EDUCATIONAL OUTCOMES IN OECD COUNTRIES
success. Second, by emphasizing total outcomes of education, it incorporates skills from
any source - families, schools, and ability. Third, by allowing for differences in
performance among students with differing quality of schooling (but possibly the same
quantity of schooling), it opens the investigation of the importance of different policies
designed to affect the quality aspects of schools.5 Fourth, it is practical because of the
extensive development of consistent and reliable cross-country assessments.
2.2. Data
Our analysis relies on the measures of cognitive skills developed in Hanushek and
Woessmann (2009). These combine data from international tests given over the past 45
years in order to develop a single comparable measure of skills for each country that can
be used to index skills of people in the labor force.6
Between 1964 and 2003, twelve different international tests of math, science, or
reading were administered to a voluntarily participating group of countries (see
Hanushek and Woessmann (2010) for a review). These include 36 different possible
scores for year-age-test combinations (e.g., science for students of grade 8 in 1972 as
part of the First International Science Study or math of 15-year-olds in 2000 as a part of
the Programme on International Student Assessment). The assessments are designed to
identify a common set of expected skills, which were then tested in the local language.
It is easier to do this in math and science than in reading, and a majority of the
international testing has focused on math and science. Each test is newly constructed,
until recently with no effort to link to any of the other tests.
The methodology used to construct consistent measures at the national level across
countries relies on empirical calibration of the different tests. By transforming the
means and variances of the original country scores (partly based on external longitudinal
test score information available for the United States), each is placed into a common
distribution of outcomes (see Hanushek and Woessmann (2009) for details).7 Each age
group and subject is normalized to the PISA standard of mean 500 and individual
5 Some recent work has introduced the possibility that noncognitive skills also enter into individual economic outcomes (see
importantly Bowles, Gintis, and Osborne (2001), Heckman, Stixrud, and Urzua (2006), and Cunha, Heckman, Lochner, and
Masterov (2006)). Hanushek and Woessmann (2008) integrate noncognitive skills into the interpretation of general models
such as above and show how this affects the interpretation of the parameter on school attainment and other estimates. While
there are no agreed-upon measures of noncognitive skills, at the aggregate level they might well be incorporated in “cultural
differences.” The importance of such cultural differences in empirical models of growth is considered in Hanushek and
Woessmann (2009).
6 With few exceptions direct measures of achievement of people in the labor force are unavailable, and analysis instead must
rely upon skills measured during the schooling period. The one exception with measures of the cognitive skills of people in
the labor force is the 1994-98 International Adult Literacy Survey (IALS), which tested representative samples of people aged
16-65 years. Coulombe, Tremblay, and Marchand (2004) have used these data to construct synthetic cohorts in order to
estimate an augmented neoclassical growth model across 14 countries. As discussed below, this construction causes no
problems if the relative performance of people in different countries has remained constant, but it could introduce problems if
that is not true.
7 Transforming scores based on just the mean and variance is appropriate if the underlying score distribution is normal but
potentially introduces errors for other underlying distributions. A look at the underlying data reveals that the distribution of
PISA scores within the OECD is normal, even if the distributions in individual countries may not be. In the analysis of
minimal and top skills below, the calculations employ the empirical micro distributions for each of the countries and do not
assume normality.