# Understanding the Trends in Learning Outcomes in Argentina, 2000 to 2012<sup></sup>

Rafael de Hoyos Peter A. Holland Sara Troiano

## **I. Introduction**

Human capital is one of the most important determinants of productivity, the engine of long-term economic growth. As shown in the literature review by Hanushek and Wößmann (2007), years of schooling in itself is not conducive to human capital formation, productivity, and growth. Rather, what triggers a positive relationship between education and economic growth are the skills and abilities acquired in school. According to the authors, these abilities are well measured by standardized tests.

In addition to economic development, quality of education is increasingly acknowledged as crucial to increasing health outcomes, reducing poverty, and fostering civic participation. For instance, Cutler and Lleras-Muney (2008) estimate that the health returns to education may be even higher than the monetary returns. World Bank (2011) shows that more and better education leads to a citizenry that is more responsible, more able to cope with shocks, better at parenting, more able to sustain a livelihood, and better at adopting new technologies. All of these outcomes help drive progress for society at large.

In Argentina, as in other Latin American countries, learning outcomes are well below levels that their per capita GDP would predict, jeopardizing the country’s long-term development potential. While other countries in the region have improved learning outcomes since 2000, measured by the OECD’s PISA test, Argentina’s scores show no progress (at best), or even a marginal decline between 2000 and 2012. Little is known about what is behind these disappointing levels and trends in test scores and, in particular, whether the increased resources that Argentina allocated to education during the period of analysis improved learning outcomes.

In 2002 Argentina suffered a deep economic crisis that contracted GDP by 20 percent, coinciding with a significant reduction in learning outcomes between 2000 and 2006. Output per person increased steadily between 2003 and 2012, along with a dramatic fall in inequality, as the Gini coefficient declined from 0.50 to 0.39 (SEDLAC, 2015). After the approval of the education finance law of 2006, Argentina increased its spending on education from 3.5 percent of GDP in 2005 to close to 6 percent in 2013<sup>1</sup> (Albornoz, 2015). Despite favorable economic performance and a massive increase in resources spent on education, test scores showed only a marginal improvement between 2006 and 2012. More importantly, it is unclear to what extent these trends in learning outcomes are explained by trends in variables that are out of the control of the education system (such as household incomes) and how much can be attributed to education policies. In addition, to our knowledge, there has been no attempt to quantify the impact of this recent increase in education sector financing on test scores.

>  The authors are grateful for useful comments from Christian Bodewig. Authors can be contacted at <u>rdehoyos@worldbank.org</u> (Rafael de Hoyos), <u>pholland@worldbank.org</u> (Peter A. Holland) and <u>troiano.sara@gmail.com</u> (Sara Troiano).

> 1These figures represent revised numbers based on INDEC’s updated calculation for GDP in 2014.

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