Immigration, School System and Human Capital

Abstract

We estimate the impact of a range of macro level variables, as well as the countries' school system specifics on students' performance in PISA international test in mathematics, an indicator that is broadly accepted as a measure of a country's human capital stock. We estimate a panel of 51 economies from the OECD database for 1999–2011. Our results suggest that, after controlling for the level of GDP per capita, certain social and demographic indicators appear to have a significant positive effect on human capital formation at school. They include the share of urban population, low level of income inequality (measured in terms of the Gini index), low share of immigrants in total population and the prevalence of skill-based immigration. Moreover, school systems that carry out external exams and have no early tracking system show better results in PISA. The latter effect is significantly stronger for countries where skill-based immigration flow is subdued by alternative immigration channels such as humanitarian-based, kinship-based, etc. This implies that tracking might impede integration of students from immigrant families with lower social status. Our results are consistent with a number of studies where the impact of the school system features and macroeconomic variables on education quality is considered.