The Education Game

We were raised to be very conscious of formal education and to value it.  A good degree is a ticket, a passport as well as an insurance policy.  I thought that the ‘West’ was a bit too obsessed with formal education until I moved to Asia.  Last month, there was an article in the Economist on South Korea that I think would equally apply to other countries in the region.

As most of us would guess, South Korea comes at or near the top of most international comparisons of reading, maths and science.  But the article is at pains to point out the costs.  Much effort goes into costly credentialism, rather than deep learning.  Furthermore, the system excludes late-developing talent and the expense of educating children is one reason why South Korean has a worryingly low birth rate.  Of course, other education-obsessed countries in Asia face similar problems.  In fact, past South Korean governments tried to help parents by banning out-of-class tutoring with the President of Seoul National University resigning after letting his own child dodge the ban.  In the end, the prohibition was ruled unconstitutional in 2000. 

With 3 sons, I spend more than my fair share of time deciphering the rankings and trying to identify potential paths for the boys.  Here in Singapore however, I have been unsuccessful in finding the equivalent in the UK’s Ofsted or Financial Times ranking of high schools.  I especially like the Financial Times ranking of Independent schools which even has the percentage of graduates who progress to a “world ranked university”.  One thing that some of the rankings suggest is that a higher price does not necessarily equate with better outcomes. 

I get nervous when I read research from academics who point to the role that education plays in rising social inequality in the US and the UK in particular.  An August 15th article in the FT reminds us that the income share of the top 1% has roughly doubled in the US since the early 1970s, and is now about 20%.  An expert on intergenerational income mobility remarked that the painful truth is that in the most unequal developed nations – the UK and the US – the intergenerational transmission of income is stronger.  This contrasts with more equal societies such as Denmark, where the tendency of privilege to breed privilege is much lower.  So the more unequal our societies become, the more we all become prisoners of that inequality.  The well-off feel that they must strain to prevent their children from slipping down the income ladder.  The poor see the best schools, colleges, even art clubs and ballet classes, disappearing behind a wall of fees or unaffordable housing.

I think that part of the problem is a decline in the number of opportunities for graduates which leads to greater competition for fewer jobs.  Take law for example.  There have been many articles commenting on the legal fraternity in the US with even President Obama getting involved.  Regardless, In June, the legal services sector lost more than 3,000 jobs and according to Bureau of Labor Statistics data, the sector gained only 1,000 net jobs since June 2012.  In June and July 2013, 6,000 positions disappeared but a law schools business model generally focuses on filling classrooms, regardless of whether students will ever be able to repay their six-figure educational loans.  An article in the Business Insider explains that this is because most tuition revenue comes from federally guaranteed loans that survive bankruptcy, so schools have no financial incentive to restrict enrollments — that is, until they run out of applicants.

Today I was reading the latest edition of a magazine published by the American Association of Singapore which referenced work done by Stacy Berg Dale and Alan B. Krueger.  In short, their research argues that elite colleges did not seem to give most graduates an earnings boost.  This is because stats that show that graduates of elite colleges make more money than graduates of less elite colleges, do not control for the colleges that students applied to and were accepted to.   So once these two economists added these new variables, the earnings difference disappeared.  In fact, it went away merely by including the colleges that students had applied to — and not taking into account whether they were accepted.   A February 2011 article in the NYT summarizes it as follows - a student with a 1,400 SAT score who went to Penn State but applied to Penn earned as much, on average, as a student with a 1,400 who went to Penn.  Kruger explains that “Even applying to a school, even if you get rejected, says a lot about you.”  He also points out that the average SAT score at the most selective college students apply to turns out to be a better predictor of their earnings than the average SAT score at the college they attended.

The NYT article did note however, that that a few major groups did not fit the pattern: black students, Latino students, low-income students and students whose parents did not graduate from college.  Krueger says that “For them, attending a more selective school increased earnings significantly.”   Why? Perhaps they benefit from professional connections they would not otherwise have.  Perhaps they acquire habits or skills that middle-class and affluent students have already acquired in high school or at home. 1040 form Singapore

I am glad that I stumbled across that article from the American Association of Singapore now.  Krueger said it quite well.  He is quoted as saying –
“My advice to students: Don’t believe that the only school worth attending is one that would not admit you. That you go to college is more important than where you go. Find a school whose academic strengths match your interests and that devotes resources to instruction in those fields. Recognize that your own motivation, ambition and talents will determine your success more than the college name on your diploma.”

My next chat with my sons will be a bit different I think. 

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