The United States is not investing as much in human capital as other developed countries. As a result, its comparative advantage is falling behind. For example, U.S. students' math skills have remained stagnant for decades.
This means they are falling behind many other countries, such as Japan, Poland, and Ireland, which have greatly improved. In fact, U.S. test scores are now below the global average.
Comparing Test Scores
The Program for International Student Assessment tests 15-year-old students around the world and is administered by the Organization for Economic Cooperation and Development. In 2018, when the test was last administered, the U.S. placed 11th out of 79 countries in science. It did worse in math, ranking 30th.
The U.S. scored 478 in math, below the OECD average of 489. That's well below the scores of the top five, all of which were Asian nations: Singapore at 569, Macao at 555, Hong Kong at 551, Taiwan at 531, and Japan at 527. China was not included in this ranking, since only four provinces participated.
In science, the United States scored at 502, above the OECD average of 489. The top five highest-scoring countries were Singapore at 551, Macao at 544, Estonia at 530, Japan at 529, and Finland at 522.
When analyzing the U.S. results over the years, it's clear that the scores have been stable over time—while not declining, there aren't any signs of improvement, either. In fact, there's been no detectable change in U.S. students' math scores since 2003 or science scores since 2006.
Economic Impact of Education
These low scores mean that U.S. students may not be as prepared to take high-paying computer and engineering jobs, which often go to foreign workers. While Silicon Valley is America's high-tech innovation center, one reason for its success is the cultural diversity of its foreign-born software engineers.
Many companies simply outsource their tech jobs overseas. The result, however, is the same: There are fewer high-paying jobs going to American citizens because they may not be qualified.
An economist from the Hoover Institution of Stanford University, Eric A. Hanushek, estimated that the U.S. economy would grow 4.5% in the next 20 years if our students’ math and science skills were as strong as the rest of the world's. However, this statement would likely come as a shock to many Americans who believe that our students' skills are already among the best in the world.
Perception vs. Reality
Despite the low scores dating back decades, some Americans see no problem with the state of U.S. education. In 2008, nearly half of those who participated in an Associated Press poll said that American students’ achievement test scores were the same as or better than those of children in other industrialized nations. However, 90% of them recognized that education helps economic growth.
The truth is that the U.S. ranks near the bottom in a survey of students’ math skills in 30 industrialized countries. Instead of knowing and confronting the facts, many Americans are in denial. In fact, the same survey showed that while one-third believed their schools were excellent, only one-sixth believed the same of any other schools.
One reason for this: Many states don't invest in education. The states that are poorest have lower education scores. This cycle creates structural inequality.
Impact on U.S. Competitiveness
This slippage in education, along with President Trump's trade policies, has hurt U.S. competitiveness.
The IMD World Competitiveness Center reports that the U.S. is ranked 10th in its 2020 Competitiveness Report. After ranking first in 2018, the U.S. fell to the third spot in 2019. The seven-point tumble to 10th place in 2020 represents the lowest the U.S. has ever been in the annual ranking system by far.