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Friday, May 18, 2007

Today's Same Facts Link is made with special enthusiasm as Mark Kleiman writes about one of my favorite topics -- private and social returns to schooling.

update: I have added references to my claims of fact in []s

He argues that there are social returns due to knowledge spillovers, the contribution of an educated electorate to the of Democracy and reduced inequality due to supply and demand for degrees which would make the benefit to society greater than the benefit to the student. However, to the extent that education works as a signal of something (intelligence, willingness to defer consumption and, maybe, other gratification or willingness and ability to sit quietly and submit to authority) it has private returns which aren't social returns.

Oddly this happens to be almost exactly what I wrote in my one and only newspaper column (in Il Corriere della Sera).

He reaches an inconclusion not knowing it expansion of schooling would be socially beneficial.

I actually went on and got to an a conclusion.

I agree that it is very hard to tell based on theory or micro data. Sad to say, this leaves us with crude macro data on enrollment and welfare in different countries or states. My impression is very strong that this evidence suggests that no country, state or other political entity has ever spent too much on public education (I admit that the case for university level education is weaker than for secondary and especially primary)[I also admit that this is my "impression." my understanding is that this means I am OK even if someone can come up with such a case]. The countries with bizarrely high enrollment given current income are well known growth miracles (Taiwan. Singapore and especially South Korea)[everyone knows that]. The first states to have high enrollment in high school (midwest in the 19th century) went on to become relatively much richer than they had been (kids in New England were lured off to the then high tech textile mills and New England suffered relative economic decline until the mills went South, kids studied and they got going on the new high tech (the Reagan defense buildup helped a lot too))[Larry Katz told me all this].

Crude -- sure. Too crude for someone who doesn't depend on such data to get publications -- yeah guess so. Enough to convince me that more money should be shoved into education -- hey a flipped coin that comes up either heads or tails would be enough to convince me.


Anonymous said...

I do like [Tyler] Cowan's point that inequality in the lower tail (poverty and extreme poverty) is more important than inequality in the upper tail. This is important to his argument, because the supply and demand for formal education story can not explain the huge increase in incomes of the top 1%. I thought it might be useful to spell out his thought.

On the other hand, I don't see what the difficult problem is. We have a decline in real wages of young workers without educational qualifications. This is terrible. Whatever can we do while we try to improve education and access to education ? How about increasing the EITC ? Worked great last time it was tried (or at least was followed by a good Phillips curve shift). What's the problem ? How to pay for it ? the huge increase in income of the top 1% (who have disproportionate political power but not 50% of political power) makes that easy. Do Clinton recovery plan II tried and true.

I think it is about as easy to be an OK policy analysis as it was to be an OK political economist. It's harder to teach a Parrot to say "EITC EITC" but, I'm sure it can be done.


Anonymous said...

Ah, the above was of course Robert Waldmann....

Notice that Robert Waldmann would use the Earned Income Tax Credit to provide for increased educational opportunites, where I would choose federal-state revenue sharing directed to a dramatic reduction in public college-university tuition. I would however be pleased as punch in using the EITC.

Would such education assistance be affordable? Well, we are spending $15.8 billion a month directly on the strategic and moral lunacy and tragedy of Iraq. Education is vastly more affordable.


Anonymous said...

Please do post your editorial rationale for education.


John Emerson said...

I have read local histories and memoirs of Dutch and Norwegian immigrants to Minnesota and Iowa, and it was amazing how quickly they built schools. Their enthusiasm for education came through just in the way they talked about school.

Anonymous said...

Please do post a translation if possible of your column in Il Corriere della Sera. A superb topic.


Anonymous said...

John Emerson, please do extend your comment and add a reference if possible.

Brad DeLong has also written and spoken of the relative development dynamic of American school about 1900, and how effective education was here in comparison with more limited schooling possibilities in Europe.

I am thinking we might look to Japan on education about 1900 as well.