PISA: What Makes the Difference?Explaining the Gap in PISA Test Scores Between Finland and Germany

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Conclusion

The decomposition analysis showed that the poor performance of German students compared to Finnish students is not due to a less favorable student background, except for the bottom of the score distribution. German students have on average more favorable characteristics but experience much lower returns to these characteristics in terms of test scores than Finnish students. The background of German students changes much faster along the score distribution, which explains the higher inequality in Germany. The institutional setting seems to be more favorable in Germany while Finland is endowed with slightly more resources. The characteristics of students are transformed into higher test scores in Germany than in Finland once their effect on school choice is neglected. Instead, resources are used more efficiently in Finland, where teachers are more highly educated and a lower education of teachers has no negative effect on student performance. A large part of the overall score gap between the countries is due to unobservable factors. The results also imply that streaming in Germany penalizes students in lower school types and leads to a greater inequality of educational achievement. It remains unclear, however, if this can be attributed to the effect of school types per se or student background and innate ability that determine the allocation process of students into school types. Overall, the variation in test scores can be explained much better by the observable characteristics in Germany than in Finland.
In order to improve the performance of students in Germany, especially the educational achievement of students in the lower part of the test score distribution has to be promoted. These students suffer from a highly disadvantaged student background, whose negative impact upon performance might be magnified by the early streaming in the German schooling system at the age of ten. They are not given the chance to compensate for their background before they are divided into different school types. The measured resources, especially the education of teachers, must be employed more efficiently in order to close the gap to leading countries in student performance. There is no evidence for a beneficial effect of lower student teacher ratios but a higher education of teachers seems to benefit students in Germany.
Further research is needed on the effects of school types in educational production functions, which should try to isolate the ‘true’ effect of school type on educational achievement. Only then the determinants of educational achievement can be precisely estimated for schooling systems that massively use streaming.