Knowledge, Skills, and the Global Balance of Power: What International Standardized Achievement Tests Tell Us about National Economic Potential and Prospects

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By Nicholas Eberstadt

AEI Foreign and Defense Policy Working Paper Series

May 21, 2025

This study is part of a project that seeks to take strategic demography “beyond the headcount approach,” using the new information the data explosion has revealed about the human potential in national populations, with a particular focus on the strategic balance between the United States and China. In this paper we examine “knowledge capital,” the economically productive knowledge and skills of national populations: how such potential differs between nations; how it affects levels of national productivity; and the determinants of that potential internationally. We explore these questions through statistical analysis of global data on academic achievement (which proxies knowledge capital), drawing also on other authoritative datasets on worldwide social and economic conditions.

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