Educational and economic returns to cognitive ability in low- and middle-income countries: A systematic review

World Dev. 2022 Jan;149:105668. doi: 10.1016/j.worlddev.2021.105668.

Abstract

There is growing interest to use early cognitive ability to predict schooling and employment outcomes in low- and middle-income countries (LMICs). Rather than using educational attainment and school enrollment as predictors of future economic growth or of improving an individual's earning potential, mounting evidence suggests that cognitive ability may be a better predictor. The relationship between cognitive ability, education, and employment are essential to predict future development in LMICs. We performed a systematic literature review and meta-analysis of the evidence regarding the relationship between cognitive ability and educational outcomes, and between cognitive ability and economic outcomes across LMICs. We searched peer-reviewed studies since 2000 that quantitatively measured these relationships. Based on an initial search of 3,766 records, we identified 14 studies, including 8 studies that examined the cognition-education link and 8 studies that assessed cognition-employment returns in LMICs. Identified studies showed that higher cognitive ability increased the probability of school enrollment, academic achievement, and educational attainment across LMICs. A meta-analysis of returns to wages from cognitive ability suggested that a standard deviation increase in cognitive test scores was associated with a 4.5% (95% CI 2.6%-9.6%) increase in wages. Investments into early cognitive development could play a critical role in improving educational and economic outcomes in LMICs. Further research should focus particularly in low-income countries with the least evidence, and examine the impact on education and economic outcomes by cognitive domains to provide more robust evidence for policy makers to take action.

Keywords: Cognition; Cognitive ability; Earnings; Educational attainment; Returns.