4 attainment in 1960 was significantly below the world mean for countries at similar levels of economic development. Although Mexico's education attainment increased steadily over the following two decades, it continued to remain below the international trend line. In the 1980s, however, the growth of education attainment in Mexico accelerated, permitting it to catch up to international standards by 1990; where its placement in Figure 1 is slightly above the trend line.

The closure of Mexico's education gap vis-a-vis the rest of the world was hastened in part by the country's economic stagnation. Mexico's real GDP per capita in the mid-1990s was roughly the same as it had been in the first half of the 1980s. Had Mexico continued to grow at the same pace as in the 1960s and 1970s (and assuming that the gains in education attainment remain the same), its 1990 placement in Figure I would have continued to remain below the cross-country trend line, though at a much reduced distance compared to previous years.<sup>3</sup> The preceding observation, however, should not detract from the remarkable increase in schooling that occurred during the 1980s. While average schooling level in Mexico increased by roughly one year per decade during 1960-1980 (from 2.76 to 4.77 years), it increased by two years in the decade between 1980-1990. As described in Psacharopoulos et al (1996), this rapid improvement reflects the great efforts made in Mexico to increase both the quality of and access to public education since 1950. A consequence of these developments is that the share of workers with less than primary education decreased from almost half of the labor force in 1984 to 36 percent in 1994, while the share of workers with at least a completed secondary education increased from 26 to 39 percent; Table 1.

The rapid growth of education attainment in Mexico also stands out in recent cross-country growth studies (e.g., Bosworth, 1997), which decompose per capita growth into the contributions from several factors, including education attainment as a proxy for human capital accumulation, in a growth accounting framework. These studies reveal a major break in Mexico's growth performance after 1982. A similar break is visible in the accumulation of physical capital and in total factor productivity growth, but not in the accumulation of schooling, which performed well by world standards.

> 3 Mexico's education deficit -- i.e., the vertical difference from the world trend line in Figure 1 -- has declined significantly since 1960, with the main catch-up occurring in 1980-90. This is clearly visible from Figure 1, but also appears under less restrictive specifications of the estimated trend line. The differences from the trendline are stated below, beginning with the most restrictive specification:

|Equation Specification|1960|1970 1980|1985|1990<br>Std. Error of|
|---|---|---|---|---|
||(differe|nce from world|mean in|years)<br>Regression|
|Stacked, without dummies|<br>-2.22|<br>-2.09 -1.95|<br>-1.36|<br><br>+0.08<br>1.52|
|Stacked with dummy variables|-1.62|-1.49 -1.82|-1.54|-0.26<br>1.48|
|Individual equations for each year|_-1.55_|-1.41 -1.84|-1.59|-0.26<br>na|