The Education Shibboleth

http://www.economist.com/finance/displayStory.cfm?story_id=1165373

Economics focus

The education shibboleth

Jun 6th 2002
From The Economist print edition

Extra years of schooling and wider access to university are everywhere supposed to be good for growth. Think again

ONE of the bravest, most interesting and most valuable books about economic policy to have appeared of late has just been published—and it was written by a non-economist. Alison Wolf is a professor of education at the University of London. Few academics with a position such as that would choose to write a book questioning what is today probably the most cherished myth of economic policymakers all over the world: the idea that more education is the key to economic success. Yet this is the daring mission which “Does Education Matter?” takes on. The book is chiefly concerned with Britain, whose prime minister, Tony Blair, declared his three highest priorities in government to be “education, education, education”. The arguments and the findings are of much wider relevance, and of pressing importance too.

So far as individuals are concerned, the evidence reviewed in the book shows, as you would expect, that education—“having the right qualifications, in the right subjects, from the right institutions”—matters. Indeed, it matters more than ever before. Those who leave school early or without qualifications are tagged, as it were, for low incomes, with a probability that is high and rising. Increasingly, those who fail to get a degree, or in some cases a degree from a good university, are sorted in a similarly brutal way. In other words, the private returns to education are high. But another question also needs to be answered, especially in countries with education systems (up to and including the universities) that are financed by the state: namely, what are the returns for society as a whole?

The book shows that they can be a lot lower than you might think. In particular, more education does not necessarily mean more growth, as most politicians (and economists) unthinkingly suppose.

The doubts do not arise so much over primary and secondary education. Modern societies depend on high levels of literacy and basic skills in mathematics. If students leave primary and secondary schools without them, that is a public burden as well as a private one. At the top, modern societies also need excellent universities producing substantial but not vast numbers of graduates equipped to be researchers and practitioners in medicine, engineering and the sciences. More generally, education does (or can) contribute to an individual's human capital, which makes people more productive. And if a society's individuals are more productive, you might suppose, the society itself is more productive.

So what is the problem? If all this is true, how can more education fail to make a country more prosperous? A first crucial point is that education is a “positional good”: that is, getting yourself tagged for high wages is not just about being educated, it is also about being better educated than the next man. To some extent, education is a race: if everybody runs faster, that may be good in itself, but it does not mean that more people can finish in the top 10%. In that sense, much of the extra effort may be wasted. In weighing the social benefits of higher spending on education against the cost, this needs to be borne in mind.

Where the book excels is not in making this somewhat familiar point, important though it may be, but in drawing attention to other dangers in the present obsession with education and growth. One is that expanding education thoughtlessly may actually weaken the link with growth, such as it is. Another is that the preoccupation with economic growth narrows and distorts society's idea of what education should be.

The increase in numbers appears to have reduced the average quality of a university education

In Britain, as in many other countries, the economic emphasis has produced a fixation with quantitative targets: the government wants ever more people to go to university, and has tailored its financing policies to that end. The increase in numbers appears to have reduced the average quality of a university education. That is one cost. Any gains to be expected from pushing out more graduates are then further reduced by the positional-good effect. In addition, expanded recruitment of teachers at the tertiary level drains the best recruits from teaching posts in secondary schools. Worst of all, maybe, from an economic point of view, the best universities are being starved of resources. As a result, they are no longer able to do as good a job of preparing the very brightest students for their role at the cutting-edge of science and technology.

Equally impoverished

Why should this draining of resources from elite universities happen? You may think it unlikely, especially if the government is convinced that education spurs growth. Experience proves otherwise, as the book shows. Great efforts to expand the number of graduates have gone hand-in-hand with budgetary stringency across the system, to make the overall strategy affordable. Also, in a regime that is moving towards very wide access to university education—for the most part, at taxpayers' expense—it becomes politically difficult to discriminate in favour of the top universities. That would undercut the egalitarian thrust of the whole enterprise. Thus the best universities find themselves squeezed, and one of the main links between education and economic growth gets hammered.

Measured against its own bean-counting goals, “education, education, education” leaves a lot to be desired. But in any case, the book insists, education is about more than economics. (This column's prejudices, you see, are not spared.) Insisting on ramming more people through a degraded university system is not just sure, for all the reasons mentioned, to disappoint economically. It is also bound, through its self-defeating preoccupation with economic growth, to sideline aspects that do not claim to serve that purpose. “Our recent forebears”, the author concludes, “living in significantly poorer times, were occupied with the cultural, moral and intellectual purposes of education. We impoverish ourselves by neglecting these.”

* “Does Education Matter? Myths about Education and Economic Growth”, by Alison Wolf. Penguin Books.