What is the value of education?

Rich Harris

 

The UK education system has been firmly in the headlines. Whether it’s the Coalition Government’s Schools White Paper, The Importance of Teaching, or students protesting against the Government’s response to the Browne report (Securing a Sustainable Future for Higher Education in London) the critical issue of whether education is a public or private good is being discussed and debated rigorously, though not necessarily in those terms.

Of course, it’s both. Though one might question the (historic) figures bandied around to assert the wage premium a higher education degree is said to attract, and certainly discount the idea it will apply to everyone who passes through a University, it must be true that one of the motivations that attracts students to University study is the prospect of a well-paid job. Nothing wrong with that. Indeed, it is often the transferable skills and training that Universities offer that make them an attractive proposition for internal as well as overseas students. On the other hand, at a time when the talk is of ‘the Big Society’ and about measuring happiness not merely economic output as a measure of the country’s progress, it would be odd to stop valuing learning as a social and cultural good in its own right. There may not always be an immediate and tangible economic return but were Universities ever intended to be just the training partners of industry, business and commerce?

Meanwhile, the new academies and free school programmes outlined by Michael Gove MP, Secretary of State for Education, have reignited the debate about social polarization if the best performing schools opt-out of local authority governance and, it is assumed, begin to attract the better (meaning middle-class) pupils who then receive a better funded educational experience than those left “trapped” in the less desirable schools. Here again, we encounter the question, who is education for? The individual recipients? Society as a whole? Or, both (in which case, how are they balanced?).

In A Journey, Tony Blair staunchly defends the New Labour policy of promoting school choice. The basic argument is who is government to hold back those who want to innovate, to be successful, to want the best for their children? It’s compelling but critics of those and current policies might argue they are individualistic. They miss the broader social point that it is not a level playing field: those with the resources and influence to do so, it is alleged, are best able to capitalise on the system. They will be the “winners” and inequalities will grow. And inequalities, according to the authors of the much publicised and debated book The Spirit Level are socially damaging.

But is it true? Have policies of school choice, partial marketisation and competition actually raised levels of social polarization? For schools the evidence remains unclear: see past CMPO papers and a forthcoming CMPO working paper reviewing the literature to date. In Higher Education, University education is not the preserve of the elite and the wealthy. In fact, the traditional image of the ivory towers where fresh-faced young students travel from the Home Counties along the M4 to study for three years away from home increasingly is misleading. Many students are part-time, mature and live at home. And, though young people from more affluent areas are still more likely to attend University, young people from disadvantaged areas have been substantially more likely to enter higher education since the mid-2000s (see Trends in young participation in higher education: core results for England, HEFCE, 2010). It would also not be unreasonable to suggest that the professionalization of teaching with Universities, though still not as strongly valued as it should be, is driven in response to the raised expectation of fee-paying students.

Yet, that was before a near three-fold increase in fees that will see the Aimhigher programme (promoting widening participation) axed and which will make the English University system the most expensive in the world, saddling students with a debt for up to 30 years. Quite what the effects on the housing and mortgage markets will be when graduates must first pay a fixed proportion of their salary to repay their student fees can only be guessed at. Will it be the case that only those from the “best schools” will be able to afford to go on and attend the “best universities”? Only time will tell.

In the meantime, the debate continues. What is that value of education? And who or what gains from it?

 

Paying to fail?

Simon Burgess

Today, a very special education policy experiment was revealed.

In the past, policies have been introduced aiming to incentivise schools and teachers to raise educational attainment. These have been effective to a degree: our evidence shows that performance pay for teachers does raise educational attainment; competition among schools also has some impact, albeit much weaker.

This new policy incentivises students themselves. And in a break from past policies, this scheme directly incentivises students to fail their exams.  It is reported that Blackburn College will pay £5000 to each student who fails her/his exams. This intriguing new policy will certainly add to the research evidence on how (not) to raise attainment.

This issue is taken seriously in the US with a number of landmark policy experiments raising attainment for some of the more deprived and low-attaining groups in the country. At Harvard, Roland Fryer reports on the results of a large scale experiment in which students were incentivised in different ways. In some schools students were paid on results, and in some schools they were paid for activities leading towards better results, such as attendance and completing homework. The results were mixed, but the latter class of experiments were effective and cost-effective. Similarly, C. Kirabo Jackson at Cornell has shown that the Advanced Placement Incentive Program in Texas produced some very exciting results from paying 12^th grade students for test-passing scores. Such students are more likely to attend college, do better when they attend college and are less likely to drop out. Similar experiments have taken place in the Harlem Children’s Zone

These experiments give us an idea of the value of a policy to incentivise student achievement. As far as I know, Blackburn’s policy is the first chance we have had to study the value of a policy to incentivise student failure.

More seriously, the idea of a commitment device is standard: something that penalises the provider if something does not work out as planned. A long warranty on a car is one way of the manufacturer raising the cost to itself of the car failing. But in a case such as studying for exams, where student effort is so hard to observe, and where good or bad luck can play such a role, what economists call the “moral hazard” problem is very severe.

There are obvious alternatives – the College could pledge to give £5000 to a local charity for every student that fails the exam. That would still appropriately hurt the provider for failure on their part, without giving marginal students a very high temptation for failing at the last.