Education Is the Key to a Healthy Economy

˙ PREAL Blog

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In a recent Wall Street Journal op-ed, Eric Hanushek and former Secretary of State George Shultz, both senior fellows at Stanford University’s Hoover Institution, highlight the economic benefits of improving K-12 education and argue that the United States needs to do so.

Noting that the country ranked 31st in math scores on the 2009 PISA examination, they estimate that improving the state of education to the level of neighboring Canada – which ranked 10th – would lead to $70 trillion of GDP growth over the next 80 years.

Addressing the much-discussed issue of growing inequality in the country, the authors state that “if we fail to reform our K-12 education system, we’ll be locking in inequality problems that will plague us for decades if not generations to come.” As an example of the entrenched educational inequality that already exists, the authors note that in their home state of California, only 43% of Latino students graduated from high school between 2005 and 2009, and only 10% from college. Unless action is taken to improve American schools, they argue, “issues associated with income distribution – including higher taxes and less freedom in labor and capital markets – will be an ever-present and distressing aspect of our future.”

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