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Finance & economicsAug 21st 2021 edition

Free exchange
The case for mutual educational disarmament

And for a high-stakes, lower-effort test

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Aug 21st 2021

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ECONOMISTS TEND to be big fans of education, which is perhaps not
surprising given how much of it they consume and how well their
textbooks can do. Alfred Marshall, writing in 1873, hoped that
education would help erase the "distinction between working men and
gentlemen". Gary Becker of the University of Chicago reimagined
education as an investment in "human capital" that would earn a
return in the market much like other assets. Harvard University's
Greg Mankiw, whose books have educated more than most, once
calculated that differences in human capital between countries could
account for much of their otherwise inexplicable differences in
prosperity.

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But economics can also be scathing about schooling. The theory of
signalling likens many educational credentials to peacock's tails:
costly encumbrances, useful only as conspicuous proof that their
owners are intellectually strong enough to bear them. And in "The
Social Limits to Growth", a book published in 1976, Fred Hirsch, once
a writer for this newspaper, pointed out that education is often
"positional" in nature. What matters is not only how much you have,
but whether you have more than the next person. For many students it
is not enough merely to acquire a good education. They must obtain a
better education than the people jostling with them in the queue for
sought-after jobs.

Positional goods are, by their nature, in strictly limited supply.
Everyone can in principle live in a good neighbourhood, attend a good
school, and work in a good job. But logic sadly dictates that not
everyone can enjoy the nicest neighbourhoods, best schools or most
prestigious jobs. As Hirsch pointed out, "what each of us can
achieve, all cannot."

An unhappy corollary is that one family's outlays on schooling raise
the bar for everyone else. Families are drawn, often unwittingly,
into educational arms races. They spend money and time on
after-school tutoring or extra-curricular activities (so-called
shadow education) in the expectation that it will improve their
child's position in the queue for advancement. But they quickly
discover that everyone else is doing the same, leaving them in the
same position as before. They are in fact worse off, because of the
costs and frustration incurred. "If everyone stands on tiptoe, no one
sees better," Hirsch noted. And their feet also hurt.

These arms races are often particularly ferocious in East Asia. In
China and South Korea, schoolchildren face nationwide "high-stakes"
tests--the gaokao in China and the suneung in South Korea--that play a
big role in determining whether and where they can go to university.
In China's cities, pupils spent 10.6 hours a week on after-school
tutoring, according to a report by Frost & Sullivan, a
market-research firm.

The governments in both countries have tried to orchestrate a kind of
collective disarmament. South Korea imposed a 10pm curfew on cramming
schools in 2009. Inspectors would go on patrol looking for schools
with their lights on. (Some schools covered their windows with black
tape.) China has been introducing restrictions on after-school
tutoring at an increasing pace since 2018. Last month it barred
tutoring firms from listing on the stockmarket, raising foreign
capital or making a profit. The strictures have wiped tens of
billions of dollars off the market value of China's once-booming
edtech sector.

Will these measures work? It is almost impossible to stop families
hiring private tutors to teach their children in their own homes. And
if shadow education is successfully curtailed, the arms race can take
different forms. Parents who cannot buy a better education directly
can instead buy homes near better schools. A study by Xuejuan Su of
the University of Alberta and Huayi Yu of Renmin University found
that when the management of a public elementary school in Beijing is
taken over by another better-regarded school, property prices nearby
rise by an average of 7%.

The arms race is notably less intense in parts of Europe. In Norway
and Sweden parents show little demand for tutoring--the wealthy even
less than others, according to Steve Entrich of the University of
Potsdam. And overeducation is less common in Germany and other
countries that sort children early into academic or vocational
schools, with little mobility between the two, according to a study
by Valentina Di Stasio of Utrecht University together with Thijs Bol
and Herman Van de Werfhorst of the University of Amsterdam.
Vocational schools are supposed to teach what employers want recruits
to know. That may limit the scope for credential inflation. For
better or worse, they also remove large numbers of students from the
race for more academic laurels.

Beruf als Politik

Both China and South Korea have begun promoting vocational education.
China's latest five-year plan (which concludes in 2025) promises to
explore an "apprenticeship system with Chinese characteristics" and
to "vigorously cultivate talents with technical skills", according to
one translation. Some of the edtech firms squeezed out of
after-school tutoring are exploring vocational education instead.

Germany's custom of placing children on different tracks at age ten
or 11 also invites an interesting thought experiment. What if the
gaokao (and similar tests) were held earlier in a pupil's career? If
these exams truly test the knowledge required for university, they
must be held just before university starts. But if such tests mostly
serve as filters, sifting better students from worse, they need not
be held so late. An aptitude test at 16 years of age, say, will
probably generate a similar ranking as one held two years later. The
tests would remain stressful. But an earlier gaokao would save
families a year or two of costly cramming, shortening "the obstacle
course", as Hirsch put it, without much changing the results. Such
tests will always have high stakes. But they need not require such
high effort. #

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This article appeared in the Finance & economics section of the print
edition under the headline "Assume the positional"

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