NEW MEXICO:

ECONOMIC FUTURE WITH

EDUCATIONAL REFORM

This file contains detailed projections and information from the article:

Eric A. Hanushek, Jens Ruhose, and Ludger Woessmann, “It pays to improve

school quality: States that boost student achievement could reap large economic

gains,” Education Next, Summer 2016

http://educationnext.org/pays-improve-school-quality-student-achievement-economic-gain/

U.S. and State Interests

• Future depends on skills of the population

• True for the nation and for individual states

• Improvements in student achievement return very large

economic returns to states

• Feasible gains would provide more incomes to state than total

spending on K-12 education

Cognitive Skills and Long Run Economic

Growth: International Evidence

Growth in GDP/pop over1960-2000 as related to math and science skills and

conditional on income levels in 1960

Test Scores and Growth: U.S. states

AL

AZ

ARCA

CO

CT

FL

GA

HI

ID

IL

IN

IAKS

KY

LA

ME

MD

MA

MI

MN

MS

MO

MT

NE

NV

NH

NJ

NM

NY

NC

ND

OH

OK

OR

PA

RI

SC

SD

TN

TX

UT

VT

VA

WA

WV

WI

1.5

22.5

3

Conditio

nal G

DP

per

capita g

row

th, 1970-2

010

460 470 480 490 500 510Conditional average test score

Growth in GDP/pop over1970-2010 for states as related to math

skills and conditional on income levels in 1970

New Mexico’s Position in the U.S.

• The economic performance of states is dependent upon

the skills of their populations.

• States compete with each other in terms of the skills of

their population.

• National Assessment of Educational Progress (NAEP) for

2013 tracks current schools

225

250

275

300

325

Ma

ssachusetts

New

Jers

ey

New

Ham

pshire

Ve

rmont

Min

nesota

Nort

h D

akota

Washin

gto

n

Colo

rado

Pe

nnsylv

ania

Ohio

Ka

nsas

Mo

nta

na

Wis

con

sin

Ma

ine

Te

xas

Virg

inia

Wyom

ing

Ind

ian

a

So

uth

Dakota

Mary

land

Idaho

Nort

h C

aro

lina

Connecticu

t

Iow

a

Nebra

ska

Illin

ois

Natio

nal

Uta

h

Rhode I

sla

nd

Ore

gon

Mis

souri

Dela

ware

New

York

Ala

ska

Haw

aii

Flo

rid

a

Ke

ntu

cky

Mic

hig

an

So

uth

Caro

lina

Arizona

Georg

ia

Nevada

Ark

ansas

Te

nnessee

Calif

orn

ia

Okla

hom

a

West V

irgin

ia

New

Me

xic

o

Louis

iana

Mis

sis

sip

pi

Ala

ba

ma

Dis

tric

t of C

olu

mb

ia

NA

EP

Sc

ore

NAEP 8th Grade Mathematics, 2013New Mexico is at 37th percentile of U.S. distribution

New Mexico is at 22nd percentile of Massachusetts distribution

250

275

300

325

Dis

tric

t of C

olu

mb

ia

Ma

ssachusetts

New

Jers

ey

Min

nesota

Te

xas

Colo

rado

Ma

ryla

nd

Pe

nn

sylv

an

ia

New

Ham

pshire

Connecticu

t

Ve

rmont

Nort

h C

aro

lina

Illin

ois

Washin

gto

n

Virg

inia

Wis

con

sin

Ka

nsas

Ala

ska

Nort

h D

akota

Ohio

Natio

na

l

Arizona

New

York

So

uth

Dakota

Rhode I

sla

nd

Dela

ware

Mo

nta

na

India

na

Nebra

ska

So

uth

Caro

lina

Georg

ia

Calif

orn

ia

Flo

rid

a

Idaho

Uta

h

Wyom

ing

Haw

aii

Ore

gon

Ma

ine

New

Me

xic

o

Iow

a

Neva

da

Mis

souri

Mic

hig

an

Ark

ansas

Mis

sis

sip

pi

Louis

iana

Te

nnessee

Ke

ntu

cky

Okla

hom

a

Ala

ba

ma

West V

irgin

ia

NA

EP

Sc

ore

NAEP 8th Grade Mathematics, White Students, 2013New Mexico is at 45th percentile of U.S. distribution

New Mexico is at 31st percentile of Massachusetts distribution

Projection Methodology

• Educational improvements steady until reaching the post-

2015 goals in 2030

• Work life of 40 years

• Growth rate is based on the average skill of workers

• Consider horizon of somebody born today (80 years)

• Future gains in GDP are discounted to the present with a

3% discount rate

• Implies the projections are directly comparable to current levels of

GDP

Value of Improvement to New Mexico

1. Increasing average achievement by ¼ standard

deviation.

2. Bringing each state up to the best state (Minnesota).

3. Bringing each state up to the best in the geographic

division (Montana).

4. Bringing all students in a state up to the NAEP basic

level.

5. Scenario 2 with single state improvement.

6. Equaling Canada

7. Equaling Finland

2. Equal Minnesota level: 772% of current GDP

0

200

400

600

800

1000

1200

Mis

siss

ipp

iA

lab

ama

Lou

isia

na

New

Mex

ico

Haw

aii

Cal

ifo

rnia

Ark

ansa

sW

est

Vir

gin

iaTe

nn

esse

eN

evad

aG

eorg

iaFl

ori

da

Ari

zon

aO

klah

om

aK

entu

cky

Rh

od

e Is

lan

dSo

uth

Car

olin

aU

SAD

elaw

are

No

rth

Car

olin

aN

ew Y

ork

Illin

ois

Mic

hig

anM

isso

uri

Mar

ylan

dTe

xas

Ala

ska

Uta

hV

irgi

nia

Pen

nsy

lvan

iaO

hio

Ind

ian

aO

rego

nId

aho

Co

lora

do

Was

hin

gto

nW

yom

ing

Co

nn

ecti

cut

Neb

rask

aM

ain

eN

ew J

erse

yK

ansa

sW

isco

nsi

nSo

uth

Dak

ota

Iow

aN

ew H

amp

shir

eV

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on

tM

on

tan

aM

assa

chu

sett

sN

ort

h D

ako

taM

inn

eso

ta

Pre

sen

t V

alu

e o

f St

ate

GD

P

3. Equal Montana level: 689% of Current GDP

0

100

200

300

400

500

600

700

800

New

Mex

ico

Nev

ada

Haw

aii

Cal

ifo

rnia

Rh

od

e Is

lan

dA

rizo

na

Lou

isia

na

Mis

siss

ipp

iM

isso

uri

Wes

t V

irgi

nia

Ala

bam

aA

rkan

sas

Geo

rgia

Flo

rid

aIll

ino

isM

ich

igan

Uta

hN

ew Y

ork

USA

Sou

th C

aro

lina

Neb

rask

aId

aho

Co

nn

ecti

cut

Co

lora

do

Kan

sas

Wyo

min

gO

klah

om

aTe

nn

esse

eSo

uth

Dak

ota

Iow

aM

ain

eD

elaw

are

No

rth

Car

olin

aO

hio

Ind

ian

aP

enn

sylv

ania

Ala

ska

New

…M

aryl

and

Ver

mo

nt

No

rth

Dak

ota

Ore

gon

Ken

tuck

yM

assa

chu

sett

sM

inn

eso

taM

on

tan

aN

ew J

erse

yTe

xas

Vir

gin

iaW

ash

ingt

on

Wis

con

sin

Pre

sen

t V

alu

e o

f St

ate

GD

P

Division Leaders

4. All students to basic: 231% of state GDP

0

50

100

150

200

250

300

350

Cal

ifo

rnia

Ala

bam

aM

issi

ssip

pi

Ten

nes

see

Lou

isia

na

New

Mex

ico

Ari

zon

aH

awai

iW

est

Vir

gin

iaN

evad

aFl

ori

da

Geo

rgia

Sou

th C

aro

lina

New

Yo

rkA

rkan

sas

Mic

hig

anU

SAO

rego

nR

ho

de

Isla

nd

Ala

ska

Mis

sou

riK

entu

cky

Illin

ois

Mar

ylan

dPe

nn

sylv

ania

Uta

hO

klah

om

aD

elaw

are

No

rth

Car

olin

aW

ash

ingt

on

Neb

rask

aC

on

nec

ticu

tIo

wa

Vir

gin

iaId

aho

Ind

ian

aM

ain

eW

isco

nsi

nC

olo

rad

oO

hio

Kan

sas

Ver

mo

nt

Wyo

min

gN

ew J

erse

yN

ew H

amp

shir

eTe

xas

Mo

nta

na

Sou

th D

ako

taM

inn

eso

taM

assa

chu

sett

sN

ort

h D

ako

ta

Pre

sen

t V

alu

e o

f St

ate

GD

P

5. Single v. All States Improve to Best

0

200

400

600

800

1000

1200

Mis

siss

ippi

Ala

bam

a

Loui

sian

a

New

Mex

ico

Haw

aii

Calif

orni

a

Ark

ansa

s

Wes

t V

irgi

nia

Tenn

esse

e

Nev

ada

Geo

rgia

Flor

ida

Ari

zona

Okl

ahom

a

Kent

ucky

Rho

de Is

land

Sout

h Ca

rolin

a

USA

Del

awar

e

Nor

th C

arol

ina

New

Yor

k

Illin

ois

Mic

higa

n

Mis

sour

i

Mar

ylan

d

Texa

s

Ala

ska

Uta

h

Vir

gini

a

Penn

sylv

ania

Ohi

o

Indi

ana

Ore

gon

Idah

o

Colo

rado

Was

hing

ton

Wyo

min

g

Conn

ecti

cut

Neb

rask

a

Mai

ne

New

Jer

sey

Kans

as

Wis

cons

in

Sout

h D

akot

a

Iow

a

New

Ham

pshi

re

Ver

mon

t

Mon

tana

Mas

sach

uset

ts

Nor

th D

akot

a

% o

f cur

rent

GD

P

Single-state improvement All states improve to top-performing state

International Challenge

• Unfortunately the challenge extends beyond U.S. borders

and includes countries around the world.

• Other countries are producing students with both more

education and better education.

6. Equal Canadian level: 781% of current GDP

0

200

400

600

800

1,000

1,200

Mis

siss

ipp

iA

lab

ama

Lou

isia

na

New

Mex

ico

Haw

aii

Cal

ifo

rnia

Ark

ansa

sW

est

Vir

gin

iaTe

nn

esse

eN

evad

aG

eorg

iaFl

ori

da

Ari

zon

aO

klah

om

aK

entu

cky

Rh

od

e Is

lan

dSo

uth

Car

olin

aU

SAD

elaw

are

No

rth

Car

olin

aN

ew Y

ork

Illin

ois

Mic

hig

anM

isso

uri

Mar

ylan

dTe

xas

Ala

ska

Uta

hV

irgi

nia

Pen

nsy

lvan

iaO

hio

Ind

ian

aO

rego

nId

aho

Co

lora

do

Was

hin

gto

nW

yom

ing

Co

nn

ecti

cut

Neb

rask

aM

ain

eN

ew J

erse

yK

ansa

sW

isco

nsi

nSo

uth

Dak

ota

Iow

aN

ew H

amp

shir

eV

erm

on

tM

on

tan

aM

assa

chu

sett

sN

ort

h D

ako

taM

inn

eso

ta

Pre

sen

t V

alu

e o

f St

ate

GD

P

7. Equal Finnish level: 854% of current GDP

0

200

400

600

800

1,000

1,200

Mis

siss

ipp

iA

lab

ama

Lou

isia

na

New

Mex

ico

Haw

aii

Cal

ifo

rnia

Ark

ansa

sW

est

Vir

gin

iaTe

nn

esse

eN

evad

aG

eorg

iaFl

ori

da

Ari

zon

aO

klah

om

aK

entu

cky

Rh

od

e Is

lan

dSo

uth

Car

olin

aU

SAD

elaw

are

No

rth

Car

olin

aN

ew Y

ork

Illin

ois

Mic

hig

anM

isso

uri

Mar

ylan

dTe

xas

Ala

ska

Uta

hV

irgi

nia

Pen

nsy

lvan

iaO

hio

Ind

ian

aO

rego

nId

aho

Co

lora

do

Was

hin

gto

nW

yom

ing

Co

nn

ecti

cut

Neb

rask

aM

ain

eN

ew J

erse

yK

ansa

sW

isco

nsi

nSo

uth

Dak

ota

Iow

aN

ew H

amp

shir

eV

erm

on

tM

on

tan

aM

assa

chu

sett

sN

ort

h D

ako

taM

inn

eso

ta

Pre

sen

t V

alu

e o

f St

ate

GD

P

Summary of Improvement: New Mexico

Improvement

Discounted

reform

billion $’s % current GDP

% future GDP

without reform

1. ¼ stnd deviation 245 262 5.6

2. Equal Minnesota 720 772 16.5

3. Equal division best (MT) 642 689 14.7

4. All at least basic 215 231 4.9

5. Single state to best (MN) 130 139 3.0

6. Equal Canada 729 781 16.7

7. Equal Finland 796 854 18.3

THE CHALLENGE

Improvement is Possible:

Gains on NAEP 1992-2009

0

0.5

1

1.5

2

2.5

3

3.5

4

MD FL

DE

MA

LA

SC

NC

AR

NJ

MS HI

KY

VA

GA

OH

CA

TX

CO

PA

NY

AL

US

A

WY

TN

MN

NH RI

ID IN

MO

AZ

CT

NM

UT

MI

ND

WV

NE

WI

OK

ME IA

NY

WY

HI

MA

RI

LA

NH

NJ

MD

WV

ME

NM

AL

ARKY

OH

ND

NE

MN

MS

DE

MO

VA

IA

GA

SC

USA

CT

WI

PA

OK

UT

TNID

TX

IN

CA

MI

NC

AZ

CO

FL

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

$1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Te

st-

sc

ore

ga

ins

be

twe

en

19

92

an

d 2

011

Increase in Expenditures, 1990-2009 (2009 Dollars)*

Increments in Expenditures and Gains in Student Achievement 1990-2008

No Simple AnswersImprovement is possible but not easy