Test scores help predict level of ‘knowledge capital’ entering the economy

As the kids prepare to head back to school, it’s worth noting that Canada has an excellent record on the Programme for International Student Assessment (PISA), which is administered every three years to 15-year-olds worldwide, consistently out-performing the United States, United Kingdom, France and other countries. This is more than just a feather in Canada’s cap—or, more accurately, the provinces, which have responsibility for education—because PISA scores are associated with economic growth and prosperity.

When high school grads move into the workforce and onto college and university, those that did well in school are usually better prepared to do well at work and in higher education. As they move through their careers, followed by successive waves of high-achieving school grads, their cumulative contributions to the workforce increase the “knowledge capital” available to help grow the economy and bring increased prosperity to all. (Provided, of course, economic growth is not stifled by excessive taxation, regulation or other issues.)

As discussed in a recent study published by the Fraser Institute, higher average PISA scores are positively associated with the production of knowledge capital, which helps fuel future economic growth and prosperity. Therefore, it’s no surprise that Canada and other high-income countries should have higher average PISA scores than countries with less-developed economies.

But what may be surprising is that Canada’s higher PISA scores are not associated with comparatively higher levels of per-student spending. Of the 33 OECD countries studied, 11 countries—including the U.S., U.K. and Germany—spent more per K-12 student than Canada while achieving lower average test scores.

A similar pattern was found within Canada where the highest-scoring provinces of Alberta, Quebec and Ontario were in the mid-range of K-12 spending while highest-spending Saskatchewan and Manitoba were among provinces with the lowest average PISA scores. And while British Columbia had the lowest per-student spending, it had the fourth-highest test scores.

This doesn’t mean we can improve test scores by spending less on schools. Like Canada, some jurisdictions do indeed outperform higher spenders—Estonia, Japan and Quebec being prime examples. Yet other lower-spending countries such as Chile and Lithuania also have low test scores. Then again, while France and Italy spend similar amounts to Canada, they have significantly lower PISA scores. In short, there’s no reliable relationship in wealthy countries between how much money is spent on K-12 schools and how well 15-year-old students perform on PISA tests, which again help presage the knowledge capital available to their economies.

Despite Canada’s current enviable position as a high-performing modest-spending education country, our PISA scores have been gradually declining, slowly eroding knowledge capital. Meanwhile, PISA scores in other countries have been rising, increasing their stocks of knowledge capital and their economic competitiveness. The so-called Asian Tigers of Singapore, Hong Kong, Tiawan and Korea are prime examples (especially Singapore which currently dominates PISA scores).

Singapore spends more per K-12 student than Canada but less than other more poorly performing countries. But given the lack of a clear and consistent relationship between school spending and student performance, it’s highly unlikely that Canada would be able to match Singapore’s PISA scores by increasing spending to the same level or beyond. Indeed, it seems unlikely that Canada or other jurisdictions with long-established, well-developed and resourced K-12 school systems would be able to produce sustainable increases in knowledge capital by increasing spending, unless increases are specifically targeted at changes likely to improve PISA scores.

Finding ways to do this is becoming an increasingly pressing challenge for both education and economic policy.