Abstract
This paper assesses the impact of school quality on student outcomes, particulnrly iob
performance, and subsequently on economic growth. It hcgins hy showing that ‘investment in human
capital’ has evolved from being viewed as simply an investment of student time to including interactions
hetwecn time and monetary resources which may serve to improve school quality. Evidence is provided
from studies of both elementary/secondary schooling and post-secondary education, and from studies of
developed and less developed nations. It appears that school quality has substantially greater impact on
changes in students’ cognitive and behavioral outcomes in less developed than advanced countries. Yet
school quality seems to effect lifetime earnings of all students regardless of the level of development of
their nations. The paper explains why. in some cases, more years and money spent for schooling may not
necessarily appear to reflect higher earnings. Explanations are provided for differences in the Impact of
school quality on student changes. A major one is the fact that there are significantly diminishing returns
tn expenditures on schooling. along with the fact that expenditure levels are so much lower in the poorer
countries. Reasons are provided as to why, if institutional differences do not account for changes in
students in wealthier nations. these differences should still account for differences in earnings. Factors
such as measurement problems and institutional arrangements come into play in this regard. The paper
concludes that improvement in the quality of schooling provided in developing countries may he more
important for the future economic prospects of these nations in the long run than will expanded acccsh to
poor quality education.
