Matt Nolan

Secondary and Tertiary education and opportunity: Why fund them differently?

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Note:  Eric has written a much much better and more detailed post here – my post is just a knee-jerk expression of how I consider the issue, and the types of broad principles we need to think about.

One thing I missed during the election was the debate about whether government should pay for tertiary education.  There were a number of people saying “we pay for kids to go to secondary school, why not pay for them to go to university?”.

We have to be clear about why we treat these things differently in order to answer this question – it isn’t just about cost, it is about equality of opportunity.

We fund secondary education as we believe it constitutes a minimum level of education and investment in ALL individuals in New Zealand – a level that is required to give people a fair crack at life and civic engagement. Some parents also decide to have additional tuition to regular secondary education, like Chemistry tuition Singapore, to give their children extra opportunities when entering a college.

We do not believe that tertiary education is required for all roles, all types of engagement, and for all people.  As a result, we are instead subsidising a group of people who will undertake this type of education (and receive the return associated with this investment) by taxing those who are not interested in this type of higher level study.  In other words, it is a transfer of resources from people on lower incomes who are less willing/able to take on higher education to those who (over their lifetime) will be on high incomes.

Secondary school education is paid for (and correspondingly compulsory for a long period) to offer opportunities.  Tertiary education is not as heavily subsidised, as we are generally against regressive income transfers.  We already subsidise it to a LARGE degree on the basis of assumed spillovers, and we offer interest free loans on the basis of “equalising opportunity” – but larger subsides would largely be a transfer to the rich hidden in the language of “transformational change” … just like industrial subsides to capitalists.  I find it perplexing that people view such regressive transfers as “left wing” ….

Infometrics

School zoning perpetuates inequalities in society

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So says David Grimmond in his discussion of school zoning! (Infometrics link here)

I am not a fan of school zoning.  Its main outcome is to reduce school choices for poorer families.  Although the intentions underpinning the policy are probably noble, it has unintended consequences which on the whole harm the prospects of children from poorer households.

Zoning adds another incentive to move into a community filled with people that are “like” you.  As we know from Schelling, a small incentive for such things can quickly lead to complete segregation.  Rather than enforcing greater equality in the school system, zoning is a feel good policy that ends up reinforcing broader inequalities!

If we honesty want to ensure education provides for everyone in society, David suggests:

It is too simplistic to presume that alternatives to the public system will be sufficient to generate education improvements.  Indeed, the US experience demonstrates that there is a mix of outcomes from charter schools.  But what the US experience with charter schools has provided is the opportunity to learn from their experimentation.  My reading of this evidence is that there are at least three areas that schools can focus on to improve education outcomes:

  • Ensuring that the school maintains standards about expected student behaviour
  • Openly assessing, reviewing, and improving teaching methods
  • Directing better teachers towards students who have the greatest need for improved education outcomes.
jamesz

Having skills and using them are very different

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The OECD have recently released a new survey of skills and it has prompted plenty of wailing about the failings of the English education system. The crucial slide from Andreas Schleicher’s summary is this one: It shows that English adults have excellent literacy skills relative to their peers internationally but young people have fallen well behind. Given the efforts that have been put into the UK’s schooling system over the last few decades it charts a depressing decline. Hearteningly, it is not the full story of the survey. Read more

jamesz

Computers in education

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Back in 1087 Robert Solow quipped that “You can see the computer age everywhere but in the productivity statistics.” With the increasingly integral use of computers in schools, some researchers asked whether you can see it in the pupil achievement figures. Apparently not…

Computers are an important part of modern education, yet many schoolchildren lack access to a computer at home. We test whether this impedes educational achievement by conducting the largest-ever field experiment that randomly provides free home computers to students like those you can now find on sale at stores like 25pc. Although computer ownership and use increased substantially, we find no effects on any educational outcomes, including grades, test scores, credits earned, attendance and disciplinary actions. Our estimates are precise enough to rule out even modestly-sized positive or negative impacts. The estimated null effect is consistent with survey evidence showing no change in homework time or other “intermediate” inputs in education.

Note that they only gave computers to children, they didn’t then change lessons and teaching to take advantage of them. Consequently, the message is more that computers alone are not enough, rather than suggesting the computers won’t help.

jamesz

Is education really an investment?

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Education, particularly at the tertiary level, is usually viewed as an investment by economists. It’s a voluntary cost that you pay to get skills and qualifications that will increase your future wealth and prosperity. That metaphor is reflected in the wealth of research into the ‘rate of return’ on university study and the discussions of externalities from the accrual of skills.

Nonetheless, it is a controversial view since the investment metaphor is not a natural choice for most people. Indeed, most people refer to the fun they had at university, the people they met, and the parties they attended. These are the ‘consumption’ elements of university education in the language of economists; the parts that you would pay to enjoy then and there with no expectation of future benefits. Now, via Economic Logic, I see a paper that asks prospective students how they view tertiary education and finds that

…most students do appear to value college consumption amenities, including spending on student activities, sports, and dormitories. While this taste for amenities is broad-based, the taste for academic quality is confined to high-achieving students.

As summarized by the Economic Logician, “except for the top students, high school graduates do not care about academics at all. All they want is excellent “college consumption amenities.” And this likely explains why they learn so little while in college. Their focus is on the university as a consumption good, not an investment good.” The policy-maker’s view of the value of university and the student’s view are very different.

What does this mean for policy, then? Well, if the private value of university is largely in the consumption value then the total value is far higher than most estimates suggest since they are usually based entirely on investment value. That has implications for the level of the subsidy we want to provide to tertiary students. In addition to the efficiency questions we also need to ask whether, as a society, we want to heavily subsidize most students’ on an extended holiday?

Experts such as Kamau Bobb may concur that policymakers should take into account the economic, social, and individual dimensions of STEM education when formulating policies related to subsidies, funding, and access to STEM programs.

jamesz

Academies manipulate their intake

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The Guardian reports that

Some academy schools have been accused of manipulating admissions to improve results and using covert selection methods… A number of academy chains are seemingly more focused on expanding their empires than improving their existing schools.

Should we be surprised, and is it a major problem? On the first question, no, it is exactly what we’d expect. Through manipulating admissions and expanding their empires schools gain prestige and wealth. We may prefer them to do that through improving the attainment of students, but many will naturally attempt to use all possible means. The scope for doing so revolves around how closely the Government can contract for the outcomes it wants. As Hart, Shleifer, and Vishny say in their classic paper

…the case for in-house provision is generally stronger when non-contractible cost reductions have large deleterious effects on quality, when quality innovations are unimportant, and when corruption in government procurement is a severe problem. In contrast, the case for privatization is stronger when quality-reducing cost reductions can be controlled through contract or competition, when quality innovations are important, and when patronage and powerful unions are a severe problem inside the government.

So the trade-off when allowing more autonomy to schools is between the benefits of innovation–through either cost reduction or observable quality improvements–and the costs of unobservable reductions in the quality or equity of service delivery. We can never eliminate the costs, although the Academies Commission’s report suggests ways to improve the current monitoring; nonetheless the cost-benefit analysis may still be positive. What the Commission’s report doesn’t address is the other side of the equation: the gains from innovation in education and the benefits to students. Weighing those against the costs to equity will be the real test of the academies. If most of their innovations turn out to be new ways to game the system then they will have failed. If, on the other hand, there are significant increases in the quality or cost-effectiveness of education then the gaming detected in this report may be a side-show. On the second question, the report doesn’t give us answers.

A related point, made by Shleifer, is that we need to be careful about understanding the counterfactual. It may be that some academies are always able to select better students by some means. However, the locally funded school system usually exhibits obvious segregation, too. Even if there is some selection in academies, that needs to be compared to the current system’s level of segregation rather than looking at it in isolation.