Category Archives: Economics of Education

Velasquez-Manoff on Causal Density

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From An Epidemic of Absence.

The scientific method that had proven so useful in defeating infectious disease was, by definition, reductionist in its approach. Germ theory was predicated on certain microbes causing certain diseases. Scientists invariably tried to isolate one product, reproduce one result consistently in experiments, and then, based on this research, create one drug. But we’d evolved surrounded by almost incomprehensible microbial diversity, not just one, or even ten species. And the immune system had an array of inputs for communication with microbes. What if we required multiple stimuli acting on these sensors simultaneously? How would any of the purified substances mentioned above mimic that experience? “The reductionist approach is going to fail in this arena,” says Anthony Horner, who’d used a melange of microbes in his experiment. “There are just too many things we’re exposed to.”

In an essay over ten years ago, I wrote,

E.D. Hirsch, Jr., writes, “If just one factor such as class size is being analyzed, then its relative contribution to student outcomes (which might be co-dependent on many other real-world factors) may not be revealed by even the most careful analysis…And if a whole host of factors are simultaneously evaluated as in ‘whole-school reform,’ it is not just difficult but, despite the claims made for regression analysis, impossible to determine relative causality with confidence.”

In the essay, my own example of a complex process that is not amenable to reductionist scientific method is economic development and growth. In that essay, I also provide a little game, like the children’s game “mastermind,” to illustrate the difficulty of applying reductionism in a complex, nonlinear world. Try playing it (it shows up better in Internet Explorer than in Google Chrome).

The phrase “causal density” is, of course, from James Manzi and his book, Uncontrolled.

Caroline Hoxby on Education

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She writes,

(1.) A teacher who is in the top 10 percent of the current distribution of value-added raises student achievement by several times what a teacher in the bottom 10 percent does.

(2.) If all US teachers had value-added equal to what the current top 10 percent has, the average American student would achieve at the level of students whose parents have incomes in the top 10 percent of the family income distribution. This is approximately equivalent to the level at which the average student in Singapore achieves.

Clearly, this contradicts my null hypothesis, which is that there is no intervention that can achieve a significant, durable, replicable impact on student outcomes.

She also favors choice and competition, as well as attempts to introduce technology in a cost-effective way.

Perhaps most interestingly, she begins the essay by saying that she is describing what might be feasible ideally, not with what the political system is likely to produce. Implicit in this view is that the political process is likely to be distorted by interest groups. This is something that progressives tend to ignore when they advocate for government playing a larger role in education, health care, and so forth.

The Establishment View of Higher Education

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Suzanne Mettler writes,

Tougher regulations of the for-profits, long overdue, are the quickest way to help the poorest Americans who seek college degrees. States, too, should be held accountable; a perverse incentive permits them to gain more in federal student aid if they commit less of their own resources to helping poorer students. Nonprofit schools must also be responsible partners with government in furthering opportunity. Lawmakers should curtail the money we spend on tuition tax policies and for-profits, and invest more in Pell grants and community colleges.

She views the problem in higher education as one of distribution. In Three Languages of Politics terms, she implies that for-profit schools and conservative politicians are the oppressors, and lower-income youth are the oppressed.

My own view is that we are sending many students to college who are not prepared for the traditional liberal-arts college. From a public policy perspective, this is banging your head against the wall. I would not defend current policy in higher education, but I think that investing more in Pell grants and community colleges would not lead to different results.

Pointer from Mark Thoma.

MOOC spelled backwards

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Hollis Robbins writes,

Thousands of qualified, trained, energetic, and underemployed Ph.D.s are struggling to find stable teaching jobs. Tens of thousands of parents are struggling to pay for a good college education for their children. Home-schooling at the secondary-school level has proved itself an adequate substitute for public or private high school. Could a private home-college arrangement work as a kind of Airbnb or Uber for higher education?

Read the whole thing. Pointer from Tyler Cowen.

I could do this. I could easily teach college-level courses in economics, statistics, history, and philosophy. This would be the opposite of Massive Open Online Courses. It would be College Of One Mentor, or COOM. As Robbins points out, higher education used to work this way.

Education does appear to be ripe for unbundling and disintermediation. However, just as with banking, there is a tight link between education and the state.

Unbundling Higher Education

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Jose Ferreira writes,

Originally, the university bundle included courses, food, and board. Over time they’ve added more services, at first academic (extracurriculars, better libraries) and now luxury (rock-climbing walls, European-style bistros).

Higher education is still trending towards increasing bundle size. The more they bundle, the more they can raise prices. So when, if ever, can we expect higher ed to start trending in the other direction, towards unbundling?

My guess is in about five years, plus or minus. The forces that will make it inevitable are picking up steam right now.

He also points to this post.

Bundling has been the primary way universities have managed to avoid the cost/benefit analyses consumers make for virtually every other purchase decision. Just as it has for music, unbundling would dramatically reduce per student revenue in higher education. In microeconomic terms, bundling captures surplus for producers. Unbundling moves some of that producer surplus to consumers and may create new consumer surplus.

As I watch the world of online YouTube lectures emerge, it strikes me that it is not a good idea to think in terms of one teacher providing a lot of lessons (Sal Khan started that way, but I don’t think that most of his lessons will still be watched in ten years, and my guess is he would not disagree).

Instead, you should focus on what you teach really, really well. If you are a guitar teacher, and you are really good at bluesy hammer-ons, then that you should focus on those. If you are really good at double-string lead guitar solos, then you should focus on those.

In economics, if you teach comparative advantage really well, then do that. If you teach the Coase Theorem really well, then teach that.

For example, of all my high school teaching videos, the ones that are most viewed are “calculating p-values on the TI-84,” “Z test and t test,” and “joint probability.” My most popular AP economics video is on “Substitutes and complements.” I would not have guessed that these were my strong suits (actually, joint probability is something I think I do well), but for now, that is what the market says.

Evidently, the market is not impressed with my talks on market structure in econ or my talks on doing calculations with the normal distribution. Somebody out there must be doing that stuff better.

Think in terms of a future in which all that survives of all of your lectures is only the best 20 minutes, covering a total of one or two topics.

John Cochrane on Online Teaching

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He writes,

Don’t dream of doing a mooc on your own. You need video and IT help. Most of all, you need pedagogical help, people who keep up with the fast-evolving art of how to successfully port classes on moocs. I had that help at the University of Chicago, and it saved me from horrible beginner blunders. Example: I wanted to tape my live classes. No, Emily, who was in charge of my class, insisted that we do it months ahead of time in 5-8 minute segments.

In fact, it takes considerable time and effort to come up with an effective, compelling short video. A typical lecture is way too long and way too boring to translate into the online world. One of the leading MOOC suppliers offered a statistics course in which the professor opened up with a 20-minute lecture on histograms. I have to assume that the course was a total failure. As Cochrane puts it,

no question about it, the deadly boring hour and a half lecture in a hall with 100 people by a mediocre professor teaching utterly standard material is just dead, RIP. And universities and classes which offer nothing more to their campus students will indeed be pressed.

One of Cochrane’s main points is that online education really underscores the fixed cost in lesson preparation. Consider that it probably takes much more work to create an effective online lesson than it does to put a lesson in the form of a textbook. Yet anyone who has ever written a textbook can tell you that it is difficult and painstaking, so imagine what it would take to do an entire online course as well as you possibly could.

I believe that it is unlikely that any one person can create an entire course as a MOOC using today’s tools and make anywhere close to the best use of the online medium. Perhaps the tools will get much better. But meanwhile, I would recommend that would-be online instructors focus on producing really good lessons, as opposed to entire courses.

Suppose you can produce ten high-quality lessons of 8 minutes or less. This may take hours and hours of planning, scripting, editing, and so on. It will not cover an entire course. But if you then combine it with other lessons that are available on line, you can cobble together a high-caliber course. That is one scenario for how online education might develop over the next few years.

Trends in Faculty and Administration

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Timothy Taylor comments on a recent report.

When it comes to employment, colleges and universities have tried to hold down faculty costs in dealing with the expanding numbers of students by the use of time-contract faculty and part-timers. The nonprofessional staff are dealing with the increased number of students by using improved information technology and other capital investments, without a need for a higher total number of staff. But the number of professional staff is rising, both in absolute terms and relative to the number of students…

I’ll only add that institutions are defined by their people. As the full-time and tenured faculty become a smaller share of the employees of the institution and the professional administrators become a larger share, the nature and character of the institution inevitably changes. In this case, colleges and universities have become less about faculty, teaching, and research, and more about the provision of professional services to students and faculty. As far as I know, this shift was not planned or chosen, and the costs and benefits of such a shift were not analyzed in advance. It just happened.

My comments:

1. Perhaps this parallels shifts in other sectors of the economy. That is, we have fewer front-line production workers and more people working on building organizational capital.

2. The value of the organizational capital provided by non-teaching staff in education seems particularly nebulous because the measure of value in education is particularly nebulous.

3. In other sectors, the number of production workers per unit of output probably is falling faster than in higher education.

4. In other sectors, information technology has had more profound effects on the process of providing goods and services. People suspect that bigger changes are in store in education, once people figure out the best ways to apply information technology. I offered my guesses here. Some of these possibilities could lead to a dramatic reduction in the number of professors per student and also in the number of professors per organizational-capital builder in education.

Statistics vs. Calculus in High School

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From a podcast with Russ Roberts and Erik Brynjolfsson (the guest):

Guest: My pet little thing, I just wanted to mention, is I’m not as much of a fan of calculus as I once was, and I’m on a little push in my high school to replace calculus with statistics. In terms of what I think is practical for most people, with the possible exception of Ph.D. economists: calculus is just widely needed. But that’s sort of a tangent. Russ: Well, it’s interesting. My wife is a math teacher, and she is teaching a class of seniors this year, split between calculus and statistics, for one of the levels of the school. And statistics is–I agree with you. Statistics is in many ways much more useful for most students than calculus. The problem is, to teach it well is extraordinarily difficult. It’s very easy to teach a horrible statistics class where you spin back the definitions of mean and median. But you become dangerous because you think you know something about data when in fact it’s kind of subtle. Guest: Yeah. But you read newspapers saying–I just grimace because the journalists don’t understand basic statistics, and I don’t think the readers do either. And that’s something that appears almost daily in our lives. I’d love it if we upped our education in that area. As data and data science becomes more important, it’s going to be more important to do that.

Most of the discussion concerns the new book The Second Machine Age, or what I call “average is over and over.”

Two Interesting Abstracts of NBER Papers

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1. Philip J. Cook and many co-authors write,

This paper reports on a randomized controlled trial of a two-pronged intervention that provides disadvantaged youth with non-academic supports that try to teach youth social-cognitive skills based on the principles of cognitive behavioral therapy (CBT), and intensive individualized academic remediation. The study sample consists of 106 male 9th and 10th graders in a public high school on the south side of Chicago, of whom 95% are black and 99% are free or reduced price lunch eligible. Participation increased math test scores by 0.65 of a control group standard deviation (SD) and 0.48 SD in the national distribution, increased math grades by 0.67 SD, and seems to have increased expected graduation rates by 14 percentage points (46%). While some questions remain about the intervention, given these effects and a cost per participant of around $4,400 (with a range of $3,000 to $6,000), this intervention seems to yield larger gains in adolescent outcomes per dollar spent than many other intervention strategies.

2. Daron Acemoglu and many co-authors write,

An increasingly influential “technological-discontinuity” paradigm suggests that IT-induced technological changes are rapidly raising productivity while making workers redundant. This paper explores the evidence for this view among the IT-using U.S. manufacturing industries. There is some limited support for more rapid productivity growth in IT-intensive industries depending on the exact measures, though not since the late 1990s. Most challenging to this paradigm, and our expectations, is that output contracts in IT-intensive industries relative to the rest of manufacturing. Productivity increases, when detectable, result from the even faster declines in employment.

Links to ungated versions would be appreciated.

UPDATE: Cook here, Acemoglu here.

Explain This

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Jaison R. Abel, Richard Deitz, and Yaqin Su write,

the broader V-shaped pattern in the underemployment rate over the past two decades is also consistent with new research arguing that there has been a reversal in the demand for cognitive skills since 2000. According to this research, businesses ramped up their hiring of college-educated workers in an effort to adapt to the technological changes occurring during the 1980s and 1990s. However, as the information technology revolution reached maturity, demand for cognitive skill fell accordingly. As a result, during the first decade of the 2000s, many college graduates were forced to move down the occupational hierarchy to take jobs typically performed by lower-skilled workers.

They refer to a paper by Beaudry, Green, and Sand.

This is an important observation. Some possible explanations:

1. The empirical finding is mistaken. If you do the analysis correctly, the demand for cognitive skills has not reversed. Perhaps jobs that are classified as not requiring a college degree in fact have become much more cognitively challenging. [note: I am not claiming that the empirical analysis is incorrect. I just want to include that as a possibility.]

2. Assume that the distribution of jobs in terms of skill requirements has remained approximately fixed. Assume, perhaps reasonably, that college selects students on the basis of cognitive ability, but it does nothing to change the distribution of skills or ability. As more students go to college, this means more low-ability students go to college, and they wind up in the same jobs that they would have obtained without going to college.

3. There has been an actual deterioration in the quality of college education, at least relative to the needs of employers. An individual who graduated in 1995 was more likely to have gained skills in writing and thinking than if that same individual had graduated in 2005.