ISET Economist Blog

Math Education – an Engine of Economic Growth in the 21st Century
Friday, 23 November, 2012

Mathematical literacy has always been a key factor in improving a country’s productivity and competitiveness. Stanford University’s Eric Hanushek has shown that there is a positive relationship between students’ performance in mathematics tests and economic growth. This is not at all surprising. Proficiency in math implies a high level of cognitive skills among the labour force, in other words, a high quality of human capital, which leads to technological innovation and productivity gains.

Another more recent study by the OECD, “The High Cost of Low Educational Performance”, reports similar findings. In particular, its authors found that even relatively small improvements in the mathematical skills of a country’s labour force can have a large positive impact on a country’s long-run economic growth and well-being. According to the empirical results, an improvement of the math and science scores by 100 on the PISA scale leads to an increase in the annual real GDP growth rate by 1.74 percentage points. The OECD’s Program for International Student Assessment (PISA) is an international study that aims to evaluate education systems worldwide by testing the skills and knowledge of 15-year-old students in three separate areas: reading comprehension, mathematical literacy, and science. One of the appealing features of the PISA is that it provides a relatively objective measure of a nation’s educational achievements, thereby making the quality of educational systems comparable across countries. Georgia joined the PISA in 2010.


According to the PISA 2009+ (which covers 10 additional countries that were unable to participate in PISA 2009), in the mathematics section, Georgia is ranked 66 out of 75 countries surveyed. Although outperforming a few countries, such as Panama, Qatar, Tunisia, and Indonesia, Georgia lagged behind all other former Soviet Union countries except for Kyrgyzstan. Georgia’s position on the science section is even worse. It ranks 70 out of 75 participant countries.

These figures clearly indicate that severe problems exist in Georgia’s educational system. The causes might be poorly qualified teachers, a lack of time devoted to mathematics classes, or just students’ choices and the belief that math is not that important in their lives.

At the higher education level, the popularity of mathematics remains a big challenge. Many parents get attracted by such courses as International Relations, Finance, and Banking or Jurisprudence, and push their children who are about to go to university towards these specializations (see the ISET-Blog for more on the influence of parental will on their children’s education-related decisions). While such professions are obviously important in their own right, the Georgian labour market, without doubt, suffers from an excess supply of these so-called “prestigious” occupations.

Many graduates with degrees in these fields do not find jobs after graduation simply because there is no demand for their skills, which thus aggravates the problem of unemployment. In Georgia, this is highest amongst the youth (people in the 20-24 age group) exceeding 35% according to some counts. I would argue that if some of these people had graduated from the math department, they would have had a greater chance of getting hired. For example, consider two recent graduates with different backgrounds (say both from TSU), one with a bachelor’s degree in mathematics and the other with a degree in economics and business administration. If both were to apply for the same position (requiring some degree of analytical thinking) in a commercial bank I would bet that the former would have a greater advantage when the employer was making his decision. This is exactly what is happening in many Georgian commercial banks, where job applicants with math and other related backgrounds such as statistics, physics, or computer sciences, have significant advantages over other graduates. This is also true for other sectors which require analytical and problem-solving skills.

Since 2009 the former Georgian government began undertaking several important steps to make the exact and natural sciences more attractive for potential students, redefining the way the state grants are distributed among the different fields of studies. According to the new strategy only the 100% state grant, which pays 2250 laris per year, is available for students enrolled in so-called “popular” departments such as economics, business administration, and law. Whereas for those students admitted to the faculties of the exact and natural sciences (which also incorporates mathematics, programming, and physics) 30%, 50%, 70%, and 100% state grants are available. This has made these departments much more popular among potential students, as their chance of being granted a state scholarship is now higher than it is in those “popular” departments. However, as it is the quality of “educated people” that ultimately matters, rather than the number of diplomas printed, one also needs to make sure that the quality of technical education improves alongside these changes.

Another important step in this direction has been the decision of the former government to establish the Batumi Technological University which will focus on technology, media, and engineering disciplines. According to President Saakashvili's announcement, concerted efforts will be made to bring well-known professors from top American universities to Batumi.  It is crucial that the new government continues to support this idea so that the new university will be able to admit its first students in the nearest future.

Most importantly, more emphasis should be placed on mathematics and math-based subjects at the primary and secondary levels of education. However, any such efforts will also be vain if the quality of teachers is not improved through various training programs or even by increasing salaries to attract the brightest teachers.

Provided that the OECD study’s findings are generalizable to countries like Georgia (and there seems to be no reason why this should not be the case), the Georgian authorities should start implementing more “aggressive” reforms to improve the nation’s mathematical performance. Educational reforms are of course difficult to implement and, even if implemented quickly, the returns may take decades to come. However, this by no means should be used as an excuse not to invest in math education, as doing so would imply foregoing enormous gains for future generations.

The views and analysis in this article belong solely to the author(s) and do not necessarily reflect the views of the international School of Economics at TSU (ISET) or ISET Policty Institute.