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Socio-economic cost-benefit analysis (CBA) is a powerful framework that can be very useful to governments making investment decisions. However the standard application of transport CBA has room for improvement. This paper describes efforts to improve the quality of transport CBA and its applicability to decision making. Three areas are addressed in detail: strategies for making the most of CBA, valuing and forecasting reliability benefits, and capturing wider economic impacts. The report is based on the papers and discussions at a Roundtable meeting of 30 experts held in Paris in November 2015. Roundtable participants took the view that a multi-faceted approach is needed to address the shortfalls; CBA theory and practice need to be gradually expanded to incorporate more impacts in the rigorous valuation and forecasting framework; and CBA results need to be more effectively linked to other criteria in the broader decision-making framework, including by bringing in a more diverse evidence base.

This paper evaluates the link between educational policies and i) student performance and ii) macroeconomic measures of productivity. The analysis has two stages. First, using the 2015 and 2018 PISA databases, it quantifies the relationship between student test scores and the characteristics of students taking the tests, their school environment and national educational systems. Second, assuming that these relationships reflect the effect of different characteristics/policies on student test performance, the second stage converts the latter into an estimated effect on macroeconomic measures of productivity using a new measure of human capital as an intermediary variable. This new measure of human capital, devised in previous OECD work, combines student test scores and mean years of schooling with estimated elasticities that suggest the former is more important. The analysis shows a positive association between spending on education and student test scores, but only for levels of student expenditure below the OECD median, suggesting scope for currently low-spending countries to raise student performance with potential gains to long-run productivity. Boosting participation in early childhood education as well as improving teacher quality is found to generate large aggregate productivity gains. There are significant, but smaller, macroeconomic gains for many countries from limiting grade repetition and ability grouping across all subjects as well as increasing the accountability of schools. Finally, the results provide evidence for income inequality having a major influence on productivity through a human capital channel.

This paper uses a new measure of human capital, which distinguishes both quality and quantity components, to estimate the long-term effect of the COVID-19-related school closures on aggregate productivity through the human capital channel. Productivity losses build up over time and are estimated to range between 0.4% and 2.1% after 45 years, for 12 weeks and 2 years of school closure, respectively. These results appear to be broadly consistent with earlier findings in the literature. Two opposing effects might influence these estimates. Online teaching would lower economic costs while learning losses in tertiary education (not considered here) would inflate them. Policies aimed at improving the quality of education and adult training will be needed to offset or, at least, alleviate the impact of the pandemic on human capital.