Influence of Economists in Education?

The September/October 2009 issue of the Harvard Education Letter has an article by David McKay Wilson entitled "The Invisible Hand in Education Policy" on the role of economists in analyzing and proposing education policy.

Wilson maintains that until 30 years ago, psychologists and ed school professors exercised most of the academic influence in developing policy. In contrast, today, Wilson says, all over the education world you see economists studying the effects of government policies and "helping to design programs that provide incentives—-and disincentives—-for students and school districts." Concerning this picture drawn by Wilson, I would say that the academic economists I know are, yes, busy studying policy, but not that busy setting, devising, or designing policy.

Wilson points to a number of areas where economists have made contributions, including class size, school finance, and teacher training.

Class Size. Wilson quotes economist Richard J. Murnane, a professor at Harvard’s Graduate School of Education, who says: "The cost of reducing class size is great....[Although] there are modest benefits, it’s not clear that doing so is the best use of scarce resources.”

I would say that class size is a perfect example of an issue where politicians and bureaucrats are ignoring the findings of social scientists.

School Finance. Wilson notes that economist Eric A. Hanushek, a senior fellow at Stanford University’s Hoover Institution, said in a 1981 paper that money alone wasn’t the answer for improving America’s schools.

“At the time, everybody thought that we should treat schools like going to the moon, that if we just put in enough resources, we could solve everything,” Hanushek said. “We found that money wasn’t the only solution. And that led to lots of questions. One of the aspects of doing better was to have better accountability.”

Teacher Training. Washington, D.C., public schools chancellor Michelle Rhee had as her thesis adviser at Harvard University's Kennedy School of Government economist Thomas J. Kane. Kane has studied alternative preparatory routes for teachers in the New York City public schools. He found that students performed similarly, whether their teacher had a New York state certification or had passed through the alternative New York City Teaching Fellows program. When Rhee came to the District of Columbia schools, she asked Kane to work on measuring teacher effectiveness via a value-added analysis.

Economists have been studying education since Adam Smith. Since I am a political scientist, not an economist, I have no personal interest in how much attention is paid to the findings of economics. But I have on my bookshelves rows of books by economists filled with valuable insights on education -- almost all those insights have in fact been ignored, dismissed, or rejected by politicians and policymakers.

Addendum: As part of a cliched journalistic put-down of the merits of economics, Wilson reminds his readers that economics was called "the dismal science” by 19th century historian Thomas Carlyle. What Wilson neglects to tell his readers is that Carlyle was an admirer of feudalism. He was a proponent of returning recently emancipated black Africans to servitude and supported brutal suppression of an uprising in Jamaica. Carlyle disliked the fact that economists often opposed slavery on moral principle and as economists they pointed to the lessened productivity of slave labor. Hence it was that in his essay entitled "Occasional Discourse on the Nigger Question," Carlyle termed economics "the dismal science" -- indeed he also calls it a "rueful" science and a "dreary, desolate, and indeed quite abject and distressing" one, by which he means that economics is not supportive of feudalism and slavery. If one means by "dismal," "not upholding slavery" -- then the designation is a badge of honor for economics.

They Keep the Formulas in Place for a Reason

The Sunday New York Times today has a front page article on the Obama administration's decision to channel its stimulus money to the states using existing formulas. Times reporter Sam Dillon writes:

In pouring rivers of cash into states and school districts, Washington is using a tangle of well-worn federal formulas, some of which benefit states that spend more per pupil, while others help states with large concentrations of poor students or simply channel money based on population. Combined, the formulas seem to take little account of who needs the money most.

As a result, some districts that are well off will find themselves swimming in cash, while some that are struggling may get too little to avoid cutbacks.

The story reports that Democratic members of Congress say they want to keep using the old formulas to save time in disbursing money. But there's more to it than that.

The best recent analysis of the Title I formulas was done by Susan Aud for the Heritage Foundation. Here's a condensed executive summary of her findings:

1. Formulas have become increasingly complex and obscure;
   
2. Distribution of funds is characterized by seemingly unintended variability;
   
3. Amounts reserved for administration significantly dilute what reaches the classroom;
   
4. Title I's Education Finance Incentive Grant encourages states to equalize spending across school districts, despite the fact that this is an unproven education reform strategy; and
   
5. Rather than delivering effectively on good intentions for helping poor children, congressional action over eight reauthorizations has led to a convoluted, bureaucratic system that is less student-centered, less transparent, and therefore less accountable to the public.
   

Here's a link to a column by Dan Lips and Evan Feinberg on Aud's study.

The truth is the members of Congress keep the formulas in place for a reason. The Democratic Leadship Council (DLC) pinpointed that reason some years ago:

The reality is that the allocation of Title I dollars is based more on politics than on need, on a formula geared to spreading these important federal dollars thin and wide.

In essence, the DLC was saying (and I would concur): Congress's not targeting Title I money narrowly on students from poor households is no accident.

CAVEAT CONSUMPTOR: It's not how much money there is for schools but rather how it is spent and what the incentives are for productivity and performance. Economist Rick Hanushek calls the issue of whether money matters “trivial,” saying that “the research neither says that resources never matter nor that resources could not matter” but only that “providing resources without changing other aspects of schools … is unlikely to boost student performance.”

Will the Stimulus Plan Improve Education?

Economist Rick Hanushek and attorney Alfred Lindseth are both nationally-renowned specialists on school finance. They recently wrote a post on the Princeton University Press blog on whether the stimulus plan of the Obama administration and Congress will actually improve education.

First, Hanushek and Lindseth detail the past record of pouring money, as they put it, into K-12 programs -- with rather modest results:

Over the past 40 years, we have almost quadrupled our per pupil spending (adjusted for inflation), but student performance remains essentially at the same level as it was in 1970. We have poured money into compensatory programs for disadvantaged students, into lowering class sizes, and into introducing new programs and technologies. These enormous expenditures have barely raised a ripple in student achievement according to the National Assessment of Educational Progress, commonly referred to as the “Nation’s Report Card.”

They say that the bill doubles the amount currently spent on unsuccessful programs in two major areas:

The stimulus package roughly doubles the amounts spent by the federal government for compensatory education (Title 1) and special education. A large portion of the package will make up for education budget shortfalls in each state, perpetuating other historical policies and practices that have failed to significantly improve student achievement over the last four decades.

Importantly, none of the spending on these programs emphasizes innovation or improvements over current practices. Moreover, the money will be allocated according to the politically determined patterns of the past with no effort whatsoever to distribute the funds based on demonstrated need.

And they point to impact aid as example of such ineffectual spending:

[A]n especially egregious element is the $100 million addition to the impact aid program.... [V]irtually every administration since the 1960s has tried to eliminate this program, but now it is being expanded.

Hanushek and Lindseth say their "biggest concern" is that "the stimulus program simply locks in a set of bad policies." (They do acknowledge that a few specific pieces of the stimulus package expressly direct funds to support innovation and improvement, but note that these amount to "less than two percent of the total.")

Two other valuable treatments of the implications (for education) of the stimulus package are by Checker Finn and Mike Petrilli on National Review Online and by Lance T. Izumi on FlashReport.