Monday, October 19, 2015

The Market Gods In Education

This post on Eschaton  made me think of the way the market gods are usually worshipped*  among conservatives, except when it comes to education.  There the conservatives look at the  situation cross-eyed, arguing BOTH that the markets should provide the remedy** AND that it's fine to cut teachers' retirement benefits and pay and to demonize teachers with no effect at all on how many people want to become teachers or what the quality of their preparation might be.

But anyone who has taken even one economics course (the most dangerous amount to take, by the way, is one course) knows that if you lower the monetary benefits of a job and also make it psychologically less appealing you are going to get a drop in the numbers of people who want to do it.  That's where we seem to be heading right now.

The expected market response to a drop in the supply of teachers would be a rise in average salaries.  The snag in education markets is that the demand side (those who hire teachers) tends to consist of various public sectors, and when the politicians in power (Republicans, say) refuse to pay teachers enough all sorts of alternative tricks are attempted.  Those includes outsourcing most everything.  Somehow that's supposed to work like a magic pill, creating schools where students are well taught by minimum wage teachers.

To properly write about the markets for education takes more space and time than one post can command.  But as a very short summary, the characteristic of basic education itself*** make it a poor candidate for unregulated private markets and also explain why education is frequently provided in not-for-profit settings.  At the same time, those who plan to work in the field do respond to market initiatives: pay, benefits, hours, reputation etc.

There is no miracle pill which could be force-fed to schools which are in trouble.  Those schools, the ones serving unprivileged children with many problems, need much more resources and attention than other schools.  Indeed, a logical system would pay the teachers in at-risk schools a lot more than the average teacher pay.  -------
*I want to write it with two ps, because it sounds more like adulation that way.

** The remedies, such as charter schools etc., have serious problems when cream-skimming (picking the students most likely to succeed) is a real possibility and when the more expensive students (those with more trouble) can always be returned to the public schools which must accept them. Voucher proposals assume that all parents have the same geographical access to the same spread of school quality.  It also assumes that parents can judge how good the schools are.  Finally, the voucher programs can also suffer from the cream-skimming problem and from the difficulty public schools have in not being able to refuse certain students.

***Some aspects of education which make markets less able to produce good results (especially without that not-for-profit status and government regulation etc.):
-  Many of the benefits from basic education fall not on the students and their families but on the overall society.  That part has a public good aspect, and private markets tend to under-produce those types of benefits.
-  The final quality of education, the "product," if you like, is created in cooperation between the students and the system teaching them.

Because of the intimate involvement of what we'd call "the customers" in the production process of education, it matters that children enter the system with very different preparations, family backgrounds, levels of deprivation and so on.

An apparently good education outcome could be caused by not good teaching but by hand-picking students who have few problems and are well prepared.  Likewise, an apparently poor education outcome could, in fact, disguise great teaching efforts, covered up by the very large prior deficiencies of the students.

These aspects make it hard to judge how good an education a particular institution gives.  To take an example from higher education, sure, Harvard University is a great place to get your degree.  But some part of its greatness surely comes from the way it picks its students.

- Finally, to measure and compare the outputs of educational institutions is very difficult.  That's because ideally we'd need some multi-dimensional indicator which could capture all the relevant before/after changes in a student.  We don't have such an indicator, and almost all the short-run proxy measures (eg. test scores) suffer from being very partial and from being rather easily influenced in ways which might not correlate with the real quality of education we wish to measure. 

Because it is hard to measure the output of education "firms," unscrupulous individuals could exploit that to short-term benefit by funneling money out of the schools or by using money in ways which don't help the actual quality of education.  That risk is somewhat greater in for-profit firms than in not-for-profit firms because the latter don't have shareholders as such.