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Higher education: returns are high but we need to fund it better

Harry A. Patrinos's picture
University students at a laboratory.

Photo: Nafise Motlaq / World Bank

This week I was invited to speak at The Economist’s Higher Education Forum in New York to share my thoughts on how higher education can be expanded. I believe that we need a fair and sustainable cost-recovery model at the university level using future earnings to finance current education.

Over the past two decades, there has been a tremendous increase in the number of university students and graduates worldwide, which should have led to decrease in the rate of return to investment to higher education – if supply outpaced demand, of course.  While there has been some decrease in overall rates of return, investment in education is still a highly profitable investment.  Global demand for high levels skills such as working with new information and problem-solving has kept the returns to schooling high in even the poorest countries of the world. In fact, the returns to higher education are higher in lower-income countries – except in the Middle East and North Africa due to rigid labor market regulations.

Can providing information on school performance lead to improvement?

Harry A. Patrinos's picture

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In high-income countries, learning outcomes have improved as a result of an intervention that increases transparency and accountability through the use of test scores.  In a previous blog, I mentioned examples of ‘high-stakes testing’ accountability systems, such as No Child Left Behind.  A high-stakes test has important consequences for the test taker, school, or school authorities. It carried important benefits if the test is passed, such as a diploma, extra resources to the school, or a positive citation. Some of these interventions also follow the “naming and shaming” of school leaders, which is done in England.

There is also evidence that suggests that even just providing information on test scores will lead to improvement.  This is the case in school choice systems such as in the Netherlands.

Can Disseminating Information Lead to Better Learning Outcomes?

Deon Filmer's picture

When my wife and I were looking for where to live in Washington DC, an important part of the decision was the quality of the local public school that our children would (eventually) attend.  But how to judge quality?  Talking to lots of people was the first step.  Taking schools tours was another.  But researching test scores was a key factor.  We wanted a school with a good learning environment, a sense that parents had a positive feeling about the place—but also wanted to know that the school had a track record of good learning outcomes.  Thankfully, the performance of public schools in Washington DC is accessible online and can be compared across schools.  This information was an important input into our decision.  And it remains an important way in which we monitor school performance.  We pay close attention to our own children’s academic development, talk to their teachers regularly, and try to be attentive to the many subtle indicators of the quality of education that they are receiving.  But the annually released test scores provide an externally validated stock-taking of one aspect of that quality.

Can Teachers Unions Change? Can The World Bank Change?

Emiliana Vegas's picture

In December 2006, I travelled to Santiago, Chile, with a small team to conduct consultations with education stakeholders on a study we were carrying out at the request of the Chilean Government to help them identify lessons from high-performing countries on how to strengthen the institutional arrangements for education quality assurance. I was the Task Team Leader (at the Bank this is the title of the Project Manager) and also heading the trip. I was joined by an external expert consultant, Joseph Olchefske who is a former Superintendent of Seattle Public Schools and was during this period at the American Institutes for Research, and a Junior Professional Associate, Erika Molina. Among the round of meetings we held with all stakeholders ranging from government officials (legislative and executive), business sector leaders, think- tanks (both from the right and left of the political and economic spectrum), student organizations, academic leaders, and opinion leaders, we met with the leaders of the national Teachers Union, the Colegio de Profesores.

Quality Education is Unfinished Homework for Latin America, says World Bank's VP for the Region

Christine Horansky's picture

In conjunction with the Ibero-American Summit this month, Pamela Cox, Vice President for Latin American and Caribbean, emphasizes the urgent need to focus on education quality in a recent op-ed that appeared in major news outlets across the region:

If education were simply a matter of attending classes, Latin America and the Caribbean would have already done its homework. Most regional countries have made enormous progress towards achieving universal access to basic education. There is also clear progress at the secondary and tertiary levels.

But more than access, the key goal of education is learning. Making sure that children and youngsters perform according to the requirements of the day is a necessary condition for the advancement of society. In that respect, the region still has some unfinished business.