There is limited existing evidence justifying the economic case for state education policy. Using newly-developed measures of the human capital of each state that allow for internal migration and foreign immigration, we estimate growth regressions that incorporate worker skills. We find that educational achievement strongly predicts economic growth across U.S. states over the past four decades. Based on projections from our growth models, we show the enormous scope for state economic development through improving the quality of schools. While we consider the impact for each state of a range of educational reforms, an improvement that moves each state to the best-performing state would in the aggregate yield a present value of long-run economic gains of over four times current GDP.

Available here. If you want a copy, ask below, entering your real email in the email box. Largest NAEP gains between 1992 and 2011 were in Maryland and Florida; the lowest were in Maine and Iowa. Test scores (adjusted for migrants, years of schooling, and capital per worker) were somewhat predictive of GDP per capita growth between 1970 and 2010. Texas, notably, is not an outlier, while Michigan, Virginia, Louisiana and Connecticut are. Various scenarios are introduced for how glorious a society of smart people would be.

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