Student Achievement and Every State's Economic Future

May 04, 2016

By Eric A. Hanushek

Schooling policy in the U.S. is in flux. And the future of America’s state economies is at stake.

The No Child Left Behind Act that drove much of the overall policy discussion became increasingly dysfunctional and was belatedly replaced by the Every Student Succeeds Act. A key element of this new act is returning the locus of educational policy to individual states. That move is not without risk.

Will states move toward improving schools without the continued pressure of the federal government? Will they do better or worse when given more latitude?

History shows that vast economic gains are likely to accrue to any state that can improve the quality of its schools. But history also shows that state politics are affected both by myopia and by intense conflicts when it comes to schools. Moreover, policymakers may systematically underestimate the economic benefits of improved schools in their states.

Consider first the economic impact of school improvement. We know that states differ dramatically in income: the GDP per capita in Delaware is twice that in Mississippi. What the future will be depends on growth rates across the states, and historically these, too, have differed significantly. North Dakota’s growth over the past four decades of 3 percent per year is more than double the 1.2 percent of Nevada.