The education myth?

Ricardo Hausmann has an excellent and provocative column, here is part of it:

In the 50 years from 1960 to 2010, the global labor force’s average time in school essentially tripled, from 2.8 years to 8.3 years. This means that the average worker in a median country went from less than half a primary education to more than half a high school education.

How much richer should these countries have expected to become? In 1965, France had a labor force that averaged less than five years of schooling and a per capita income of $14,000 (at 2005 prices). In 2010, countries with a similar level of education had a per capita income of less than $1,000.

In 1960, countries with an education level of 8.3 years of schooling were 5.5 times richer than those with 2.8 year of schooling. By contrast, countries that had increased their education from 2.8 years of schooling in 1960 to 8.3 years of schooling in 2010 were only 167% richer. Moreover, much of this increase cannot possibly be attributed to education, as workers in 2010 had the advantage of technologies that were 50 years more advanced than those in 1960. Clearly, something other than education is needed to generate prosperity.

As is often the case, the experience of individual countries is more revealing than the averages. China started with less education than Tunisia, Mexico, Kenya, or Iran in 1960, and had made less progress than them by 2010. And yet, in terms of economic growth, China blew all of them out of the water. The same can be said of Thailand and Indonesia vis-à-vis the Philippines, Cameroon, Ghana, or Panama. Again, the fast growers must be doing something in addition to providing education.

The piece is interesting throughout.

Comments

Culture?

Definitely - after WWII, with pretty much its entire manufacturing base either destroyed or shipped off to the Soviet Union, the educated German workforce was able to replace that manufacturing base within a generation.

Of course, a workforce's Ausbildung is not well reflected in the English term 'education' - which just might explain why Americans talk about education, while Germans tend to have little concrete idea what that term is supposed to mean, in comparison to Ausbildung, which includes the broad variety of skills that mark a successful manufacturing economy. Even after that economy's physical structure has been eliminated to the extent that unlimited warfare permits, and rebuilt.

Culture certainly plays a role. But then, German culture (much like the culture of other successful manufacturing economies like that of Japan and South Korea), places a high priority on ensuring a work force which is skilled/educated.

How can they place a high priority on education when according to you they cannot even understand what it means?

This may come as a surprise, but Germans actually speak German in Germany, not English. Which is why the actual German term - 'Ausbildung' - was used twice. One of those times being an attempt to explain that Ausbildung does not really translate into the English term education.

Apparently, that explanation - '... a workforce’s Ausbildung is not well reflected in the English term ‘education’ ... ' was inadequate.

Maybe Prof. Cowen, with his knowledge of German, can explain it to you?

Of course the Executive Director of the Mercatus Institute would not be interested in alternatives to the US University model allowing his to collect the rents and his Koch backers to manage the intellectual gateway to education.

Another dude with Koch Tourrete's.

Of course the Koch allied factions are always trying to shout down dissidents with name calling.

All critics of the conspiracy theory are part of the conspiracy, right, Pending?

A simpler explanation by my German wife:

Vocational training is seen as too low class in America, and is not considered part of the skill set of the nation, whereas it is in Germany.

Ausbildung is really not that foreign a concept. Neither is education.

E. Harding,

I think it pretty clear that Prior_Approval is a paid Koch operative whose only purpose is to discredit all critics of the Koch Brothers underhanded attempt to rule the world from the shadows. There really can't be any other rational explanation for his strange behavior.

"pretty much its entire manufacturing base either destroyed or shipped off to the Soviet Union"

Sorry to nitpick, but Germany's war reparations to the Soviet Union were largely fulfilled by East Germany, not the West as this seems to imply.

prior_approval what they retained was the knowledge that they had learned by doing which is in keeping with the article.

Was it the Marshall Plan? No, it was magical German superiority.

It wasn't live. It was Memorex.

1. Improve your institutions
2. Improve schools
3. Improve health and sanitation

Some think better education will lead to better institutions but it's not truth, you can have a screwed up regime with great schools (Russia). A bad regime (or extractive) will block economic growth and social development, in case of China, despite not being the ideal, its institutions work fine, at least better than Russian and Ben Ali's Tunisia. (moving toward a more open society would make China even better).

Hardware (roads, ports, airports, schools, etc) is important but it takes good software to extract the most from state of the art hardware. In the case of nations, software is political system, education, judiciary, etc.

8.3 yrs school = more than half a high school education?

Am I missing something?

I think that the concept is that 12 years of schooling = a high school education, therefor 6 years of schooling = half a high school education, and 8.3 > 6?

But terrible phrasing, I agree.

Thanks. Looks like it makes sense that way. I also thought France averaging less than five years of schooling in 1965 seemed so low as to suggest a different scale than I was expecting, but it looks like France averaged 6.0 years of schooling in 1980, when the U.S. averaged 11.9 years. Appears that some of the large Western European countries (France, Germany, Italy, Portugal, Spain) significantly lagged the U.S. and other parts of Europe until relatively recently.

Gee, I wonder what could be different about the Chinese? Hmmm. What a great mystery this is...

Indonesia vs. the Philippines, then.

Actually Filipinos are better compared to Latin American countries as they have similar (low) IQ profiles.

I do not believe Filipinos have IQ profiles that are much lower than those of Ukrainians. Indonesia probably has a substantially lower national IQ than the Philippines. And the Philippines is substantially poorer than any Latin American country (except Haiti, Honduras, and Nicaragua).

We forget that traditionally

It's a 'tradition' because Fiorello LaGuardia was bad at geography?

Well I'm sure it was a white guy's fault right, for not being able to tell the foreigners apart haha. But of course we have to realize its only in the last couple decades with Political Correctness being pushed on College campuses that we have these historically and culturally strange views that culture is somehow unconnected to behaviour.

What good is a test with cultural bias, and created by highly educated white men, in measuring intelligence?

You would do better to compare results of standardized tests in maths, and then focus on differences in the education systems and access to education in general. But then, this would probably also be misleading with regard to "intelligence", since I think Latinos are on average less interested/motivated to do well in maths than Filipinos.

You could equally compare the IQ of uneducated and educated populations and then delude yourself into thinking that you were able to compare their "intelligence".

"What good is a test with cultural bias, and created by highly educated white men, in measuring intelligence?"
Cultural marxist detected, please go kill yourself.

Psychometrics does have a black box vibe to it.

Cultural marxist detected, please go kill yourself.

You first.

"What good is a test with cultural bias, and created by highly educated white men, in measuring intelligence?"

-Pretty good, actually.

"What good is a test with cultural bias, and created by highly educated white men, in measuring intelligence?"

Are you actually asking? Most critics of IQ tests probably haven't actually read significant information about their effectiveness.

>>IQ tests were created by racist nazi white supremacists
>>Whites score slightly below average
>>Jews score the highest
>>We all know how much the white surpemacists love the jews

"What good is a test with cultural bias, and created by highly educated white men, in measuring intelligence?"

That should be obvious. "Intelligence" is really testing a set of abilities and aptitudes that predict your success in a globalized society whose rules and procedures were also developed over centuries by the ancestors of those same highly educated white men. For all intents and purposes, unless you are a hunter-gatherer living in an isolated tribe, than your modern reality has a built in cultural bias, and intelligence tests will do a pretty good job of determing if you have the aptitude to succeed. And unfortunately genetics pay a significant role in whether or not you were born with that aptitude.

"Culture" is created by the population of a country. If a particular culture leads to higher IQ test results then this is the same as saying that IQ is higher.

Please do us a favour and define "cultural Marxism" before you pretend to have anything of value to add to this discussion. Good social skills, teamwork, active listening, etc. are more relevant than IQ for the vast majority of positions in the economy.

"You first."

We disagree on a lot of things, but I think you might be on to something here. Thank you for the contribution.

Government central planners drastically increasing the wage income on average and drastically increasing the number earning wage income.

The wage income increase was paid for by increased consumer spending in China - the wage workers needed to pay for food and housing, and while a lot was saved, lots was spent buying new assets as a form of savings - those empty apartments - but most important, China's central planning meshed with the US conservative economic policy of cutting costs by killing jobs in the US to buy imports from China which paid lots of new wage workers lots more income that they got on the farms.

And with reduced incomes in the US, lots more borrowing in the US helped pay for those higher Chinese wage worker increases, a policy initiated by Reagan promoting economic growth by bank deregulation to get the government out of the way of profit from debt financing consumer spending.

Isn't this just attacking a straw man? Who is arguing that the only thing we need for higher productivity is more and better education? If you want to argue this or that specific proposal isn't worth the cost, then you need to do a lot more work than this.

"Who is arguing that the only thing we need for higher productivity is more and better education?"

Lots of people in varying degrees. It is the central policy theme of many elections, particularly at the local level in the United States. And the focus is always on money - however much we spent last year, this year we need to spend more, because progress. No attention is paid to outcomes or effects.

So you look at some 3rd world countries, they claim to educate their public x number of years, now we are going to defund public education in the United States? You call that an argument. Good lord.

Education in the U.S. is vastly overfunded. Finland and Korea spend less per student and get substantially better results.

Most outcomes in education are IQ driven. The US has a much greater immigrant percentage of the population, typically not coming from high IQ countries.

Arrgh. Another Unz denizen.

The findings would appear to suggest that education is nearly meaningless on it's own in determining productivity. Which would beg the question, why do we spend so much money on it?

I don't think the evidence presented in the article even begins to raise that question. Just because 'on it's own' it doesn't matter much... that still leaves room for a large contribution from education.

"...education is nearly meaningless on it's own..."

"I don't think the evidence presented in the article even begins to raise that question. Just because 'on it's own' it doesn't matter much..."

Okay.

What good is education when people that get it don't understand/misuse the phrase "beg the question"?

I think the point of the article was that spending more on education so that more folks understand that phrase would not increase productivity.

Conservatives argue wages are based on merit like more education and that justifies high wage inequality, say 1000 times the wages for a MBA manager compared to the guy cleaning the MBA's toilet.

As income inequality keeps increasing, the justification is merit, Mitt Romney not only deserves millions in income but lower taxes for laying off people without high school degrees with decades in factories because he not only has advanced degrees, but degrees at the best most expensive elite schools proving he is 10,000 times more deserving than the steel maker.

If not education, what merit justifies the much higher income inequality of today compared to the 50s and 60s when economic growth as seen by the typical American worker was much more like China over the past few decades??

Average MBA Manager makes about $110,000.
Are you saying janitors make $110 a year?

Does the "typical American worker" of the 50s and 60s include minorities and women?

Taleb argued most of education is a luxury good. GDP would go up if education were cut and people worked instead. Probably 2/3rds of all university students are wasting time and money, the remaining 1/3 produce all of the intellectual output universities are needed for. Given how many intellectual fads have taken over universities, one could also argue that in some ways, universities are also hindering science. By cleaning out the 2/3rds, the physicists will be left alone with their research.

A great quote from Nassim Taleb: "Ivy League Universities are becoming in the eyes of the new Asian upper class the status luxury good. Harvard is like a Vuitton bag and a Cartier Watch. It is a huge drag on the middle class who have been plowing an increased share of their savings into educational institutions, transferring their money to bureaucrats, real estate developers, professors, and other parasites. In the United States, we have a buildup of student loans that automatically transfer to these rent extractors. In a way it is no different from racketeering: One needs a decent university “name” to get ahead in life. But we have evidence that collectively society doesn’t advance with organized education, rather the reverse: the level of (formal) education in a country is the result of wealth."

A lot of Chinese firms are strongly affected by prestige consideration in their hiring preferences. For the Chinese I would think of it as less of a luxury good compared to other populations. In Canada, for example, often, a degree is a degree is a degree (more so 10 years ago than today), but I can cite the example of working in a language centre in China and every person who had studied overseas had done so for a term or two in an Ivy League school ... and that's who got hired.

He's not wrong, but...upper class status competition will always be with us. Better ploughing their money into universities than country houses, mosques, terracotta armies, pyramids, no?

What's wrong with country houses?

No pyramid ever called me a cracker.

More like condos than country houses in China, but same diff really.

Taleb argued

Always listen to the talented hustler, especially when he manufactures his own jargon.

He's rich.

You're not.

Bitter, much?

So is Donald Rumsfeld. But nobody ought to listen to him!

Millian, your reply is worthwhile, but I feel close to certain, based on your decadent use of the exclamation mark, that you have, by a preponderance of the evidence, no idea - as in, given a quiz with ten simple questions on yes/no issues - what Donald Rumsfeld's ideas are on specific subjects. Speaking as someone who, for random reasons (random in that I, for random reasons, am one of the few Americans - although not in such a minority among the posters on this site as among the general populace - with little to no respect for the supposed intelligence of most Washington celebrities, for All Silicon valley Billionaires, and for All Ivy League Hucksters) happens to know former Congressman Rumsfeld's stated positions, not only on the subjects where the draft dodgers of the world consider him wrong, but also on the other subjects, also important, that sort of fly by the draft dodgers in their smug haze; I think that ninety five to ninety nine of the people who comment on the minimally reasonable sites of the internet, including this one, should every once in a while contemplate the possibility that people like Rumsfeld every once in a while say something that should be listened to.
(slight borrowing in this comment from Plautus, not that you care).

Is one of those subjects the number of troops needed in Iraq after toppling Saddam Hussein?

Taleb is not a hustler, he is ego blind. I do blame him for it, but it is different

This crowd has heard this point, but it is absolutely right. Caplan is particularly known for stressing this and planning his upcoming book, "The Case Against Education". Mike Rowe, host of the infamous, "Dirty Jobs" has also stressed this. Most of the work that generates revenue requires intelligence, but also more discipline, work ethic, and drive than intellectual skill. Government jobs, of course, are more credential focused.

Government jobs generate revenue. People decide they want more of something, and their representatives authorise capital and current expenditure to provide that something. Carry on thinking though that Apple's pile of billions of dollars in cash is a sign that they are embodiment of intelligent and productive capital investment.

Then what is it a sign of?

"People decide they want more of something, and their representatives authorise capital and current expenditure to provide that something."

If that were true, government wouldn't need to compel citizens. Demand tends to be met through voluntary exchange. Cheers.

How many APCs can the average person buy, though? Besides, there's the principal-agent problem. Think of voters as equity holders in a co-operative as well as consumers.

It's hard to find a country that became rich without making the demographic transition. China dramatically forced that transition and reaped the benefits.

Bullshit.
China's percentage of the population between 15 and 64 in 2010: 74% (peak)
In 1980: 60%.
Yup, that sure has "a lot to do with" a 21-fold increase in real GDP per capita.

Let's have a controlled experiment for Hausmann's hypothesis.

We will take half of his children, and let them go to college,

And, the other half will stop at high school.

Would he take the challenge?

Sheepskin effect may affect the fate of individuals, but not the fate of nations.

Nations are composed of individuals, grossed up, so to speak.

You don't get my point. Sheepskin may allow individuals to get ahead of other individuals. But it's not going to make a nation prosperous.

Well, compare nations then, and ask: What is the GDP per person with countries with high levels of educational attainment than those with lower levels of educational attainment. I know you will come back and say, the higher income nations are just spending it on luxury goods (e.g., education) and signalling (but to whom, Bangladesh?).

Schooling is not easy. Nor is having a medical procedure either. So I am always perplexed when people say making access to education or medical care is some luxury item people seek out because they like school exams and physical probing and surgery.

"What is the GDP per person with countries with high levels of educational attainment than those with lower levels of educational attainment."
-Correlation is not causation. Example: Philippines.
"I know you will come back and say, the higher income nations are just spending it on luxury goods (e.g., education) and signalling (but to whom, Bangladesh?)."
-No, you didn't, because that wasn't what I was about to say.
"So I am always perplexed when people say making access to education or medical care is some luxury item people seek out because they like school exams and physical probing and surgery."
-No. Employers like sheepskins and consumers of medical care like marginally higher lifespans (and, occasionally, expensive treatments for rare conditions).

Schooling can be very easy.
It certainly can be easier than the alternative.
My grandfather's eighth grade year was difficult.
My college freshman year was a breeze, and certainly easier than getting a job.

I'd like to see the same study based on actual skill sets, rather than just number of years in a seat.

Your argument is the textbook fallacy of composition.

Naw, its about the fallacy of individuals.

"Mommy, what's the composition fallacy?"

Ask Alex Godofsky, but then look at the real definition contained in my response below which uses the real definition and applies it to the facts showing that it is not a fallacy of composition to compare GDPs of countries with higher educational attainment with those with lower levels and lower GDP.

Bryan Caplan addresses this. In his "signaling model" for education, college raises incomes by providing a zero sum credential benefit to those that have credentials and hurt those that don't have them. In such a system it is wise for individuals to obtain the credentials, but such a system is harmful for society as a whole. In his "human ability model" which he does not believe, college completion actually generates improved productivity, and that system is beneficial to society as a whole.

If it's zero-sum, why is he so upset about it? Dozens of social phenomena are negative-sum, like the extent of gun ownership or alcohol use. Why not make an actual social improvement at the margin by propagandising against those phenomena?

Far more is spent on education than on firearms and alcohol combined. And Prohibition has been tried. Also, fewer guns do not automatically lead to less crime.

I have no urge to make sure I have N+1 guns if my neighbor has N guns.

In fact, I have no idea how many guns any of my neighbors have.

But when it comes to education, I'm very aware of the job credentials of my fellow candidates.

Holy Mackerel did Bill just fall flat on his face.

ladderff, Please explain. Harding claims that sheepskin effect effects individuals, but not nations. By sheepskin effect, I take it he means a college degree. When challenged that the cumulative effect of many persons having an education manifests itself in higher GDP per person than countries with lower educational attainment, he withdraws by arguing correlation is not causation, because he probably heard that phrase somewhere and it sounded good to him because he couldn't respond to the argument. But, then,someone comes on and says: fallacy of composition, which is probably a phrase they didn't understand any better than correlation is not causation, because the term fallacy of composition means: "one infers that something is true of the whole from the fact that it is true of some part of the whole (or even of every proper part)." when we were talking about overall educational attainment of a population and its related GDP per person. Never mind that no one responded to overall educational attainment, productivity, and relative GDP.

Anyway, I enjoy the loose use of language that seems to substitute for thinking.

Ipsi dixit, and all that stuff. It keeps you from responding to the argument so you can duck and cover.

Bill starts with this:

"Let’s have a controlled experiment for Hausmann’s hypothesis.
We will take half of his children, and let them go to college,
And, the other half will stop at high school.
Would he take the challenge?"

And then when challenged keeps digging himself in. It looks like Bill didn't like the argument, so he tried a personal attack. Hausmann's hypothesis, may or may not be correct, but Bill's "controlled experiment" was clearly not an argument in good faith.

Actually, if you believe what you say you should be willing to follow the prescription you propose as policy for others.

Bill, you're an idiot. See Massimo's reply to your comment.

E. I am sure your statement regarding idiocy reflects your personality, frustration and temperament in engaging in a thoughtful and empirically supported argument.

I don't see your "thoughtful and empirically supported argument", Bill.

The thought is that Haussman wouldn't apply his teachings to his own children.

Bill, how dense can you be?
Zero sum games can be good for the winner but not for society as a whole. The argument is that the above mentioned type of education is a zero sum game.
I don't know how to make it simpler than that.

Triclops, Competitive games, within a society, are zero sum games...if you wish to retain the status quo and the allocation of current income levels among those with education. I'm actually appalled by the comments in this thread. Go look at the NYT article referred to in my post below referring to the Decision Sciences article on social economic status (wealth or income, take your pick) and spending for children's education. Then, if you are curious do any research on income levels and education. Then, look at the OECD data on GDP and educational attainment.

For those commenters above, here is an OECD report on educational attainment at GDP growth:

"More than half of the GDP growth in OECD countries over the past decade is related to labour income growth among tertiary- educated individuals.
– Employers pay almost twice as much for a 45-54 year-old worker with tertiary education, than for someone without an upper secondary education.
– The most attractive wages for people with tertiary education are found in Australia, Austria, Ireland, Luxembourg, the Netherlands, the United Kingdom and the United States, where average spending power exceeds USD 40 000 per year"

Here is the link:
http://www.oecd-ilibrary.org/docserver/download/9612041ec015.pdf?expires=1433267642&id=id&accname=guest&checksum=5F72FA01D9DBF6AD2828B8F465A7098B

No you have to take 4 groups. All must be students projected to graduate college easily.

Group 1 Goes right to work without a degree after high school and starts earning.
Group 2 Gets a degree right out of high school and goes right work after high school and starts earning.
Group 3 Goes to college and get degree but must hide that fact and live as if they have no degree.
Group 4 Goes to college get degrees and then to work.

Wait a long time and compare life time earnings.

Wow what happened to my comment?

No you have to take 4 groups. All must be students projected to graduate college easily.

Group 1 Goes right to work without a degree after high school and starts earning.

Group 2 Gets a degree right out of high school and goes right work after high school and starts earning.

Group 3 Goes to college and get degree but must hide that fact and live as if they have no degree.

Group 4 Goes to college get degrees and then to work.

Wait a long time and compare life time earnings.

Let us remember that years of schooling cannot/should not be compared across different periods of time and different systems as an aggregate of any value. It is one indicator among many others.

The quoted article seems to be ignoring that 5 years of schooling in France in the first half of the century really meant something. The equivalent amount of schooling in, say, rural Cameroon barely equips children with basic calculus and reading skills. Half of that "schooling" will be sitting on the floor with no pens or paper in overcrowded rooms and the other half will be running errands for teachers, doing chores in the school yard or simply doing nothing due to high teacher absenteeism. No electricity back home, no assistance to help with any homework from largely uneducated parents, and probably a lot of work to contribute to the household. I've seen more than a few African kids in different countries reading their lessons under street lamps at peak mosquito hour in the 1990s/2000s. Some hardships French kids in the 1950s and 1960s clearly didn't experience in their limited years of education.

As a kid with 8 years of schooling in the late 1990s, I remember our math teacher testing us on an exam from the 1960s, meant for children with 3 years of schooling. Not *one* person in the whole class passed the exam–people who are now engineers, managers, etc. Cleary quality/density/relevant was higher a few years back. And don't get me rambling on Millenial interns these days...

Maybe a final example. One of my grandmothers had to stop school at 13 due to polio in the early 1940s. She entered the workforce as a secretary and had no issues whatsoever in the career–something only a whizzkid could achieve these days with only a few years of modern Western education.

As a kid with 8 years of schooling in the late 1990s, I remember our math teacher testing us on an exam from the 1960s, meant for children with 3 years of schooling

Sorry, not buying. I completed my 3d year of schooling in 1972. No, I was not proficient in elementary algebra. My sister completed her 3d year of schooling in 1964. She wasn't proficient in elementary algebra either (or were you future engineers learning your multiplication tables at age 14 in 1998??

Of course Daniel Patrick Moynihan pushed through the New Math in 1968, probably why you were not properly educated in algebra.

You're about five years off re the advent of 'New Math', and it was not taught in my elementary school, or in others in that set of suburbs. I think it was abandoned pretty quickly.

If Cameroonian children can do basic calculus after 5th grade, I'd say they're doing pretty good. Maybe they can tackle linear algebra in 6th grade.

I'd love to see this test for children with 3 years of schooling from the 1960s.

The idea that you cam measure an amount of education just by counting the years spent penned in a classroom is pretty laughable.

I had a similar reaction. As we've expanded access to education, we've been forced to water down the requirements.

Just look at the 8th grade exit exam from 1912. How many 8th graders would pass this test today? I'll bet this test would stump a lot of college freshmen.

http://www.huffingtonpost.com/2013/08/12/1912-eighth-grade-exam_n_3744163.html

It is surprising considering its a rural Southern county. If I'm not misunderstanding, it's more or less an entrance examination for the (selective) local high school. The town I grew up in had (prior to 1902) one public high school to serve a city of 150,000 (up north). I believe about 15% the youth therein were enrolled. It would have been higher in 1912, as secondary education was getting rapidly more prevalent. Still, this is likely not intended for ought but a modest minority to pass.

It is one of the (or THE) most commonly used approaches in econometric estimations which involve returns to education, etc., but ya, it's imperfections can be easily criticized.

The implication then is that econometric estimations of returns to education are probably worthless.

I enjoy the "this is standard in X" argument.

Tragically, it seems that "X = economics" is all too often the variant.

If you want to offer a critique of Eric Hanushek, you first need to learn to read his papers.

You alternatively ask the astrologers, or perhaps the 1960s Republicans.

I noticed that every year of elementary school had almost the same course content. So did junior high, high school and lower level university. Five years of schooling, properly done, is plenty.

I would wager that on average graduates of a Gymnasium or lycee are better educated than graduates of an American university.

And because its one of those days, a "Firefly" quote:

Jayne: Unable to get a neural...
Simon: Response.
Jayne: Response! Hell, I don't know. If I wanted schooling, I'd 'a gone to school.

Caplan's right. Time in school is not value added. However, there is substantial evidence that the Koreans dramatically improved in their school skills over the past half century.

You mean, on average, time spent on an average school does not add any value??? ... Caplan is NOT right.

Moreno, you misinterpreted my comment exactly 180 degrees backwards.

A broadly literate population has numerous advantages. We've seen a sharp decline in what Marx called "rural idiocy" -- the German phrase meant more like "rural isolation" but the common translation gets at something that barely exists anymore in much of the world.

This is certainly true, but how much has this helped, say, the Philippines? I believe it has had substantial benefits for the USSR and much of East Asia, but literacy alone must be complemented with changes in economic structure. Also, Black America isn't very literate:
http://www.act.org/newsroom/data/2013/pdf/profile/AfricanAmerican.pdf
Can this be called "urban idiocy"?

I think school helps people get to where they can read, write and do arithmetic and those skills are important to most everyone. A little algebra probably helps to. I think that the rest can be learned outside of school. My grand father evidently learned enough in one grade to continue to learn without more schooling but I would guess that somewhere between 3 to 6 years of schooling would yield enough school learning for most people. For scientists and engineers much more school probably benefits.

One could also argue that more schooling helps society to not miss as many late maturers. That is it might be difficult to see which 12 years should get the more schooling to become the scientists and engineers.

Yeah but how much is that access to better technologies driven by education? This argument basically boils down to an assumption that education only drives productivity gains to labor. That seems shockingly wrong.

So technology but not productive technology? Do you think kids these days are learning how to use twitter at school?

Take it from one who is not an Ivy Leaguer, but rather an autodidact far more educated than the typically IL grad: You cannot compete with those guys with an otherwise equivalent resume. I graduated from a pretty good school with a pretty good education and have compulsively self-educated ever since, and if it were up to me or someone else with exactly the same resume, there is about a 0% chance I'd get the job. The unspoken question would be "if you're so smart, why didn't you go to Yale?"

At a high level this may be just a waste of time and money, but all those participating in this are acting in their own rational self-interest. If my kid had the chance to go IL, there's no way I would give a lecture on the education bubble. I'd say go for it.

Economic models fail when real life calls in ? ....

For similar reasons, many successful men who made their fortunes in trade in the 1700s and 1800s found it a good idea to marry their kids into the aristrocracy, even though they surely had first-hand evidence that the aristocracy wasn't all that impressive overall.

Maybe the aristocracy was that impressive overall.

The reason was that the aristocracy wrote the laws. That's pretty advantageous.

And, as to comment further up, no, reading stuff after high school just isn't the same as going to university. Who examined you, you?

Who examines post-requirement doctoral candidates? By what magic does reading peer-reviewed articles grant knowledge to a man with a PhD but not that same man without one? Does sitting in front of a Professor at a community college give knowledge while passing a MOOC does not?

The unspoken question would be “if you’re so smart, why didn’t you go to Yale?”. That is not what they are asking. They probably realize you are smart, and that is not to your advantage. Employers care about intelligence up to a certain point, but for most jobs social skills are equally relevant. Ivy League grads are assumed to be people who know how to work the system, and know how to make useful social contacts. Autodidacticism is a Red Flag, indicating you care too much about knowledge for its own sake. Employers mostly look for useful, productive people, not brilliant dreamers.

"Autodidacticism is a Red Flag, indicating you care too much about knowledge for its own sake."

This view would seem to hold merit for those who have a generally cynical view of the world, but in my many years involved in hiring at several companies is not at all correct. It is true enough that companies care about more than just intelligence, and what other qualities they care about depend on the job, but I've never encountered one that actually placed a negative value on a person who studied to gain "knowledge for its own sake". Perhaps you have an anecdote to share, but those in charge of hiring generally just don't think that way, and, as individuals, may even consider such habits virtuous, regardless of whether it would actually be beneficial to the company.

To digress, I have a general hypothesis that cynics are inclined to err in their worldview because they are driven, at least initially, by a juvenile assumption that because cynicism is diametrically opposite of naivete--and who would want to be naive?--the cynical view equates to true wisdom. Please don't take this as a personal evaluation of yourself, Peter; perhaps you don't see yourself as a cynic, though your comment strikes me as such. This is more of a general observation that is simply tangentially related to your point.

I don't consider myself cynical at all. I have observed the hiring pratices in a number of corporations and management consultant firms, been involved in hundreds of hiring decisions, and I have heard managers many times refer to certain candidates as "egg-heads", "weird", "too intellectual", etc. If I strike you as cynical, it is because the majority of people I worked with in my career in the US tended to be reflexively anti-intellectual, and I learned to expect that that is the way business is done in the US. I suspect that start-ups, or simply smaller more entrepreneurial companies, probably do put a higher worth on intellectual initiative, and maybe that is where you worked. I have also seen many times that HR people tend to be more impressed by intelligence, and would probably respond positively to Dan, whereas the line managers just want someone who fits in and follows orders.

Economic models seem to fail when real life calls in...

The irony on top of all this, is that most of secondary education is actually making its students dumber. Most high schools start way earlier than the natural circadian rhythm of the typical adolescent. (Many schools starts at 7:30, whereas natural waking time for adolescents is probably 10:30 or later). The typical teenager is incredibly sleep-deprived. Modern research tells us that chronic sleep deprivation has a permanent cognitive impact component. And mostly this schedule exists simply to cram in more useless classes, like foreign languages, chemistry and trigonometry. Subjects that 95%+ of students will never use, and which mountains of educational research tells us has no general spillover effects to fluid intelligence.

You know, this starting time argument of schools is (anecdotally to me at least) quite plausible. I had the hell of a time during high school and college during the mornings, in a different country though. I am noticing that my kindergarten son also has a hard time getting up and focussing in the morning, even if he went to bed early the previous night.

"useless classes, like foreign languages, chemistry and trigonometry"

Ever want to do business abroad (foreign languages), discover new pharmaceuticals (chemistry) or invent the next greatest engineering feat at the sub-molecular level (trigonometry)? And never mind that they can be interesting too in understanding ,or accessing an understanding of, the world and nature.

So learn those things when they become necessary. Not before you know you'll need them. Excellent illustration of way education is overrated, you waste time learning things you'll never need....like French or us civics.

Language opens your mind. Civics is critical to a properly functioning democracy.

How about Facebook games as the point of criticism is you're really worried about kids wasting their time. But hey, that's their business they want to fill their minds with ad-filled thoughtless time killers.

@Nathan W.

"Civics is critical to a properly functioning democracy."

[Citation Needed]

Of these, only trigonometry should be taught before college.

Huh? Foreign languages are best learned the younger the better. And no chemistry in high school?

"Ever want to do business abroad (foreign languages)"

So teach everyone 4 semesters worth of Spanish, when maybe 1% of people will need 8 semesters worth and 99% of people will need 0 semesters.

"discover new pharmaceuticals (chemistry)"

Same

"or invent the next greatest engineering feat at the sub-molecular level (trigonometry)"

Hilarious

The alternative to a broad liberal education which prepares the student for diverse possible future economies would be for the government to try to micromanage the education system. But since they're still modelling minimum wage debates with two straight lines a lot of the time I think I'd rather put faith in the teachers, who almost always have the children's best interest at heart (and OMG even want to get paid for their efforts).

That is coursework for people on the right side of the Gaussian distribution. For everybody else, such courses are a complete waste of time.

Most people who work in high schools know that students are nowhere near 100% before 9:00. But most states require a certain number of hours every day and if you start at 9:00, you have to end close to 4:00. That would mean no 3-6 shift at the local supermarket or fast food place. It means school sporting events would be over well past 7:00 (the visiting team has to load their gear onto a bus, ride to the visiting field, and warm up before the contest can even start). So school has to end by 2:30, which means starting at 7:30.

Cutting the school day by an hour and a half might make sense but proposing it in 2015 is like proposing gay marriage in 1965.

Why not organize athletic clubs and have them practice on the week-ends? You could detach athletics from the school.

We played our inter-school sports on a Saturday: morning for rugby/football/hockey, most of the day for cricket. Except if we played a school so far away that the rugby etc had to move to the Saturday afternoon.

Shut up. The point is to bring more things into the school's ambit; not less.

I worked 4-9 shifts, which ended at 9:45, and football games lasted until 9:00, and wrestling meets sometimes had the bus arriving back at the highschool after midnight. We used to sleep in the locker room after we were excused from our useless classes.

Education is a necessary condition for growth, but it is not a sufficient condition.

http://www.nytimes.com/2015/05/13/business/economy/as-global-number-of-pupils-soars-education-falls-behind.html
As Global Number of Pupils Soars, Education Falls Behind
New York Times
May 12, 2015
Eduardo Porter

“We’ve made substantial progress around the globe in sending people to school,” said Eric Hanushek, an expert on the economics of education at Stanford University. “But a large number of people who have gone to school haven’t learned anything.”

Just as public health care isn't the same thing as health, perhaps public education is not the same thing as learning.

"China started with less education than Tunisia, Mexico, Kenya, or Iran in 1960, and had made less progress than them by 2010."

This seems like an error. Among other things, the country has very close to 100% literacy. Is it still using the education level of the entire population, which includes a barely-educated older generation?

China doesn't have many average years of education. Beginning in middle school, a substantial weeding out of the worst students begins.

My understanding is that it gets vocational-oriented in high school.

China has nothing close to 100% literacy. Literacy statistics in China are vastly inflated. Most Chinese can recognize the 2000 or so most common characters, but a significant percentage of the population struggles to read anything slightly sophisticated.

Of course, European literacy numbers seem to be inflated as well.

What is interesting is that considering how difficult the Chinese writing system is, the Chinese do not appear to be at any disadvantage to people with far more "sensible" writing systems like the Indonesians or Filipinos, or any Spanish speaking country.

That Chinese people do so well with their writing system tends to disprove the insistence on the phonics approach (which is flat-out impossiblility to use with Chinese ideographs)

Given the depth, and potential breadth, of meaning in many characters and the sheer number of characters to learn, I think that's reasonable enough since most people aren't reading classical works, specialized technical documents, etc. Given that many people have a hard time defining or deeply understanding a lot of the words they use (and here the appropriate comparison would be to focus on history of language, root meanings, etc., which is relevant to the way that language is taught in China), it is truly difficult to compare these statistics. This is most relevant for the younger generation, since illiteracy is prevalent among the older generation.

I've often wondered if there's an inverse element in education versus economic success, for the simple reason that in a bad economy, you end up with better teachers because there's not much else for them to do in the economy. So, you get stuff like academics with rockstar credentials teaching high school science in Russia, while you scrape the bottom of the barrel in economies where people with strong science backgrounds can get better jobs.

There's a related theory that part of the decline in American education (if there is one) is that in decades past if you were a smart, talented woman your only employment options were pretty much secretary, nurse, or schoolteacher. Now their options are of course much broader, and many very talented women are not teaching school.

About a quarter of the workforce was female in 1928. There are openings in professional-managerial employment which were not there in 1930 and some expansion in the dimensions of that stratum. However, as women moved into that stratum, men would have been pushed the next level down into generic salaried employment, including school teaching. (Nearly half the secondary teachers in this country are male). While we're at it, not much prevented a 'smart, talented' woman from opening her own business in 1928. My widowed great-great-grandfather took as his second wife a 42 year old merchant-spinster. That would have been in 1890.

The best Russian academics will be Russian academics, or overseas Russian academics. I really really doubt that Russian schools are awesome.

This has been been discussed more thoroughly and rigorously in a 2001 issue of World Bank Economic Review

http://wber.oxfordjournals.org/content/15/3/367.abstract

No need to reinvent the wheel..

First mover advantage? The French were part of a group of early industrializers who could engage in much learning by doing. Those African grades 8-ers now have to compete with nations and firms which have been at it for generations, making it much more difficult to leverage their education to high income.

I don't think you'd find a good statistical method to prove this, but assuredly it explains part of the anomaly.

China.

The country has an extraordinarily long history of advanced education, with the main difference is that access has been expanded to access for just about everyone in recent decades.

Another thing worth mentioning for the big difference is that teacher quality and the historical accumulation of ability/skill in educational institutions is quite high in France, whereas much of Africa is educated with under/unqualified teachers with little or no teaching materials in low quality learning environments and others. All of these would explain much lower results for a given number of years of education.

As long as you just assume it's true.

This phenomenon was covered in a chapter of William Easterly's "The Elusive Quest for Growth."

You can put children in school for years, but if there is not enough economic freedom to support high-productivity jobs for them, that education is useless. It might even be worse than useless, because then you have a lot of mad people who feel that they are educated and deserve a high-paying (high-productivity) job but they can't get one, and they can become violent (see Egypt for example). They may also leave your country for one with more economic freedom.

The other risk is that a government program to put kids into seats in schools for a certain number of years is unlikely to lead to any "education" if the country is already corrupt and has bad institutions. Teachers may just not show up some days, but still get paid by their friends in the government who gave them their jobs.

Finally if you are pulling kids who would otherwise be working into "education" (whether real or sham education), they will be producing less while they are in "school", further hurting the economy.

Egypt isn't China, but it has grown substantially over the past 40 years. Also, the number of educated people in Egypt is probably too small to support any revolution.

There was a revolution in Egypt just four years ago. It ran aground because the 'educated people' able to build popular appeal are also adept at playing incompetent and self-destructive loudmouths.

A 300-page examination of higher education in Egypt by the World Bank and Organization for Economic Cooperation and Development, published last year, noted "a chronic oversupply of university graduates, especially in the humanities and social sciences," mixed with complaints from business employers that they couldn't find workers with the skills they needed.

One in every seven college graduates in Egypt, Jordan and Tunisia is unemployed; many more are overqualified for the jobs they have.

The "dominant role of the public sector as an employer"—particularly in Egypt, but throughout the region—has inflated the graduates' wage expectations, put a premium on diplomas over useful skills and diverted talented workers from what might have been more dynamic private-sector enterprises, the IMF says.

Should be" The schooling myth?

BTW my grandfather came to the USA from Italy in his mid teens with 1 year of schooling. He eventually owned a barber shop and some real-estate and sent his son to Brown University. He would call certain people "male educato" which meant some thing different than in what it means in English and something that seems far more important to me. It does not mean that you did not go to the right schools. he in fact I think he seemed more educated that many college grads.

I think this is from a book by George Orwell: "He was an educated man, but not stupid."

I wonder whether “male educate” translates fairly well to the old expression "ill bred" i.e badly brought up, uncouth.

@dearime I believe that it is.

I think you should look at what wealthy parents choose for their children, and what the successive wealth effect is for education.

See this piece in Decision Science coupled with a recent NYT article on income inequality.

Here is the link: http://www.decisionsciencenews.com

OMG, how silly of this blog not to promote a response to this question at the margin!

You can be better- or worse-educated than the marginal worker, which is currently a factory worker in China but which was in Europe in the 1960s. If better, your country stands a good chance of retaining your economic performance (at the margin!) and getting a good income. I don't care how cool signalling is as a paradigm or how offended you get by clever feminists in universities, no-one is going to turn out well after six years in the US education system. Er, and GDP deflators are problematic.

Um, and finally it's not an excellent column because the argument is: "Education isn't very important, something else is, let's do the something else". But he doesn't tell us what something else is, so why should we stop worrying about education?

Yeah, that's the same argument the medical establishment made against Semmelweiss.

Nope! Semmelweiss said we should do something and he knew what it was. Hausmann is saying we should do something but he doesn't know what it is and doesn't have any empirics and one senses he doesn't care much.

"In 1960, countries with an education level of 8.3 years of schooling were 5.5 times richer than those with 2.8 year of schooling. By contrast, countries that had increased their education from 2.8 years of schooling in 1960 to 8.3 years of schooling in 2010 were only 167% richer."

If statistics such as these had any validity, the central planning of the Soviet Union would have worked out just fine. These numbers are meaningless BS.

Education Realist must be offline today.

Better educated women eventually won't have the huge numbers of children like we're seeing in much of sub-Saharan Africa today. If we want to save Europe from becoming a banlieue of Africa by being overwhelmed by the 4.2 billion Africans the UN is predicting for 2100, we need more literate, sophisticated women in sub-Saharan Africa.

Better educated women eventually won’t have the huge numbers of children like we’re seeing in much of sub-Saharan Africa today.

The typical African woman has about 5 children throughout the of her life (a metric which is declining). My great-grandparents grew up in families which averaged 6 or 7 (two in farm families, and two in families which mixed farming with other pursuits, four in non-farm families). As recently as 1960 women in Quebec generally produced 4 children.

You're not in much danger of chain-migration from Africa if European governments deploy a coat guard.

I think it is perhaps a bit backwards here. Perhaps education is a *cost* of development, not a cause of it.

Consider this, let's say you have a kid at 22, at 26 he is 4 years old and time for Kindergarten. 14 more years and the kid is being watched in a supervised setting for a good chunck of the day. That works out pretty nice if you have to, say, do a shift at a big factory or work in a big company. It also acclimates your child to playing/hanging out with non-family members during the day...making friends and getting along with them. Just like we do when we go to our own daily real life version of The Office.

China also started right next to Taiwan and Hong Kong.

As Taiwan's labor became expensive, Taiwanese factory owners would invest in Taiwan. They already had contacts with overseas markets and had the know how.

Imagine a poor America next to a rich Canada, with Canada being an export powerhouse to Europe.

I also suspect years of education does not equal actual education.

I read Hausmann's text and I didn't find any distinction between preschool (3-5 years old) and primary/elementary school (6-12 years old). I'm pretty sure the 1965 France statistic counted only primary school years, that means schooling you receive after 6 years old. Hausmann is not clear buy I assume 2010 statistics include preschool + primary school years. That's not apples to apples comparison.If you include preschool in schooling years you get at least 2 years extra of average schooling with little gain in productivity. I remember reading about the spread of preschool. It's a thing from late 60s or early 70s.

This is from quoted Lant Pritchett article: "13. For instance, Behrman and Birdsall (1983) have shown, for Brazil, that not controlling for school quality leads to overestimating the impact of years of schooling by a factor of two" Thus, that explains the increase of schooling years with no income increase.

Very stupid to take from this piece "Hey education provides no boost to growth". Stuff like this is a menagerie of competing, conflicting, interdependent factors that wave in and out of manifestation.

For example, China growing faster than other countries with less education in no way demonstrates that educated labor forces do not boost growth by any amount under any circumstances. It only demonstrates that having more education than some other country does not boost growth by more than all other factors combined in all circumstances.

China is a great outlier to screw up basically any theory of growth except the theory that made China specifically grow so much. If I had to guess, I'd say these factors were a) size b) fairly unchallenged total political stability post-Mao (relative to other developing countries) c) incredibly low starting point d) proximity to other fast-growing post-industrializing Asian nations e) size.

Another example is re France. Noting that other countries never caught up to France in wealth when they caught up in education doesn't demonstrate that education is useless. It may hint that it's a lot more economically useful to be part of a tiny minority of the world with a highly educated labor force than to be part of a global well-educated majority.

As always, position and proportion is everything.

None of the above means I agree with the idea that the US workforce needs more education to get ahead. I don't. The market is saturated.

Quality ? Difficult to measure and difficult to improve. One year of schooling in Palo Alto is not equivalent to a year in an interior rural school in Sub Saharan Africa.

Like everyone says, educational effectiveness varies and years of schooling probably just isn't that good a measure of education. Measures like PISA are better, but how much have they been used?

Plus, in countries like China, I bet a lot of skill acquisition happens "on the job", so people are more skilled than their educational ability suggests.

But yes, other factors clearly matter compared to individual level education. Who would ever think otherwise?

This is all in Hausmann's column of course.

Personally though, I will always defend more education on the basis that people *should* know about chemistry and literature and maths and all those wonderful things even if it does absolutely nothing for economic growth.

People in a society are not *for* economic growth, after all. Rather economic growth is *for* people, and if education constitutes a good for people that is not captured by economic growth, so much the worse for economic growth.

Education is essentially for a society of people who are not ignorant (or less ignorant to paraphrase a blog title), not economic growth.

And it's certainly not to "win" the Grand Game of Nations and Cultures and Empires. Or to generate perfect little German soldiers who'll run at ten pounder guns when they get told to.

Personally though, I will always defend more education on the basis that people *should* know about chemistry and literature and maths and all those wonderful things even if it does absolutely nothing for economic growth.

I don't know how high you're setting the bar but I expect it's in the same upper tier which you inhabit. For a certain level of intelligence, like yours, those subjects are fine and interesting. For young people further left on the bell curve, they are torture. Not just hard or tedious, but torture.

Also, a looming problem: whose literature? And in which language?

There is really no education myth, but it’s self created and if we want to gain real success then we must be willing to work hard and gain proper education. I have already learned a lot from Baby Pips and now I regularly participate on cTrader demo contest with OctaFX, it allows me to earn extra cash by winning the contest with 150 prizes on the line. Also, it is a weekly contest so I can participate on there very often and get the rewards.

A bunch of education industry employees debating the value of their product...that's rich.

I imagine that they know the value of their services, which goes well beyond simply inculcating workplace skills and strays well into good citizenship, etc., far better than a lobbyist or farm operator.

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