Tuesday, October 15, 2013

The Economics Educational Achievement 2

Last post I was discussing the lack of empirical evidence on the relationship between wage inequality and early education inequality. For that purpose I used this  paper about  economic effects of education. The same paper give us a lot more insight. For example, it ranks countries by family-background effects on math and science students performance:



UK and Germany are countries where family determines a heck of a lot of how good children are going to perform on math and science. I am not sure if that is good or bad, though. Clearly, is bad if children with potential are discoraged to study and brought down to an appalling average by school public system.

How does investment affect quality education? The answer is nothing.


Not even class size seems to have a meaningful correlation with test scores:


So, what is it then? what improves student test scores? According to this paper, school autonomy, centralised exam, privately operated schools and probably incentives, that is, a clear link, for parents and students, between school performance and higher salaries.

Tuesday, October 1, 2013

The Economics Educational Achievement

This recent article by The economist is interesting. It says that inequality in the US has been growing since 2007 and the main reason for that is poor policies on early education:

"investment in the young should focus on early education. Pre-school is a crucial first step to improving the lot of disadvantaged children, and America is an international laggard. According to the OECD, it ranks only 28th out of 38 leading economies in the proportion of four-year-olds in education. [...] Equality of outcome will always be a fantasy, but America should do more to spread opportunity widely."

It makes a lot of sense. If the government invests in human capital of the poorest, they will improve their skills, and therefore their job opportunities. Unfortunately, as often happens in economics, empirics doesn´t match well with sensible theories. This paper by Eric A. Hanushek and Ludger Woessmann summarizes some of the empirical evidence on the relationship between skills inequality and wage inequality:



Clearly, the relationship between wage inequality and skills inequality seems to be, at best, modest. This second graph from the same paper also illustrates how uniqual primary school results are not linked to unequal societies. Iceland, Norway and New Zealand are some of the most equalitarian societies in the world.


The article continues by saying market inefficiencies might also be harmful:

"America’s tax code is riddled with distortions that favour the rich, from the loopholes benefiting private equity to the mortgage-interest deduction (an enormous subsidy for those who buy big houses). A simpler, flatter code with no exemptions would be more efficient and more progressive. A blast of deregulation would help, too. Many of America’s most lucrative occupations are shielded by pointlessly restrictive rules (think doctors and lawyers)."
I think that is more the point. Subsidies to big old industries and banking bail outs can't be good for equality. Government and local regulations on economic activities, employment legislations, financing, etc, doesn't help either.