Paying for Education

Debating the Price of Progress

Peter Davies

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781317331902
• Edition: 1
• Topic: Bildung
• Subtopic: Bildung Allgemein

Which type of education should we pay for?

How much education should we pay for?

Can we buy knowledge about how to improve education?

Uniquely presenting a general overview of economic principles applicable to all sectors of education, Paying for Education makes key economic ideas accessible to non-economists, whilst drawing on insights from other social science disciplines. It examines the implications of its analysis, especially for two important areas of policy – paying for teachers and paying for teaching in higher education – in order to highlight some underlying issues and consider alternative policy options, as well as reflect on possible futures.

The chapters examine:

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• The value of education for the individual

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• The value of education for society

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• Private and public demands for education

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• Choosing a system to supply education

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• The cost, efficiency and equity of providing education

Analysing evidence and case studies on a global scale, Paying for Education is an essential read for academics, educational administrators, policy makers, leaders in educational organisations and all of those interested in the future of how we pay for education.

1

INTRODUCTION

The focus and scope of this book

I can pay for my education, someone else could pay for me, or I could pay through tax. But someone has to pay, because educating people takes a lot of resources. This book considers who should pay and how much they should pay. Much of the time is taken up with whether these questions should be answered by market forces or governments.

So much is expected of education. Governments talk as if their ailing nation states can be revived through stronger doses of education: to increase economic competitiveness and to foster national cohesion. The New Labour government in the United Kingdom declared that its priorities in the first decade of this century were ‘Education, Education, Education’ (Adonis, 2012). A White House briefing in 2015 declared: ‘President Obama knows we must comprehensively strengthen and reform our education system in order to be successful in a 21st century economy.’¹ The European Council (2015) declared targets for increasing participation in early years education by 2020 as part of its strategy for long-term economic growth based on increasing the quantity and quality of education.

But other voices (e.g. Grubb, 2009; Brown et al., 2011) tell a different story. Some tell us that education is a side-show. Life prospects are forged by global economic power games between nations and corporations. Others tell us that social structures use education as a way of keeping people in their place. Spending more on education only moves the deckchairs.

The stories people tell about education are rooted in powerful ideas not just about ‘the way the world works’, but about why people do what they do, what they know and what they want. This book takes the view that it is neither desirable nor reasonable to follow one of these stories as a shining path while ignoring or denigrating all others. This stance is not based on a view that all these stories are fictions seeking to recruit us to one gang or another. Each story gives us one, valuable, perspective on a very complex phenomenon about which we know some things, but not yet enough. The intention of the book is to juxtapose rather than integrate these stories. Efforts to integrate the stories (e.g. Akerlof & Kranton, 2002) are hugely important, but that task is well beyond the scope of this book which is only able to offer a very incomplete picture of the vast amount that has been written on this subject.

This book focuses on OECD countries and refers chiefly to evidence from Australia, the USA and the UK. Policy and practice in England receives much more attention than policy and practice elsewhere, simply because there is not enough space for more extensive description of other education systems. New analysis of data (largely in Chapter 5) is restricted to England. While there are substantive differences among education policies pursued in OECD countries (including within the UK), this group of nations faces certain similar contextual challenges which affect the consequences of pursuing one policy rather than another. The problems for OECD countries in the twenty-first century are hardly less than those faced in the previous two centuries. Relationships between work, welfare and citizenship are being transformed through information technology, globalisation and demography. International relations are strained by shifts in power, ideology and migration. Global warming casts a shadow over the sustainability of taken-for-granted modes of production and lifestyle. Populism has re-emerged as liberal democracies have struggled to meet voters’ expectations.

This chapter sets out some broad positions adopted by this book: on the context for education policy in the first half of the twenty-first century, on the distinctiveness of education and a perspective on social science. The chapter also introduces some major themes in the book and concludes with brief summaries of each of the chapters.

A context for education policy (1): globalisation and national identities

The roles of markets and governments cannot be properly understood in abstract, divorced from time and space. Growth in trade and communications has made many markets more globally integrated over time. The roles that governments take in education in the twenty-first century are very different from the roles they took in the nineteenth century (MacDonagh, 1958). The form of globalisation in the second half of the twentieth century and the morphing of nation states into market states (Bobbitt, 2002) have changed relationships between societies and their governments. By the early twenty-first century only eight countries ranked among the top 25 economic entities in the world.² All bar one of the 17 companies in the top 25 operated in the financial sector.

Following the financial crash of 2008, globalisation has met with increasing resistance in the form of populist movements in many Western countries. This form of resistance sees problems in the movement of peoples, the supply of labour and threats to perceived hallmarks of national identity. It has also been accompanied by a rhetoric which imagines that the growth in incomes previously delivered by globalisation can be re-established by resisting globalisation. Many are anxiously waiting to see whether twenty-first-century populism turns out to be less of a tide than a vain attempt to stand against one.

This book treats the financial crash as a stimulus for reconsidering what nations are paying for when they devote resources to education. The form of globalisation and its accompanying rhetoric has positioned the purpose of education as securing the conditions for productive employment: developing skills and aptitudes for an internationalised labour market and creating stable contexts for low-risk production. It has encouraged a shift to viewing education as a phenomenon provided primarily by organisations for individuals (rather than by society for society). It has also changed the constraints upon governments to intervene in the process of education (Kettl, 2000). Education has not always been viewed in this way.

In 1819 only one in 15 children in England received a formal education (Akenson, 2011). However, steadily through the following century the church and then the state set about the task of using education to spread social and moral order in the new industrial age (Soysal & Strang, 1989) or, as in the case of Ireland (Akenson, 2011), the colonial age. In either case, the prime role of education in OECD countries was to build the nation state through socialising the mass of citizens for the industrial age (Green, 1990; Wiborg, 2004). Socialisation was embedded in the vision and interests of the middle classes as described by narratives provided by Apple (1982) for the USA, Power et al. (2003) for England, and the contributions in Blackbourn and Evans (2014) for Germany. The middle-class prescription for an orderly society mapped an education that would prepare sections of society for different types of employment and secure acceptance of norms of behaviour and the distribution of power. These accounts portray education as a national rather than as an individual process.

Over the past 100 years, economic structures and incomes in OECD countries have changed enormously. As blue-collar jobs have disappeared and white-collar jobs have appeared, there has been an increasing expectation for individuals to spend longer in education to improve their productivity. The story of human capital has taken centre stage as politicians have come to view more education as critical for the international competitiveness of their countries. The salvation of the country in the face of the global economy lies in sum of individuals’ human capital which make a nation’s workforce attractive to international capital (see e.g. OECD, 2007). This message offers an attractive prospect of dealing with the vexed interactions between average income and inequality. If education makes the individual economically productive then providing opportunities for education is a sufficient policy for a fair society: they had the chance. This message has survived the financial crash in 2008 with barely a scratch. Speaking in 2016,³ the German Chancellor, Angela Merkel, declared: “This means we must empower every young person, through education, to contribute his or her skills to the community.” In the same year the UN Special Envoy for Education, Gordon Brown, declared that annual education spending in low- and middle-income countries needed to rise from $1.2 trillion in 2016 to $3 trillion in 2030⁴ in order to achieve social reform and to increase average welfare.

But 2008 cannot be so easily swept aside. Several commentators (e.g. Stiglitz, 2013; Wisman, 2013; van Treeck, 2014) have noted the relationship between rising inequality and increasing household debt in the USA before the financial crash. Increasing participation in education had been associated in these years with rising average incomes and rising benefits from higher education, but also with a widening gap in individual prosperity. Education reforms in the nineteenth century took it for granted that education would affect what was considered normal and acceptable in society: not that everyone would think the same but that education would affect the median position around which variation was centred.

Globalisation is changing social as well as economic structures. Some communities have thrived and some have become neglected as patterns of employment and prosperity have shifted. As traditional working-class jobs disappeared, one policy response was to change the curriculum to prepare young people who did not come from managerial and professional backgrounds for ‘the new jobs’. Under the influence of human capital theory, policy then switched to increasing the quantity of education in an effort to ‘upskill’ the entire workforce. More education has to be paid for. But who should pay?

A context for education policy (2): education, economic growth and the structure of employment

Changes in employment structure over the past 100 years have increased the proportion of non-manual jobs that require higher levels of education (Feinstein, 1999). The school-leaving age has steadily risen.⁵ Those who were forced to stay on in the first year after the school-leaving age rose earned more than those who left school a year earlier when this was still permitted (Harmon & Walker, 1995; Oreopoulos, 2006). Participation in higher education spread from the few to the masses, fuelled by commissions (e.g. Robbins, 1963; Dearing, 1997) and policies that portrayed growth in higher education as a prerequisite for a growing economy in the information age. Despite fears about over-education, the graduate premium – the difference between what an average individual with given school grades earns if they are a graduate or not – has increased rather than declined (Goldin & Katz, 2007). There has been a positive association over time between increasing average incomes and the length of time individuals have spent in formal education: changing employment structure and increasing average incomes have increased the capacity of societies to pay for education and increased the number of people who face financial incentives to spend a long time being educated.

Increased participation in education requires more teachers, unless the ratio of students to teachers is allowed to increase. But parents and students prefer lower student–teacher ratios. Parents who send their children to private schools in England are willing to pay more when children are taught in smaller classes (Davies & Davies, 2014). Moreover, increases in average income in England have been associated with reductions over time in the pupil–teacher ratio in private schools (Davies, 2011). However, this adds to the pressure to recruit more teachers to meet rising levels of participation and preference for smaller classes. Since it takes a long time to develop capacity to be a good professional educator and professional educators have capabilities that are in demand in other parts of the economy,⁶ teachers have to be paid well. To maintain the number of graduates who choose to become teachers requires teachers’ salaries to keep pace with salaries offered elsewhere. When a society requires an increase in the number of teachers there is pressure for teachers’ salaries to rise relative to the salaries of others.

Elsewhere in the economy, high labour costs have prompted a switch to different forms of production which require lower inputs of labour relative to capital. Applications of information and communications technology (ICT) have been at the heart of this change, driving substantial increases in productivity in some industries. Unsurprisingly, therefore, there have been many visions of transforming the process of education through ICT (e.g. Allen & Seaman, 2007). Although ICT is starting to change the way in which higher education is provided, universities and schools rely chiefly on face-to-face contact between teachers and students. To some extent this may reflect shortcomings in currently available ICT which limit capacity to replicate or move beyond the quality of interactions between teachers and learners which are widely held to be critical for good education (see e.g. Hattie & Timperley, 2007). It may also reflect some advantages of human contact for the emotional and social context that promotes learning. Unless (or until) advances in the design and use of ICT can overcome these problems we are left in a situation in which the conditions of production in education and elsewhere mean that there is an inexorable tendency for the relative cost of providing education to rise over time. This phenomenon (known as ‘Baumol’s Cost Disease’) is not restricted to education (Baumol, 2012), but it plays a substantial role in steadily raising the amount society pays for education. In societies where education is largely paid for through taxation, this creates a problem for governments. People want more education but they don’t want to pay mor...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright page
• Table of Contents
• List of figures
• List of tables
• Acknowledgements
• 1 Introduction
• 2 The value of education for the individual
• 3 The value of education for a society
• 4 Private and public demand for education
• 5 Providing education: productivity, cost, efficiency and equity
• 6 Supplying education: choosing a system
• 7 Policy questions
• References
• Index