact on student learning is scarce

Teachers’ Salary Structures are Different than those of Non-teachers Experience or education Salary Teachers Other workers Teachers’ salaries are more compressed – they vary little according to teachers’ level of schooling, years of experience, gender, or urban/rural location. They begin higher but have lower returns to schooling and to experience. Teachers’ pay does not vary according to gender or to urban/rural location. Source: Vegas and Umansky (2005)

Pay Incentives are in Place in Few Countries Nearly 90% of teacher pay in Bolivia is based on education and experience In Chile, 40% of teacher salaries are not based on these factors but rather on working in difficult conditions, on having additional administrative responsibilities, on being a master teacher for newer teachers, and performance-based pay incentives.

Some implications for teacher policy Many teachers should have a real possibility of earning additional pay based on performance Incentives should be targeted to classrooms that can benefit most from improved teaching Performance-based pay bonuses should be large enough to merit the extra effort Incentives should reward actual or sustained improvements in teaching and learning Teacher assignment policies should ensure that all schools, and especially schools serving disadvantaged students, have effective teachers Teacher education and professional development need to be improved, systematized and transformed to address new priorities

What school characteristics affect student learning? Research on the relationship between increased investment in school resources and improved student learning indicates a tenuous relationship at best The time students spend in school can impact learning How time is used, in addition to how much, also affects learning (Cerdán-Infantes and Vermeersch 2006) Evidence on the effects of class size and student-teacher ratios is inconclusive Much of the difference in achievement between indigenous and non-indigenous students can be explained by school-level factors (McEwan and Trowbridge 2006)

Intended instructional time by country (2000) Source: OECD

Policies affecting school characteristics that contribute to student learning

Policy implications Students need adequate learning environments Children need adequate time and resources to learn in schools Compensatory programs and extended school days can improve student learning, reduce failure, repetition and dropout rates, and are especially effective for disadvantaged and indigenous students How schools are chosen to take part in compensatory programs is important Multigrade schools need to receive support to meet their special institutional needs, but reforms need to be properly implemented and evaluated

(d.) Institutional factors affect how much students learn How are school systems administered? level of administration management capacity parental/community participation private/public provision school choice Learning

Institutional factors affecting student learning Cross-country evidence shows that differences in the level of decision-making can impact student learning Decentralization can also lead to higher inequality within countries (e.g. Argentina and Brazil) Three recent studies from Central America show some positive evidence of the impact of school-based management on student learning Recent evidence from Mexico shows that parental participation in education management can be both effective and cost efficient (Gertler, Patrinos and Rubio-Codina 2006) The level of curricular autonomy may have an impact on student learning (Woessmann 2003) Mixed evidence of the impact of school choice on student learning in Latin America and the Caribbean (e.g. Chile and Colombia) School choice can have effects on student enrollments and learning outcomes, but the design and implementation of these programs can have important consequences

Policies affecting system organization and administration The level of decision making matters Providing additional support to schools with little institutional capacity can help offset disparities in a decentralized system, as can finance equalization reform Devolving some responsibilities to schools, parents, and communities can contribute to student learning, but the design of school-based management programs affects their impact The state plays an important role to ensure quality in a school choice system

6. How can Latin American countries ensure that all students learn? Teachers School Directors Schools Local Government State/Provincial Regional National Performance Standards   Performance Evaluation Performance Reporting Impact evaluation of policies and programs Requirements to operate Ensuring adequate and equitable resources Autonomy, support, and intervention Accountability and consequences

Differentiated Instruction Four Instructional Visions along a School Autonomy – Central Government Control Continuum Market System Quality Contracts Differentiated Instruction Managed Instruction Autonomy Control Chile New Zealand UK US (MA, TX) Finland Spain N. Korea

The role of Government differs in each vision Quality contracts Central Government: Sets operating requirements Sets performance assessment and reporting rules Provides information to market Finances Authorizes and revokes licenses Schools: Define instructional model and conduct assessments Market: Determines the distribution of schools Differentiated instruction Schools: Define instructional model Central Government: Sets operating requirements Sets performance assessment and reporting rules Provides information to market Finances Authorizes and revokes licenses Conducts performance evaluation/assessments Intervenes differentially in schools to ensure quality Managed instruction Central Government: Sets operating requirements Defines one instructional model for all schools Sets performance assessment and reporting rules Provides information to participants to ensure quality Finances Authorizes and revokes licenses Conducts performance evaluation/assessments Intervenes differentially in schools to ensure quality Inspects schools and intervenes to ensure adhesion to the instructional model Limited State Central Government: Sets operating requirements Provides informacion to market Finances Schools: Define performance standards, instructional model, and assessments Market: Determines the quantity, quality and distribution of schools

Differentiated Instruction The decision of which instructional vision should take into account historical context Central Government Schools Model Axis Control Axis Uniform Model Diverse Models Limited State Quality Contracts Differentiated Instruction Managed Instruction

7. Conclusions, Next Steps To raise student learning, there is no one “magic bullet” A combination of policies are needed to influence students, schools, and institutions – and all participants Importance of using empirical evidence to inform education policy making Designing an evaluation strategy at the outset of an intervention improves the quality/reliability of impact evaluation findings

Developing Human Capital for Economic Growth Emiliana Vegas The World Bank evegas@worldbank.org