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Some Simple Analytics of School Quality

Dec 2003
Stanford King Center on Global Development Working Paper
198
By  Eric A. Hanushek

Most empirical analyses of human capital have concentrated solely on the quantity of schooling attained by individuals, ignoring quality differences. This focus contrasts sharply with policy considerations that almost exclusively consider school quality issues. This paper presents basic evidence about the impact of school quality on individual earnings and on economic growth. The calculations emphasize how benefits relate to both the magnitude and speed of quality improvements. It then considers alternative school reform policies focused on improvements in teacher quality, identifying how much change is required. Finally, teacher bonus policies are put into the context of potential benefits.