"The United States' failure to educate its students leaves them unprepared to compete and threatens the country's ability to thrive in a global economy." Such was the dire warning recently issued by a task force sponsored by the Council on Foreign Relations. Chaired by former New York City schools chancellor Joel I. Klein and former U.S.…

Cross-country evidence on student achievement might be hampered by omitted country characteristics such as language or legal differences. This paper uses cross-state variation in Germany, whose sixteen states share the same language and legal system, but pursue different education policies. The same results found previously across countries hold…