Wednesday, April 4, 2007

"Investing" in Education

In my rantings on the provincial budget I said I’d talk about the “investments” in health care and education. I’m going to tackle education first. I’ll get to health care later this week and then I’ll attempt the state and future of the US economy (as requested).

Education has historically been one of the best investments a region could make. The return has been high and the risk low. This is starting to change for lower levels of education. There are a number of ways this can be explained. The most generous explanation to the public education system is to argue that as basic education becomes more available and open to people of all backgrounds, the skills associated with education become less scarce and thus can demand less of a return. This likely explains only a small portion of what we’re observing.

The other possibility is much more damning to the public education system. Even though the number of real dollars spent on public education has been increasing over time, the quality of education received by students has been falling. This is in fact a significant portion of the problem. The public education system in New Brunswick has lower expenditures per student than some other provinces but greater than others. Spending more may not be the only solution. Getting better value for the money we do spend might be a better way to go.

Consider the basic data. Approximately 86% of the population of New Brunswick has education of grade 9 or better. (gnb link) That’s a pretty good educational attainment. Less than 14% of the age 15+ population hasn’t finished the equivalent of junior high school. Less than 2% of the 15 to 24 age cohort has not completed grade 9. The New Brunswick school system is doing a good job of making sure people stay in school. This would tend to support the argument I first made about the return to high school education decreasing as more people achieve that level of education. If only it were the case.

The scary part happens when we consider the provincial literacy rates. Approximately 50% of the total population would have a hard time following written instructions. An even greater portion would have a hard time reading a newspaper article. People in this situation are described as functionally illiterate. 37% of the population aged 16 to 25 can’t follow written instructions remember less than 2% of this age group didn't finish grade 9. This is clear evidence of a problem. Combined with the PISA scores it’s evidence of a huge problem. The current system doesn’t work.

If we’re going to “invest” in education we should take steps to make sure we aren’t just throwing money away. It’s time to take a hard look at how education dollars are spent. We’ve got more and more teachers who are experts in teaching and fewer and fewer in who are experts in any subject matter. We’ve got more and more people working for the education system outside the classroom. I suspect it might be time to fire a number of teachers and a whole lot of administrators. It’s for time education spending to provide education not just jobs.


Anonymous said...

here at the centre of the universe, otherwise known as the "harvard of the north", when i walk around and talk to people most and this is quite a large, number of students (students in non-commerce/business and non-science - physics, chemistry, and biology)plan to take that degree they got and go into teaching. Since OISE - the teaching college of this institution is extremely difficult to get into most students go to Ireland, Scotland, Australia where the entrance requirements are not that high (grade wise that is) and offer more job opportunities in those locations. Here I am asking myself that we have all these people that want to go into teaching, do all these people like/love teaching? Definitely not. It's a guaranteed job, with guaranteed income, and guaranteed benefits no matter what the quality is.
And this brings me to what I have been doing here. Although I have become much more socially conscious, I have also become much more of a market believer. These institutions that we are in are government made monopolies and as such there is no incentive at all for them to service their customers - the students. Right now all students are just warm bodies the more there are of them the more funding is received by the institution. I have been agressively been a local dissenter here at the university arguing for the dismantling of the "system" because (1) does not work for the students (2) funding irregularities between programs - some are deregulated others not (3) service quality. Right now on all three factors the grade would be an F.

This brings me to a lively conversation we had a while back (although 99% of the time I think we both agreed) about public-private partnerships. Although at first they look nice with lofty goals, feel right, and seems smart, they are failures. If 1/100 work, that is a failing grade and big waste of taxpayers money. I will say this again, there is no doubt in my mind the day of universality is coming to an end and the faster the better. This does not mean that as a result the status quo should prevail. If and when the time comes, governments must be fiscally proactive to make sure tax incentives and others are in place that would make such a system work - (here's the controversial part) like in the US. I can't believe that California is on this holy grail mission - can the governor spell BANKRUPTCY.
To close: "Investing" in Education is a great idea if done on a targeted basis and that's the key. Right now, resources are thinly applied across the board and quite frankly it doesn't work.

economistatlarge said...

I totally agree the institutions need to change. But I think we're quite a ways apart on how. Private isn't necessarily the answer for university education. Look at the crap that's coming out of Havard. Grades inflation, cheating, purchased degrees, etc. Not exactly a solution to the problem.

I see the problem in university education a little differently than you do - different views from where we sit. The student is not a client. The student is not a consumer. University education is not a service. That's totally the wrong model. That's the model that community colleges in the maritimes have been using for the last 20 years. And what's the average value of a degree from NBCC - about $2,000 a year more than high school. The service model doesn't work. This is not Wendy's. Degrees are not made to order. (Sorry, I got off on a rant)

Education is an investment made by the student not the faculty. I can't teach you anything - but I can help you learn. I'm not supposed to make you happy now. I'm supposed to give you the skills to make yourself happy in 20 years. The problem with a lot of universities now is that they are too worried about making students feel good and not enough worried about making sure students are required to learn before they leave.

We do agree on targetted education. Absolutely the key. The problem is who gets to choose the target? Students in general have generally demonstrated they can't choose well even in private schools - how many history students does our society need? How many economists? How many sociologists? Students have always over populated certain disciplines and under populated others. Should government choose? That couldn't be any better. Business? Yikes, they don't even have a clue what skills they're really looking for. I'll write a little bit more tonight on how I'd like the university system to work. Never happen, but I can dream right?

Anonymous said...

but i would leave the choice to the individual. being a believer in individual rights, if a "system" does not know best, i would argue that i would defer to the individual. the key here is in taking responsibility (something i have learned the hard way BUT i have learned and that makes me way ahead of others. the school my kids go to i "argued" with the teacher that the problem is not enough people failing and that they should. too much going on in making little ones happy but there are methods in doing that and making sure the "little buggers" learn.

with university, students should do things that they love to do, that they have an absolute passion about. money is arguably everywhere. you can make it anyhow and anywhere but some make it because they love what they do, while a lot of people make it miserably and that even making good money doesn't make them happy (we'll leave out what happy can be defined as).

but dr.j, degrees are made-to-order to a large degree. here and there, you go into a program and there is a certain path to follow, that's made-to-order. clearly, what's important is that the path is continuously updated and made more effective and efficient (don't worry rants, i love them, and we need them...too much follow the leader syndrome is going on anyway).

but in all honesty, i feel like a nobody here...well i am respected by my profs and they help out a lot (i have been very lucky to have good ones)and that to me is very important for current and future reasons, however, i do agree from the positions we are at we can definitely have different outlooks, but education is a service, society has said that it is a public service. i think my point was to emphasis that public or private, having either one does not take away the fact that both must work on making themselves effective and efficient. we can debate how and where to do so, but they must be continuously monitored for performance. i am leaning towards the model that says that the market is the best but it is also the most unpredictable (and therefore allows for inefficiency to creep in) but without a model that allows for feedback that is taken seriously and followed upon...the status quo continues.

the college system works....definitely not everyone should be in university...we have too many people trying to be CEO's. some professions shouldn't be in a university setting. there's definitely a mismatch occurring.

but with the rest, i must admit grudgingly i concur. for sure, the prof is not going to do my work, i have to put in some effort...some people a lot, while others they don't care because of their financial circumstances (that is, they're rich and so who cares...and this happens a lot here!). don't even get me started with financial can "the rich" even have access to such a system is beyond me. you're definitely right about one more thing too: in the real world, why is it that most of we're taught is even taken seriously, what i mean is that we learn theory but theory doesn't cut it out there. there's a mismatch that many, including me, are not prepared to deal with effectively.

but i have to ask to one more time: public education is a public service and it to make it better i believe you have to incorporate a service model in there somewhere. the current model just like health care does not work, is not going to work (no matter how much money you spend, and is on a course of self-destructing. anything that just asks for more money at the end of the day is broken, should be thrown, and a new perspective on things be applied. i am getting to ask the question WHY NOT a lot...why not do this and do that...and to hell with some the bad...we can work on that...we need take more risks something that is difficult in a risk adverse country like canada. and i realize that a lot of it has to do with politiking.

lately, an interesting project i am working on myself is the specialization vs. generalization debate (jack of all trades). which is best or better (i never like absolute terms like best...something i learned from you on economics - ie: it depends). it's interesting that this debate cuts across so many things.
another pet project i am working on is the relevancy of central bank reserves in a flexible exhange rate environment. is it needed? can't those resouces be put to better use. when the real issue is about credibility, can money buy it?

anyway, can't wait for your response.

Question: you coming by my way anytime soon?

Anonymous said...

i forgot: with harvard - what a mess - one can argue that is not the delivery model that is at fault but the lack of accountability and the lack of taking action. both those factors are present in the current model in canada too.

but then again wasn't harvard "led" buy sumners? i think so, so case closed (you get my point).

what's your take with ricardian equivalence? i getting to agree with it but they're sure is a whole of expectations that go into it, and the whole thing depends on whether people are "rational" or not.

i'm tending to go along with rational expectations. the way we were taught here was not so much whether people had perfect information (no) but how would people react to certain circumstances - the behaviourial aspects. for instance, how would a person "really" react to a recession. i think we can argue that they would tend to be more conservative and cut-back on expenditures and save more. these are the rational things people would do, unfortunately, they too make things worse, and this is where government steps in for better or for worse.

anyway i just wanted to add this earlier on.

oh, i think you would find this interesting: a lot of people here are contrarian when it comes to government and the economy. i think that is the wrong approach. i take government as a given. it's going to be here whether or not you like it (that's totally irrelevant). the question is where should gov't be and how much. the targeted approach. i think we both agreed with that and at the time that was one reason why you liked clinton. i'm getting to like him too now that i see how much of a mess you know who has incurred. unfortunately, health care is no go in the US.

one more thing: i'm getting to like minority governments. opinion please.

Anonymous said...

oh more tag:

if we consider (and I do) that education is a right not a priviledge, that means that access to education certainly must be made to all those who "qualify" - that's the qualification or hitch- certainly even if it is a right, we all know rights have limitations. for instance, freedom of speech too has limitations. but the point here is that even though all those who qualify should certainly have access to education, how that access is paid or charged is no guarantee. i hope you see where i'm taking this.

also, the way tuition is charged is absolutely out of whack. for instance, here at UTM: 11,500 students - about 2500 in commerce that pay around 11,000 dollars, in arts about 7,000 students paying around 5,000 dollars, while the remainder are in sceince paying the same 5,000 dollars.

if we argue that those whose potential are greater monetarily should be charged more, than commerce is paying more, BUT so should those in science. then again, there is no guarantee, eduaction increases your probability but doesn't guarantee you with anything. and personally, those arts students should be paying a lot more since we in commerce do not use more services than they do, so other than the poor excuse of a reason that the university uses, there is no justification for the "discrimination" in tuition charges. not everyone in commerce gets paid well or has a better job than those in english who go into teaching (because really who cares about all those english students - what remarkable thing are they going to tell me that google can't)and land that plump teaching job that we taxpapyers pay. wow, what a full circle.

anyway, this a great topic!