In the last international PISA assessment for math and science, Vietnam outperformed many developed countries, including the UK and the US. Yet Vietnam only has a small fraction of the GDP of these countries. No other low-income country performs at the same level or better than developed countries on an international assessment.

This “Vietnam effect” shows that high education quality is possible even with lower income levels, and appears to reveal revolutionary possibilities. Should other countries with similar income levels, such as Indonesia, be asking themselves: “Why not me?”

Source: Dang, H. & Glewwe, P. (2017) Well Begun, but Aiming Higher: A Review of Vietnam’s Education Trends in the Past 20 Years and Emerging Challenges, based on data from PISA and World Bank WDI

The case for Vietnam as an exemplary outlier rests on the measurement of Vietnam’s performance being valid and reliable. Questions have been raised about the validity and reliability of PISA results and whether the high performance of some countries is representative of only a small privileged part of the population. There are two possible concerns: first, the test covers only in-school populations so it leaves out all those children who are not in school, and who may also be more likely to be academically weaker. Second, the PISA sampling may allow some education administrators to select the best performers from “better-off” cities or regions, which could lead to samples that are not representative.

On the first point, not only does Vietnam do exceptionally well on learning outcomes, it also has great results for school enrollment and completed years of schooling. Vietnam has close to universal school enrollment at the primary level and lower secondary levels. Upper secondary enrollment has also seen amazing improvements, tripling from 27 percent in the early 1990s to 70 percent in recent years. In fact, the mean years of schooling of Vietnam’s adult population is higher than would be predicted by its per capita income (Dang & Glewwe, 2017). Therefore, the concern that PISA is not testing a significant proportion of out-of-school children is an issue when drawing comparisons with countries with universal enrollment at the PISA testing age of 15 years, but not a dominant issue. 

On the second point, if there are sampling issues where some countries are able to select top performers from “better-off” cities or regions, then these are legitimate concerns that need to be independently investigated. However, the recent RISE paper by Dang & Glewwe (2017) uses alternate data sources to see what learning for Vietnamese children looks like. The paper uses nationally representative high-quality household survey data spanning a period between 1992 and 2014 combined with national grade 5 assessment data. Pulling together all the different data sources and analyzing the results still paints a promising picture of the learning outcomes for Vietnamese children. While these national databases do not allow for cross-country comparisons, they paint a clear upward trend for learning in the country. For math, test scores for grade 5 students jumped 0.40 standard deviations between 2001-2007. For Vietnamese language test, the jump was 0.22 standard deviations. These are huge jumps for a short span of 6 years, particularly compared to countries like India and Indonesia where indications are that scores have been stagnant at best.

Vietnam’s strong performance isn’t a mere illusion.

But a second concern is that since Vietnam is the only country in Figure 1 in the “low income/high performance” part of the graph, other countries could draw the conclusion that there is something completely unique about Vietnam. However, Vietnam appearing alone in that part of the space is an artefact of using current scores and GDP per capita. If one looks historically, one sees a number of other countries (albeit perhaps just by bias in the sample of countries for which international assessments took place, we have only East Asian examples) that achieved US levels of performance at levels of GDP per capita that are very low. 

For instance, Japan in the early 1960s had only 13 percent of US current income level but already was far ahead of the United States in mathematics performance. In the early 1980s Thailand was still quite poor (had only 8 percent of US current income level, the same as contemporary Vietnam) but had science achievement of 13-year-olds equal to that of the United States.

Source: Medrich & Griffith 1992 for assessment outcomes, PWT8.0 for GDP per capita.Note: Figure uses the 2011 GDP per capita figure for Vietnam. Figure uses simple average for cases with multiple years.

Figure 2 is potentially good news for two reasons: One, the fact that other countries besides Vietnam have managed to achieve high student learning performance at low levels of income suggests that Vietnam is not a singular experience and hence raises some hope that others can reach similar levels of performance. Two, one reason why the graphs in Figure 1 with just data for 2015 don’t show Japan, Korea, and Thailand as outliers is that they have had very rapid growth and hence have achieved high levels of productivity consistent with high levels of learning achievement. Hence, if Hanushek and Woessmann are right about the huge potential benefits for economic growth of higher learning outputs, then this explains why Vietnam appears in a current cross-section like an outlier—the others who were outliers had massive gains in income. 

This still leaves the question of why Vietnam (and not other countries) is such a contemporary outlier? The question is the subject of the RISE Vietnam country research team agenda that is seeking to understand how Vietnam “got it right.”

This is one of a series of blog posts from “RISE"—the large-scale education systems research programme supported by the UK’s Department for International Development (DFID) and Australia’s Department of Foreign Affairs and Trade (DFAT). Experts from the Center for Global Development lead RISE’s research team.

Social psychologists discovered in the 1950s that counter-attitudinal advocacy—e.g., paying people to express a repellant view, but not quite enough to fully rationalize it—is an effective form of persuasion. So I should preface this post by noting that I recently traveled to the Global Education and Skills Forum in Dubai on a free economy-class airline ticket to participate in a mock debate where I was assigned, together with Princess Sarah Zeid of Jordan, to argue the somewhat obnoxious position that international aid donors spend too much money on girls' schooling.

Luckily, I did not persuade anyone, including myself. There was even an audience poll before and after the debate to prove Lucy Lake of Camfed and Caroline Riseboro of Plan soundly defeated our team. But cognitive dissonance is a powerful drug. So while I still think it’s silly to argue we spend too much on girls' education, perhaps it’s reasonable to ask—as I did, not persuasively, in Dubai—whether a concern with gender equality and a cold hard look at recent data would lead anyone to put their marginal dollar into girls' schooling over, say, campaigning for gender quotas (which seem to work well in Indian politics, at least) or even subsidized childcare (which has boosted female labor force participation in Latin America).

Let’s start with the gender pay gap. The simple and unsurprising fact is that the gap in earnings power between men and women is enormous in many parts of the developing world, and—perhaps more surprisingly—almost none of this has to do with educational disadvantage.

Over the last several years the World Bank has launched a program, known as the STEP surveys, to collect detailed, comparable data on labor market outcomes including not just schooling but also skills. A number of things stand out from this data. (Note that the surveys only cover urban areas in each country.)

First, gender pay gaps are huge—and much bigger than often reported if we step back a bit. There is a tendency in documenting these numbers to rush ahead and focus on pay differentials conditional on being employed. Famously, American women earn 79 cents for every dollar a man earns for the same hours worked. But particularly in the developing world, the biggest source of income gaps stems from lower rates of labor force participation. Looking at the unconditional gender gaps—i.e., including all the zeros for men and women without a cash income—in urban Ghana women only earn about two-thirds of what men earn. In Colombia it’s only half, and in Sri Lanka women earn less than a third of what men earn.

Second, education explains almost none of this. We can see this using a simple Blinder-Oaxaca decomposition. This simple, descriptive technique estimates the return to schooling in observational data, then given those returns, breaks the gender pay gap into the part that can be explained by education differences between the sexes and those which remain unexplained even if we equalized schooling.

The result in the case of the World Bank data is that in only one country (Laos) does girls’ schooling deficit explain a large share of the gender pay gap. In the other 11 countries it doesn’t. In half of the countries, women’s education actually exceeds men’s on average. And in five of the remaining six countries, education explains relatively little of the earnings gap.

The data and code Blinder-Oaxaca decompositions in the graph is available here (and thanks to Lee Crawfurd for sharing earlier STEP do-files).

Consider the case of India. As noted in an earlier post, the government’s recent Economic Survey calculated there are still 63 million missing women, and another 22 million "unwanted women" based on the tendency of families to keep having kids if they have a girl and stop once they have a boy. Gender discrimination is acute and deeply rooted.

In their adult lives, those girls—wanted or unwanted—are more than 50 percentage points less likely than their brothers to have a job, and if they do, they’ll earn about 22 percent less. The political sphere is often no better than the economic. Just 66 of India’s 543 national legislators in the Lok Sabha are women.

But rather than girls' schooling being an obvious target for change, education indicators are actually an oasis of relative gender parity in India’s social statistics. According to official statistics, girls’ primary and lower-secondary completion is already higher than boys, and gross tertiary enrollment is at parity. Independent data collected by the NGO Pratham in the ASER surveys finds that girls at age 13 are slightly (4 percent) less likely to be able to solve the hardest questions on a simple mathematics test. While in need of redress, this 4 percent mathematics gap can hardly explain the horrific economic and social disparities we see in other domains.

In a sense, everything in life is stacked against Indian girls except school. (And kudos to the activists who made that true.)

By all means, let’s spend more on girls' schooling. It’s a great investment. But the reason women in Sri Lanka earn a third of men isn’t because they’re less educated. They’re not. Similarly, the reason there were more men named “Michael” at Davos this year than all women combined isn’t because there weren’t enough educated women to invite. And the reason fewer than one in five legislators in the developing world is a woman isn’t because there are no women qualified to serve. If donors spend money on girls' schooling programs thinking, “If only girls were more educated, they’d get equality” they’re fooling themselves, and implicitly accepting the status quo.

Thanks to Maryam Akmal and Divyanshi Wadhwa for excellent research assistance.

Teachers in poor countries earn far more, in relative terms, than teachers in the OECD—and several recent studies suggest their pay isn’t linked to skills or performance. But we also have growing evidence that high-quality teachers generate huge economic returns. The question is how to ensure high pay attracts high quality.

Education is in crisis, in the sense that hundreds of millions of kids are currently in school who will probably never acquire functional literacy or numeracy. More and more, the rhetoric from aid agencies is focused on the need to improve the quality of teaching, and indeed reform whole systems. This emerging consensus is generally skeptical of increased spending.

Indeed, once you strip away the hype, proposals to “disrupt” failing education systems in developing countries often boil down to paying teachers less. That agenda is rarely explicit, but it’s nearly ubiquitous. From low-cost private schools to ed tech and scripted lesson plans, the common denominator of many of the most celebrated innovations in global education today is cutting reliance on well-paid, public employees.

What does the empirical evidence on teacher pay and student performance around the world tell us about the prospects for this agenda? If you believe more money and more teachers is the answer, read the first two points below. And if you think teachers unions and bloated salaries are the problem, stay for the third point as well.

This may come as a bit of a surprise to many rich-country readers. There's no doubt that teachers in, say, India earn much less than teachers in Ireland, but relative to context, they tend to be very well paid. Dividing by per capita GDP is a rough and ready way to put salaries in context. With the help of my research assistant Mallika Snyder, we pulled together teacher salaries from as many countries as possible and ranked them in terms of their ratio to per capita GDP.

In most OECD countries, an average teacher earns somewhere between 75 percent and 150 percent of GDP per capita. Most sub-Saharan African economies are at the other extreme. Looking at the two largest countries in the region, Nigeria pays teachers nearly 500 percent of per capita GDP, and Ethiopia nearly 700 percent.

First, perhaps high salaries reflect a skill shortage. Teachers tend to have skills that are in short supply in poor countries, which will tend to drive up their relative wages. The general pattern that low-income countries pay more in relative terms (orange) than middle-income countries (green) and high-income countries (gray bars), fits this logic.

There is a second explanation though, that seems to fit the evidence better. Public school teachers in many developing countries earn civil service salaries that are far higher than market wages. This is what economists traditionally refer to as “rents.” The graph below highlights four examples.

In Kenya, identical teachers earn twice as much in public schools as the private sector. That's the conclusion from my recent paper with Nicholas Barton and Tessa Bold, "Measuring Rents from Public Employment" which exploits a discontinuity in the hiring rule for civil service teachers in Kenya to compare their earnings uncontaminated by observable or unobservable human capital differences. Because hiring is done almost entirely on seniority, teacher training graduates wait in a long queue for government teaching jobs in Kenya—in some districts as long as eleven years in our sample—and often work in the private sector until their number comes up. Comparing people just above and below the hiring cut-off in a given year gives us a clean measure of the salary jump from public employment— which we find is roughly 100 percent.

Our paper joins a number of recent studies with very underwhelming findings about the impact of teacher pay. In India, Karthik Muralidharan and Venkatesh Sundararaman  found that low-cost private schools produce similar learning levels while paying one-fifth as much. In Pakistan, Nathalie Bau and Jishnu Das find that shifting teachers to short term contract status—effectively slashing their pay by 35 percent—led to no decline in student learning. And perhaps most strikingly, an RCT in Indonesia by a team at the World Bank found that doubling teacher pay led to no improvement in student learning. The paper’s title says it all: “Double for Nothing.”

(I confess that my emotional reaction to the Indonesia study changed a bit when I saw where Indonesia ranked on teacher pay beforehand—i.e., dead last in our data.)

In the United States, a much-touted study by Raj Chetty and colleagues followed the participants from a randomized trial in Tennessee in the 1980s who had been assigned to different teachers, and found that based on the benefits they deliver to their students it would make economic sense to pay an above-average kindergarten teacher about $320,000 a year.

There's some evidence this same logic applies in developing countries. A massive study by the Inter-American Development Bank randomly assigned kids in Ecuador to kindergarten teachers and found major divergence in their learning outcomes. While they can't (yet!) trace these effects through to adult outcomes, the size of the effects on test scores is at least as large as the US results in the Chetty et al study. A similar study in Uganda by Julie Buhl-Wiggers and coauthors that randomly assigned pupils to classrooms found similarly large effects of teacher quality on student outcomes.

If we take these results seriously, teacher salaries that are five- or even seven-times per capita GDP as in Nigeria or Ethiopia may not look so crazy after all.

There is a risk that the emerging policy consensus among international donors and policymakers about the “learning crisis” in developing countries is built on points (1) and (2), while failing to process point (3). Teachers are seen as overpaid and underperforming, and solutions focus on replacing them with cheaper labor or even capital, in the form of “ed tech.”

In case you think I exaggerate, here’s World Bank President Jim Kim at a recent CGD event (starts around minute 39:00):

So we did a study on the quality of education, the achievement of teachers in six East African countries [Bold et al 2017]. And when we gave tests to the teachers in these six African countries, and this is in our World Development Report, only one-third were able to pass the second grade test. Right. So I would ask you, is there a path forward where putting more money into that public system is going to lead to the system disrupting itself and getting to better outcomes? Right.

If you watch the full clip, you’ll see putting this quote in context makes it more, not less startling. Kim is talking about a wholesale shift away from the World Bank providing aid to governments in favor of facilitating commercial deals, with a goal (again, explicit) of replacing public delivery with private involvement in “health, education, water, other services.”

Creating a professionalized teaching corps, where high pay is matched to high expectations is no small task. Given the daunting nature of that kind of institutional reform, it is not obvious that the World Bank would be wrong to focus on  scripted lesson plans, and to promote investments in education technology, automation of the teaching profession, and less reliance on highly-educated teachers that are in short supply in many poor countries. But don’t forget point three. Because for all the hype around disruption and automation, the current evidence is equally consistent with the idea that investing significantly more money to train, recruit, and retain the highest quality teachers in public education systems is even better value for money.

Thanks to Maryam Akmal, Mallika Snyder, and Divyanshi Wadhwa for research assistance, and to Lant Pritchett for helpful discussions.

This is one of a series of blog posts from “RISE"—the large-scale education systems research programme supported by the UK’s Department for International Development (DFID) and Australia’s Department of Foreign Affairs and Trade (DFAT). Experts from the Center for Global Development lead RISE’s research team.