Higher Test Scores or More Schooling? Another Look at the Causes of Economic Growth

Abstract

I use a dynamic augmented Solow model to estimate the effect of international test scores and investment in schooling and tutoring on economic growth rates in 55 countries during 1985–2005. Either test scores or investment in schooling and tutoring can explain growth rates in the full data set or in countries that had less than 8 years of schooling in 1985. In countries with more schooling in 1985, investment in schooling has a small effect and test scores have no effect on growth rates. In the 24 countries with scores above 470, higher scores have no effect on growth rates.