The case for mutual educational disarmament

on Aug19
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ECONOMISTS TEND to be big fans of education, which is perhaps not surprising given how much of it they consume and how well their textbooks can do. Alfred Marshall, writing in 1873, hoped that education would help erase the “distinction between working men and gentlemen”. Gary Becker of the University of Chicago reimagined education as an investment in “human capital” that would earn a return in the market much like other assets. Harvard University’s Greg Mankiw, whose books have educated more than most, once calculated that differences in human capital between countries could account for much of their otherwise inexplicable differences in prosperity.

But economics can also be scathing about schooling. The theory of signalling likens many educational credentials to peacock’s tails: costly encumbrances, useful only as conspicuous proof that their owners are intellectually strong enough to bear them. And in “The Social Limits to Growth”, a book published in 1976, Fred Hirsch, once a writer for this newspaper, pointed out that education is often “positional” in nature. What matters is not only how much you have, but whether you have more than the next person. For many students it is not enough merely to acquire a good education. They must obtain a better education than the people jostling with them in the queue for sought-after jobs.

Positional goods are, by their nature, in strictly limited supply. Everyone can in principle live in a good neighbourhood, attend a good school, and work in a good job. But logic sadly dictates that not everyone can enjoy the nicest neighbourhoods, best schools or most prestigious jobs. As Hirsch pointed out, “what each of us can achieve, all cannot.”

An unhappy corollary is that one family’s outlays on schooling raise the bar for everyone else. Families are drawn, often unwittingly, into educational arms races. They spend money and time on after-school tutoring or extra-curricular activities (so-called shadow education) in the expectation that it will improve their child’s position in the queue for advancement. But they quickly discover that everyone else is doing the same, leaving them in the same position as before. They are in fact worse off, because of the costs and frustration incurred. “If everyone stands on tiptoe, no one sees better,” Hirsch noted. And their feet also hurt.

These arms races are often particularly ferocious in East Asia. In China and South Korea, schoolchildren face nationwide “high-stakes” tests—the gaokao in China and the suneung in South Korea—that play a big role in determining whether and where they can go to university. In China’s cities, pupils spent 10.6 hours a week on after-school tutoring, according to a report by Frost & Sullivan, a market-research firm.

The governments in both countries have tried to orchestrate a kind of collective disarmament. South Korea imposed a 10pm curfew on cramming schools in 2009. Inspectors would go on patrol looking for schools with their lights on. (Some schools covered their windows with black tape.) China has been introducing restrictions on after-school tutoring at an increasing pace since 2018. Last month it barred tutoring firms from listing on the stockmarket, raising foreign capital or making a profit. The strictures have wiped tens of billions of dollars off the market value of China’s once-booming edtech sector.

Will these measures work? It is almost impossible to stop families hiring private tutors to teach their children in their own homes. And if shadow education is successfully curtailed, the arms race can take different forms. Parents who cannot buy a better education directly can instead buy homes near better schools. A study by Xuejuan Su of the University of Alberta and Huayi Yu of Renmin University found that when the management of a public elementary school in Beijing is taken over by another better-regarded school, property prices nearby rise by an average of 7%.

The arms race is notably less intense in parts of Europe. In Norway and Sweden parents show little demand for tutoring—the wealthy even less than others, according to Steve Entrich of the University of Potsdam. And overeducation is less common in Germany and other countries that sort children early into academic or vocational schools, with little mobility between the two, according to a study by Valentina Di Stasio of Utrecht University together with Thijs Bol and Herman Van de Werfhorst of the University of Amsterdam. Vocational schools are supposed to teach what employers want recruits to know. That may limit the scope for credential inflation. For better or worse, they also remove large numbers of students from the race for more academic laurels.

Beruf als Politik

Both China and South Korea have begun promoting vocational education. China’s latest five-year plan (which concludes in 2025) promises to explore an “apprenticeship system with Chinese characteristics” and to “vigorously cultivate talents with technical skills”, according to one translation. Some of the edtech firms squeezed out of after-school tutoring are exploring vocational education instead.

Germany’s custom of placing children on different tracks at age ten or 11 also invites an interesting thought experiment. What if the gaokao (and similar tests) were held earlier in a pupil’s career? If these exams truly test the knowledge required for university, they must be held just before university starts. But if such tests mostly serve as filters, sifting better students from worse, they need not be held so late. An aptitude test at 16 years of age, say, will probably generate a similar ranking as one held two years later. The tests would remain stressful. But an earlier gaokao would save families a year or two of costly cramming, shortening “the obstacle course”, as Hirsch put it, without much changing the results. Such tests will always have high stakes. But they need not require such high effort.

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This article appeared in the Finance & economics section of the print edition under the headline “Assume the positional”

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