Studies of countries’ growth trajectories indicate that a key factor in managing the
transition from middle-income living standards to high-income ones has been human
capital formation. A fifty-country study by Hanushek and Woessmann (2008) found
that controlling for GDP per capita and levels of schooling in 1960, those countries
with higher skills experienced per capita income growth rates that averaged two
percentage points higher over the next forty years. They also found that skills as
measured by performance in international assessments played a role in sustaining
strong economic growth after controlling for differences on such acknowledged
determinants of growth as trade openness, security of property rights, fertility, and
geography.