Eric A. Hanushek

Eric Alan Hanushek (born, 1943) is a Paul and Jean Hanna Senior Fellow at the Hoover Institution of Stanford University. He is an expert on educational policy, and the economics of education. His research spans both the economics of school policy and the impact education on individuals and on economies. Major lines of research have focused on controversial areas of education policy including class size reduction, high stakes accountability, and the importance of teacher quality. He is perhaps best known for the controversial assertion that "money doesn't matter"—that is, he says that the amount of money spent in an American school district is not related to the amount of student learning in that district—and he is often called to testify in court about school funding schemes.[1] Recent research has emphasized the interaction of education and economic growth. Hanushek received his PhD in economics from MIT and is a Distinguished Graduate of the United States Air Force Academy.


Hanushek is a member of the Koret Task Force on K-12 Education, a research associate of the National Bureau of Economic Research and chairman of the Executive Committee for the Texas Schools Project at the University of Texas at Dallas. He is a Research Professor at the Ifo Institute for Economic Research (University of Munich) and Area coordinator for the Economics of Education under the CESifo Research Network. He has been appointed to a variety of federal and state advisory boards including being a Presidential appointment to the Board of Directors of the National Board for Education Sciences, which he chaired in 2009-2010. In 2011, he became a commissioner on the Equity and Excellence Commission of the U.S. Department of Education. At the state level, he was a member of the Governor’s Advisory Committee on Education Excellence in California and the Governor’s Commission for a College Ready Texas.

He has been an expert witness in a number of court cases involving school finance, including the landmark cases of Serrano v. Priest in California and Abbott v. Burke in New Jersey. His amicus brief entered significantly into the 2009 U.S. Supreme Court decision of Horne v. Flores, a case that contrasted outcomes of government programs with spending and other inputs.

He is a member of the National Academy of Education and a fellow of the International Academy of Education, of the Society of Labor Economists, and of the American Educational Research Association. He was awarded the Fordham Prize for Distinguished Scholarship in 2004. He served in the federal government as Deputy Director of the Congressional Budget Office, Senior Staff Economist at the Council of Economic Advisers, and Senior Economist at the Cost of Living Council. Previous academic appointments include the University of Rochester, Yale University, and the U.S. Air Force Academy.

He is married to Margaret (Macke) Raymond, director of the Center for Research on Education Outcomes (CREDO) at Stanford University. CREDO has done the broadest and most reliable national studies of charter schools in the United States.

Significant Research Areas

His research has covered a wide variety of topics in education and education policy. A distinguishing feature of his research has been bringing rigorous scientific analysis to educational policy debates and development.

His Ph.D. thesis introduced the now-standard model of an “educational production function” into the analysis of education issues.[2] Most importantly, it emphasized the clear distinction between outcomes of education and inputs to the process. This model describes how various school inputs combine with family, neighborhood, and peer factors to produce educational outcomes, where outcomes are typically measured by student achievement, continuation in school, or ultimately income and employment.[3] When placed in the common value-added form, it identifies the impact of added resources, given prior achievement and other non-school factors.

Working closely with John F. Kain, he helped to develop the Texas Schools Project[4] at the The University of Texas at Dallas (UTD). The Texas Schools Project demonstrated how administrative data from schools could be used to construct research data bases that permitted analysis of a wide range of educational issues such as the operation of teacher labor markets,[5] the impact of special education,[6] student mobility and school choice,[7] and charter schools.[8] The research structure of the Texas Schools Project was the model for the broad development of similar administrative data bases in Florida, North Carolina, New York, and elsewhere, and the research and evaluation possibilities have motivated federal support for development of longitudinal data bases of states.

Resources and Class Size

He is most widely known for his analysis of the determinants of student achievement. His early analyses documented the inconsistent relationship between school resources and student outcomes.[9] The overall finding was initially very controversial and led to many subsequent studies.[10] A study using the method of meta-analysis applied to Hanushek's set of studies, Larry Hedges and coworkers refuted his findings,[11] showing that $100 spent per pupil (1989 dollars) raised student achievement by one-fifth of a standard deviation.[12] This refutation, however, was inconsistent with U.S. experience where a quadrupling of inflation-adjusted spending per pupil between 1960 and 2010 led to insignificant improvements in student achievement. The surrounding controversy led to responses from Hanushek[13] and from Alan Krueger,[14] among others. Currently available research leads to the widely accepted conclusion that how money is spent is much more important than how much money is spent. The research related to the high cost and the general ineffectiveness of class size reduction was particularly controversial and entered into a variety of on-going policy debates.[15]

The analysis of the impact of educational resources has been central to many debates about school finance and has been a significant component of court cases about state funding of schools. The lack of relationship between resources and outcomes has been introduced to rebut the central premise of many school finance court cases that simply providing more money will solve existing student achievement concerns.[16] It additionally offers scientific evidence against attempts to estimate the cost of providing any given improvements in achievement, sometimes labeled as “adequate” outcomes.[17]

Teacher and Administrator Quality

At the same time, his research documented the overwhelming importance of teacher quality, although it showed that teacher effectiveness is not closely related to the salaries, education, or experience of teachers. He was the first researcher to measure teacher effectiveness by the learning gains of the teacher's students.[18] While early analyses of schools[19] were interpreted as saying that schools and teachers were not very important for student achievement, Hanushek's work showed that this conclusion was the result of inaccurate measurement of the impact of teachers. One of his early studies of disadvantaged students in a central city school district, for example, found that poor teachers got gains of one-half year of learning each school year while good teachers got gains of one and one-half years of learning – i.e., a difference of one full year of learning in a single school year.[20] Subsequent research has reinforced his conclusion and has led to the consensus that teachers are the most important factor in determining the effectiveness of schools.[21]

Hanushek's evaluation of teachers on the basis of student learning is the foundation of the now-common approach to assessing teacher quality by the "value-added" of the teacher. The use of student achievement information and value added measures of teacher effectiveness has become part of the public debate on school reform. The Los Angeles Times heightened the controversy over the use of these measures when it published the value added ratings for more than 6,000 teachers in 2010.[22] Other newspapers, including the New York Times, subsequently published such measures for their local teachers. The use of these measures in personnel decisions has become a contentious issue in bargaining over teacher contracts with the teacher unions. See, for example, accounts of the protracted impasse in Washington, DC, between Michele Rhee and the teachers unions.[23]

When this outcome-based approach to measuring effectiveness is extended to analyze school principals, it is found that principals have a very large impact on student achievement.[24] Effective school leaders have been shown to significantly improve the performance of all students in a school, at least in part through their impacts on selecting and retaining good teachers. Ineffective principals, however, have a similarly large negative effect on school performance, suggesting that issues of evaluation are as important with respect to school leadership as they are for teachers.

Peers and Racial Concentration

Along with his co-authors John Kain and Steven Rivkin, Hanushek has addressed several aspects of peer interactions in the classroom. Their estimation of elementary school achievement growth in Texas indicates that the achievement level of peers positively affects achievement and that this impact is roughly constant across the achievement distribution.[25] In contrast, the variance in achievement appears to have no systematic influence, leading to the conclusion that ability grouping per se has no separate impact.

When they extend their peer analysis to consider racial concentrations in schools, they find larger and more policy-important effects. Black students appear to be systematically hurt by larger concentrations of black students in their school. These impacts do not extend to either white or Hispanic students in the school, implying that it is related to peer interactions and not school quality.[26] Moreover, it appears that the impact of black concentrations in schools is largest for high achieving black students.[27] These analyses, which are reinforced by other investigations, underscore the importance of school integration, a policy most forcefully argued in Brown v. Board of Education and subsequently modified over time through the 2007 U.S. Supreme Court decision in Seattle (Parents Involved v. Seattle).

Economic Impacts of Education

In other work he has shown that cognitive skills are very closely related to economic outcomes, not only for individuals but also for nations. Variations in growth rates across countries can be largely explained by consideration of the role of cognitive skills.[28] While the analysis of the impact of cross-country differences on growth has been criticized as failing to identify the causal effects of schooling,[29] much of this concern appears to arise simply from the imperfect measure of human capital when based on years of school attainment of the labor force. When measured by cognitive skills, however, human capital differences are shown to explain a very large portion of differences in long run growth rates across countries, to be insensitive to other measured differences among countries and to the particular sample of countries, and to be supported by a variety of tests of the causal effect.[30]

For economic growth, cognitive skills seem equally important for developed and developing countries. Differences in growth among Organisation for Economic Co-operation and Development (OECD) countries closely reflect differences in mathematics and science achievement.[31] Differences in achievement also appear to explain completely the slow growth of Latin America.[32]

At the individual level, differences in cognitive skills across countries receive varying rewards in the labor market. The U.S. appears to reward skills the most, while Poland, Sweden, and the Czech Republic provide the least return among selected countries.[33]

By linking the analysis of teacher value-added with research on the economic impact of differences in achievement both for individual earnings and for economic growth, Hanushek has estimated the economic value of high quality teachers, showing that the impact of differences in teacher quality is very large. In one set of analyses of the impact of ineffective teachers, he indicates that the least effective teachers in U.S. schools have an especially large impact of student achievement. By his estimates, replacing the least effective 5-8 percent of teachers with an average teacher would yield increases in Gross Domestic Product (GDP) of $75–110 trillion in present value.[34] These findings have stirred considerable controversy about the necessity to improve the evaluation of teachers and to use these evaluations in personnel decisions.


The analysis of the economic impacts of achievement provides a justification for state and federal accountability systems that promote higher skills through improved school quality. In work with Margaret Raymond, Hanushek has shown that test-based accountability systems of the states have led to improved student achievement.[35] Subsequent research has tended to reinforce this conclusion, although existing accountability systems have also introduced some unwanted outcomes.[36]

The debates about the value of test-based accountability systems became particularly heated when the United States National Research Council produced a report arguing that the research did not support the use of test-based accountability such as the No Child Left Behind Act or high school exit exams.[37] Hanushek argued, however, that the evidence against accountability was weak and that the interpretation of the NRC report was biased.[38] This critique led to a further exchange about the specific effects of high school exit exams on achievement and on drop outs.[39] These scientific debates are central to the re-authorization of the No Child Left Behind Act and to the expansion of high school exit examinations.

Institutional Design

In pioneering work with Ludger Woessmann and various co-authors, Hanushek has developed several alternative approaches using comparative international data to identify the impact of major educational institutions that distinguish the educational systems of different countries. The operations of schools within a country are shaped and affected by the institutional structure of schooling in the country, but it is very difficult to assess the importance of many of the most significant aspects of the educational environment when the institutional framework applies to all schools within a country.[40]

The role of early tracking of students into different school experiences is an example: While some countries track students into differing-ability schools by age 10, others such as the United States keep their entire secondary-school system comprehensive.[41] Hanushek and Woessmann identify the impact of systemic tracking by comparing differences in student outcomes between primary and secondary schools across tracked and non-tracked systems.[42] The results suggest that early tracking increases educational inequality. While less clear, there is also a tendency for early tracking to reduce average performance.

Countries also differ in how much local decision making they permit in their schools, with some countries moving toward having more local autonomy in educational decisions and others moving toward having less. Hanushek, Woessmann, and Susanne Link use international assessment data from the Programme for International Student Assessment, or PISA, and exploit the repeated testing over time to analyze the impact of local decision making. In a unique analytical design they compare the changes in student achievement within individual countries to changes in local autonomy over various educational decisions.[43] They find that local decision making has a positive impact on student performance in more developed countries and in countries with external examinations for students. But, in less developed countries, particularly those that are unable to monitor the behavior of schools through external examinations, more local decision making is harmful. In addition to identifying the impacts of local autonomy, they highlight the fact that it might not be valid to generalize all research findings from developed countries to developing countries.

Another significant institutional difference among countries is the degree of reliance on vocational education versus general education. While some analysis suggests that emphasizing specific skills such as through vocational schooling leads to slower economic growth,[44] the impact of growth on employment of vocationally trained workers cannot be neglected. With very specific training, workers might be able to find work more easily when young but may be disadvantaged later in life when new technologies make their skills obsolete. Hanushek, Woessmann, and Lei Zhang compare the life-cycle employment and earnings patterns of those with vocational and general education across countries and find that workers in the most vocation-intensive countries (“apprenticeship countries”) do suffer later in their careers and tend to leave the labor force noticeably earlier than workers with general training.[45]

These analyses have two components. They address important policy issues, and they simultaneously demonstrate how different analytical strategies can deal scientifically with issues of overall country institutions in comparative cross-country analyses. This work exploits the existence of international assessments (such as PISA and TIMSS) to provide common measures of student outcomes that can be used to permit understand how institutions affect performance.

Education in Developing Countries

Developing countries generally have less well developed school systems that have been the focus of attention of various development agencies such as the World Bank and UNESCO. Because developing countries have traditionally had low school attainment levels, international policy emphasis has been placed on expanded access, most notably the Education for All initiative and the Millennium Development Goals. But, the growth analysis of Hanushek and Ludger Woessmann[46] makes it clear that expanding access will not help unless it provides a high quality education that improve cognitive skills – something that has not happened in many developing countries. Moreover, analysis of Egyptian schools suggests that school quality and student dropouts are directly linked: In low value-added schools, dropout rates are significantly greater than in high value-added schools. In other words, if students are not learning anything, it is completely rational to drop out.[47]

Somewhat surprisingly, Hanushek's meta-analysis similar to those in the U.S. shows that general policies to improve resources have not been consistently productive in developing countries, even though they have noticeably lower levels of inputs.[48] In the poorest areas of Brazil, for example, Hanushek and Ralph Harbison show that there are large differences among schools and teachers but that they are not systematically related to teacher education, teacher experience, and most other measures of general resources of schools.[49] At the same time, targeted policies that can improve student achievement such as providing text books can lead to more efficient schooling by cutting down on grade repetition.[50]


His 2009 book with Alfred Lindseth, Schoolhouses, Courthouses, and Statehouses: Solving the Funding-Achievement Puzzle in America's Public Schools, analyzed the shortcomings of U.S. school funding and policies and proposed a new system of performance-based funding to improve school outcomes. His other books on education include Courting Failure, Handbook of the Economics of Education, The Economics of Schooling and School Quality, Improving America’s Schools, Making Schools Work, Educational Performance of the Poor, and Education and Race. A listing of his other books and of his 200 plus professional articles is found on his website.[51]


External links

  • Interview with Eric Hanushek on the elements and implications of high quality education
  • Stanford University web site.

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