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How Cognitive Abilities Lead to Economic Growth

Most of us understand that knowledge and skills are important for economic development. What we may not understand is how this is measured across varying countries to determine if such growth is based in this human capital enhancement. A study by Hanushek & Woessmann (2012) found that cognitive skills play a causal relationship in economic growth. Their focus was based on averages of math and science scores from 1964-2003 in different countries.  There are two primary ways to measure cognitive skills on a macro-economic level. Time in education focuses on the amount of years people went to school while cognitive skills focus on the actual skills that people learn. The later measurements are more difficult to obtain as each country measures these concepts differently and measurements cannot be easily compared.   Skill is not simply an additive process but also a multiplier process. Basic skills lead to higher levels of skill development later. In other words, “ skill be