America has too many teachers

President Obama said last month that America can educate its way to prosperity if Congress sends money to states to prevent public school layoffs and "rehire even more teachers." Mitt Romney was having none of it, invoking "the message of Wisconsin" and arguing that the solution to our economic woes is to cut the size of government and shift resources to the private sector. Mr. Romney later stated that he wasn't calling for a reduction in the teacher force—but perhaps there would be some wisdom in doing just that.

Since 1970, the public school workforce has roughly doubled—to 6.4 million from 3.3 million—and two-thirds of those new hires are teachers or teachers' aides. Over the same period, enrollment rose by a tepid 8.5%. Employment has thus grown 11 times faster than enrollment. If we returned to the student-to-staff ratio of 1970, American taxpayers would save about $210 billion annually in personnel costs.

Or would they? Stanford economist Eric Hanushek has shown that better-educated students contribute substantially to economic growth. If U.S. students could catch up to the mathematics performance of their Canadian counterparts, he has found, it would add roughly $70 trillion to the U.S. economy over the next 80 years. So if the additional three million public-school employees we've hired have helped students learn, the nation may be better off economically.

To find out if that's true, we can look at the "long-term trends" of 17-year-olds on the federal National Assessment of Educational Progress. These tests, first administered four decades ago, show stagnation in reading and math and a decline in science. Scores for black and Hispanic students have improved somewhat, but the scores of white students (still the majority) are flat overall, and large demographic gaps persist. Graduation rates have also stagnated or fallen. So a doubling in staff size and more than a doubling in cost have done little to improve academic outcomes.

Nor can the explosive growth in public-school hiring be attributed to federal spending on special education. According to the latest Census Bureau data, special ed teachers make up barely 5% of the K-12 work force.

The implication of these facts is clear: America's public schools have warehoused three million people in jobs that do little to improve student achievement—people who would be working productively in the private sector if that extra $210 billion were not taxed out of the economy each year.

We have already tried President Obama's education solution over a time period and on a scale that he could not hope to replicate today. And it has proven an expensive and tragic failure.

To avoid Greece's fate we must create new, productive private-sector jobs to replace our unproductive government ones. Even as a tiny, mostly nonprofit niche, American private education is substantially more efficient than its public sector, producing higher graduation rates and similar or better student achievement at roughly a third lower cost than public schools (even after controlling for differences in student and family characteristics).

By making it easier for families to access independent schools, we can do what the president's policies cannot: drive prosperity through educational improvement. More than 20 private-school choice programs already exist around the nation. Last month, New Hampshire legislators voted to override their governor's veto and enact tax credits for businesses that donate to K-12 scholarship organizations. Mr. Romney has supported such state programs. President Obama opposes them.

While America may have too many teachers, the greater problem is that our state schools have squandered their talents on a mass scale. The good news is that a solution is taking root in many states.

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The Future of Online Education: Three Competing Perspectives

Bryan Caplan

Amazon put Borders out of business.  Is online education going to do to the same to brick-and-mortar colleges?*  Reflecting on earlier conversations with Arnold, I've realized that there are three competing perspectives with three competing predictions.

Perspective #1: Human capital model. 

Analysis: The point of college is to teach marketable skills.  Online education will soon be able to teach marketable skills as effectively as brick-and-mortar schools at a tiny fraction of the cost. 

Prediction: Online education will soon have roughly the same wage premium as brick-and-mortar colleges, and rapidly drive these high-cost dinosaurs into bankruptcy. 

Perspective #2: Status good model. 

Analysis: Online education will soon be a great way to teach marketable skills.  But colleges are primarily places where young elites (and their tuition-paying parents!) bond.  In Arnold's words:

[G]oing to a top college today is like belonging to the right church in 1850 or the right country club in 1950. When you are supplying a status good, ostentatiously wasting money on buildings can increase demand.

Prediction: Brick-and-mortar colleges are here to stay.  However, online education will easily compete for the segment of students who only want to acquire marketable skills.  Students who opt for online education will earn a wage premium comparable to that of brick-and-mortar grads.

Perspective #3: Signaling model.

Analysis: Brick-and-mortar colleges are primarily places where students signal a combination of intelligence, conscientiousness, and conformity.  Online education suffers from a severe adverse selection problem, because the students most eager to avoid traditional education tend to be deficient in one or more of these traits - especially conformity to the established social norm that young people should go to a traditional college.

Prediction: Brick-and-mortar colleges are here to stay.  Online education may be a niche good, but the labor market will usually penalize its graduates with a low wage premium.

I hasten to add that these are three polar cases; I'm happy to admit that each is partly true.  The real question is the weight each perspective deserves.  My rough guess is 20% for human capital, 10% for status good (though more at elite colleges), and 70% signaling.  I encourage critics to provide alternate breakdowns.

My implied prediction: brick-and-mortar colleges will probably experience a slight decline in coming years, and the wage premium for online grads will probably slightly rise.  In the absence of big changes in government policy, however, higher education isn't going to change much.  Old-fashioned colleges will stay in business, and the labor market will continue to heavily favor their graduates.

* When I talk about "online education," I don't just mean students at existing brick-and-mortar colleges taking some classes from their dorm rooms.  I mean students enrolling in virtual colleges instead of physical colleges.

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100 more free schools approved as British educational revolution continues

The state’s monopoly on education is being smashed as groups of teachers, parents and businesses line up to open dozens of ‘free schools’.

David Cameron and Education Secretary Michael Gove yesterday announced that 102 new schools – freed from local authority control but funded by the taxpayer – have been approved.

The Prime Minister said they would open ‘in September 2013 and beyond’, while 50 already in the pipeline will open this September.

The latest approvals bring to almost 200 the total number of primary and secondary free schools, which ministers hope will be as transformative as grammar schools were in the 1950s and 1960s.

Mr Cameron said the Government’s reforms were using ‘competition to drive up standards across the system’.

More than half of the approved applications are from teachers, existing schools or educational organisations who want to run new state schools themselves.

They include a secondary school to be run by a group of teachers from the Cuckoo Hall Academy chain, based in a deprived area of North London, and a primary school in Manchester led by the group responsible for the Big Issue in the north of England.

Other specialist free schools will include one in South London for vulnerable pupils, including teenage mothers and children expelled from mainstream schools; a sixth-form college in East Manchester supported by Manchester City Football Club; a ‘faith-sensitive’ co-ed in Oldham; and secondaries backed by universities in Birmingham and Plymouth.

However, organisers behind another proposed free school in Oldham – the Phoenix School, which was to be staffed by Armed Forces veterans and backed by General Lord Guthrie, former chief of the defence staff – were angered that their application was turned down.

Mr Cameron said free schools ‘symbolise everything that is good about the revolution that we are bringing to Britain’s schools: choice for parents, power in the hands of Teacher, discipline, rigour, high-quality education in areas that are crying out for more good local schools’.

He added: ‘The free schools revolution was built on a simple idea. Open up our schools to new providers, and use the competition that results to drive up standards across the system.

‘Get behind parents, charities and committed teachers who are trying to make things better, and give them the freedoms they need to transform our education system.

'That is what we have been doing, and the message from the first two years is clear and unambiguous. Free schools work and parents and teachers want more of them. So more is what they are going to get.’

Free schools can be established by groups including parents, teachers, faith groups, businesses, universities and charities. They are given the power to decide how they spend their budgets and set their own curriculum, teaching hours and term-times.

The reforms have pitched the Coalition into a battle with the teaching unions, who suggest they can adversely affect neighbouring comprehensives when they open in areas with no shortage of spaces.

The Department for Education insisted that 88 per cent of the primaries approved yesterday are in areas with a shortfall of places.

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