Closing U.S. educational achievement gaps will increase GDP growth & raise revenue

Washington, D.C. – Improving educational outcomes and narrowing the educational achievement gaps of future workers would significantly increase long-term U.S. economic growth and raise government revenues, a new Washington Center for Equitable Growth report finds. The study, authored by Equitable Growth Visiting Fellow and Everett E. Nuttle Professor of Economics at Washington College Robert Lynch, calculates the key economic and tax benefits of raising the educational achievement of children from less advantaged socioeconomic backgrounds over the next 35 years (by 2050) and 60 years (by 2075). The analysis also includes a new interactive allowing readers to explore the economic ramifications of closing the educational achievement gaps.

The report utilizes three scenarios to illustrate the economic consequences of raising the educational achievement of children from the bottom three quarters of families who are most socioeconomically disadvantaged to more closely match those of children born into the top quarter of families. The bronze scenario looks at the impact economic impact of matching the Organisation for Economic Co-operation and Development average in math and science achievement scores among its developed-nation members. The silver scenario models the cumulative impact if the United States were to bring the U.S. educational outcomes in line with Canada’s achievement scores. The gold scenario calculates the impact of bringing the U.S. average math and science achievement score up to par with the scores of the most advantaged U.S. students.

“The reality in the United States is that persistent educational achievement gaps are generating a massive waste of both human talent and economic potential,” says Equitable Growth Visiting Fellow and report author Robert Lynch. “By merely maintaining the status quo, research shows us that the United States is throwing away enormous economic benefits that we could capture if we pursued policies that raised education achievement. The good news is that by making investments that raise educational achievement and narrow achievement gaps through a broad array of reforms, which include education reform and a host of family friend worklife policies, the improvements would pay for themselves through higher GDP growth rates and increased government revenues. The result of such investments is a 21st century economy where children can thrive and more fully contribute to America’s future economy as highly-skilled workers.”


Key facts from the report:

  • The analysis quantifies various economic and fiscal outcomes under these three educational scenarios over the next 35 years, between 2015 and 2050 when the pressure of supporting the retired baby boomers will have largely abated, and over the next 60 years, to 2075, when the benefits of narrowing educational achievement gaps will have been fully phased in.
  • For each scenario, a simulation model is used to estimate the economic effects of potential policy reforms that raise U.S. scores on the Program for International Student Assessment tests—the best way to measure global educational competitiveness—and improve the  educational achievement of U.S. children and reduce disparities in  educational outcomes among them.
  • Specifically, the study quantifies how much greater U.S. economic growth and tax revenues would be. The analysis also assesses the reductions in economic inequality that result from the narrowing of education gaps.


A summary of the findings:

Economic Consequences of Improving Educational Outcomes                       

The implications of these findings include:

  • Improving the education of future workers across the income spectrum accelerates economic growth and can promote more equal opportunity over the long run.
  • Closing educational achievement gaps can boost tax revenue gains that would amply pay for themselves in the long run.
  • Expanding educational opportunities well beyond school-specific reforms to include early childhood care and education, parenting support, criminal justice reform, and family friendly workplace policies can help close these achievement gaps.

Click here for the interactive
Click here for the report
Download the full pdf report
Download the Fast Facts pdf

February 3, 2015

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