Signals vs Causes: Education

In this excellent EconTalk podcast, EconLogger Bryan Caplan discusses his upcoming book on education. He closes with this:

…the private return [of education] is high is really a very bad argument for pouring more money on.

Now, the other point, as we were saying, the return that you should be looking at in terms of this argument of not being able to borrow against your future earnings–what you are looking at is return for the marginal people who are just on the edge of going or not going. And as we’ve seen, the return for those people is actually… quite mediocre. And then finally if you adjust for ability and everything else, really I would say that once you appreciate signaling you realize that, so we have subsidized education way past the point of [?] returns. So by my calculations, actually, the social return to education is now quite negative.

And it would be a much better policy to drastically scale it back, so rather than encouraging more people to go, I think it’s better to discourage them from going or at least to encourage them less. So in fact–so, the biggest policy implication that’s going to come out of my book is we just have way too much education. I call this the white elephant in the room. There are way too many people going to school, maybe not from their own selfish point of view, but certainly from a social point of view to go and pour more money on this really is just throwing gasoline on the fire. And we need to do less of it.

I agree. Caplan’s argument is that we college education isn’t the cause of higher income, rather it’s just become the customary path that people with above average ambition and ability take and along the way we’ve mistaken it for the cause of that higher income.

It’s similar to the mistake ‘we’ made with housing. We thought owning a house made people responsible, so we made it easier to irresponsible people to own homes. We learned the hard way that owning a home was a marker of a responsible person, not a cause.

Now, we’re learning the same about college education as many kids graduate and find themselves deep in student loan debt and no higher income job to pay it off.

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Good point on inequality and education

Here’s Mark Perry, of Carpe Diem, regarding John Goodman’s post: If you really care about income inequality, you need only focus on one thing: the inequality of educational opportunity.

As Goodman puts it:

Poor kids are almost always enrolled in bad schools. Rich kids are almost always in good schools.

As they point out, the left seems more concerned with protecting teachers unions than providing quality education.

But, I think it’s worth pointing out that the blame of bad schools doesn’t fall only on the administrators and teachers, though they are partly to blame.

As one commenter on Mark Perry’s blog post pointed out, what do you think would happen if you switched the kids in the good schools with the kids in the bad schools? Do you think the reputation of the schools would remain intact? No.

I think it’s worth considering why that is. It’s not because of inequality. It’s because different people value education differently, just like any other product or service.

Even in a country that provides publicly for education, people still get to make choices based on a number of factors. Those who value education more tend to choose to live in areas where their neighbors value it as well. Those who don’t value education as much are left in the bad schools.

Charters a good way to give more choice to the people who do value education, but happen to be stuck in the areas where their neighbors don’t value it as much.

But, charters won’t convince those who don’t value it, to value it more.

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Taleb on education

I’m currently reading Nassim Taleb’s Antifragility: Things That Gain From Disorder. I’m enjoying it and recommend it. There is much to discuss.

I ran into this today:

Authors theorize about some ancestry of my ideas, as if people read books then developed ideas, not wondering whether perhaps it is the other way around; people look for books that support their mental program.

Agreed. That sets up a section about education that ties in with a recent discussion about education on this blog. He introduces what he calls epiphenomenom, which is

…mistaking the merely associative for the causal; that is, if rich countries are educated, immediately inferring that education makes a country rich, without even checking.

He refers to work from Lant Pritchett (recent EconTalk guest) and Alison Wolf that supports that education is a marker of a wealthy country, not necessarily a cause (wealthy countries can afford education). I liked this story:

I once ran into Alison Wolf at a party (parties are great for optionality). As I got her to explain to other people her evidence about the lack of effectiveness of funding formal education, one person got frustrated with our skepticism. Wolf’s answer to him was “real education is this,” pointing at the room full of people chatting.

Taleb is clear in that he is not saying that education and knowledge are not important to an individual, it’s just oversold as a cause of a nation’s wealth. I also agree with this (emphasis mine):

…note that I am not saying that universities do not generate knowledge at all or do not help growth (outside, of course, of most standard economics and other superstitions that set us back); all I am saying is that their role is overly hyped-up and that their members seem to exploit some of our gullibility in establishing wrong causal links, mostly superficial expressions.

That puts into words something I’ve often thought about credentials. In so many areas credentials play on our gullibility and the folks with the credentials seem okay with that, which is a reason I have an inherent distrust for someone who rests on their credentials. You don’t often hear people qualify their credential and caution you to not put that much weight into it. They usually appeal to it.

Enough with the education olympics

Wendy Kopp, CEO of Teach for All, suggests in the Wall Street Journal that we call off the education arms race.

I agree. She’s referring to viewing education system effectiveness, as measured by standardized test scores across countries as a competition.

We should be happy that other countries are doing so well. Isn’t that good for us to live in a more educated world? Perhaps we might even be able to learn something from them, if we care to.

Or maybe we’ll just discover that they’re really good test takers.

The Wall Street Journal also offers this piece today about the education arms race, which says:

Since 1998, the Program for International Student Assessment, or Pisa, has ranked 15-year-old kids around the world on common reading, math and science tests. The U.S. brings up the middle—again—among 65 education systems that make up fourth-fifths of the global economy.

I have a few other thoughts to consider.

How well do PISA scores on reading, math and science correlate with prosperity now and in the future? Perhaps there’s a threshold that is good enough and, for whatever reason, the other countries are, to their own detriment, are far surpassing that.

For years I’ve heard that U.S. doesn’t have government health care and it results in sub par medical care performance vs. countries that do.

We do have government education, yet that still seems to result in sub par performance. So, maybe whether the government provides something isn’t the key to success. Maybe there are other factors.

Though, I must say that I do see as one bad outcome of our education system our inability to be able to put such results in proper perspective.

Bad Teacher

I can’t believe the incredible luck we’ve been having here in discussing a topic and then hearing that topic discussed elsewhere.

I post about Nations Going Into Retirement, then almost immediately hear Jagdish Bhagwati saying something similar on EconTalk about India.

I post about the American Dream, ideals vs. materialism, and then hear a pertinent quote about that on a Harvard Business Review Ideacast.

I posted about how Teachers Matter. This week’s EconTalk has guest, Eric Hanushek, discussing education. In his research, he has convinced himself that teachers matter more than most things in education.

Further, commentator, Wally, brought up the topic of Finland’s successful education in the comments of my Teachers Matter post. Hanushek discusses that very topic in the podcast. I was skeptical that the story Wally linked to provided all the answers. Hanushek is skeptical that Finland’s success can be explained with any small number of factors. But, he does think teachers matter there, too. He said that he’s not sure why, but teaching is a revered profession in Finland so it naturally attracts good teachers. He also believes local choice — among administrators and parents — contributes, but still thinks teachers matter most there.

Hanushek says that a key reason U.S. education lags other countries, as measured by test results, is that we don’t have a good mechanism for eliminating the bad teachers, whereas education systems in other countries are more open to that. He’s not even talking about making every teacher great. Just getting rid of the bad ones will help. Even when it’s obvious, when most parents at the school and most teachers can point to the two or three bad teachers, nothing can be done.

Teachers matter

Here’s an interesting write-up of a high school turnaround.

Decades ago, the school was slivered off from a suburban school district by the neighboring urban school district so it could meet its racial diversity targets. That district, along with this school, when down hill and only a third of students were graduating.

Fast forward to 2007 and the residents of this area voted to move back to the suburban school district.

Now, just five years later, 90 percent graduate from that high school.

The surprising bit for me: The new school district only hired 12 people from the previous district to fill the 400 positions to staff the schools that transitioned.

That surprised me because my mental model had been that the teachers are less important in the school failure equation than student and parent expectations. Perhaps I need to rethink that.

 

Loosely connected cost-benefit analysis?

To my previous post, I can imagine that some people would make the case that sending disruptive kids home from school will increase crime rates, so better to keep them in school.

This is one example of a concept I’ve been thinking about, but don’t have a good name for yet. For the lack of a better name, I’d call it ‘loosely connected cost-benefit analysis’.

This happens when we ascribe benefits, like lower crime rates, to schools because they keep criminals preoccupied. There may be some truth to that, but there are also problems with this reasoning.

First, keeping criminals preoccupied isn’t the purpose of education. Providing an education to students is. The folks who support this second order benefit of using schools to keep criminals off the streets don’t consider the cost that imposes on the school’s primary goal of educating students.

Second, it isn’t fair for the students and parents who want their kids to get an education.

Third, it assumes there are no better ways of dealing with criminals. Isn’t it the job of parents and police to limit criminal activity? I don’t think we gain when we try to offload that responsibility on to schools.

If you think I’m being too narrow-minded and should be more open to all the holistic benefits of schools, I encourage you to consider the following example.

Community centers that promote recreational sports leagues are also a way to keep criminals preoccupied. Though I can’t imagine many people would argue that community centers should be forced to let misbehaving people continue to participate.

I imagine there would be large agreement that community centers have the right and duty to expel dangerous people to keep other members safe and the programs productive. If you agree with that, then why would you think that schools should be forced to keep disruptive students?

Most people could easily predict what would happen if community centers were forced to keep misbehaving people. Community centers would become dangerous, which would chase away well-behaved members and cause eventual failure. The blind spot created when changing ‘community centers’ to ‘schools’ amazes me.

 

Sometimes free is too expensive

This post from a teacher on Instapundit reminded me of my Education: It Doesn’t Need to be One-Size-Fits-All post from 2010.

This part is a good example of what I meant that the preferences of the experts who set K-12 standards are not necessarily the preferences of everyone:

The only reason that the 60% of the kids who bothered to show up daily even came to school was for the 2 free meals and the climate control. We needed a force of 15 security people to keep the kids IN CLASS. They had no desire to learn. They did not CARE if they failed. I never, ever had kids who started at my school as 9th graders and had enough credits to be juniors by their third year. Most didn’t even have enough credits to be sophomores. And this was when summer school was free!

Granted…this is summer school.

There are some thought-provoking nuggets embedded in here. Why didn’t they care if they failed? Why didn’t they have a desire to learn? I think it’s because they believe they can get by without learning what’s taught in school. They don’t value the college prep value prop like the “experts” who designed the curriculum and most of the U.S. that has been brainwashed that a college prep education is the only way to go.

Something is broke if 15 security people are needed to keep the kids in the classroom. The disruptive kids need to be sent home. Let the parents figure out what to do with them. But, the incentives are against that. If the school sends those kids home, they won’t get money from the state. My guess is that the school district comes out ahead financially by paying for security and collecting the money for attendance rather than sending half the kids home.