Courses:

These readings examine three major dimensions of the economy's performance. One is the growth of productivity, the determinant of rising living standards. The second is income inequality. The third is income mobility—the extent to which someone born in one part of the income distribution moves to another part of the distribution (higher or lower) over their lifetime. As we will see, all three of these dimensions rely to some degree on education.

Society or the individual can invest in education at different points in the individual's life: Early childhood, grades K-6, on-the-job training and so on. Investments at different points in the life cycle may give very different rates of return. These pieces examine the proposition that much of cognitive functioning is well established by the time the child is age four or five with the implication that the rate of return to educational investments in grades K-12 is much lower—i.e. it is not where we should be putting our greatest efforts. Read the Feinstein article for general content and its main conclusions and do not spend a lot of time on those statistical parts that you don't understand.

Think about a regression model that estimates the impact of an additional year of schooling on earnings. We know that on average, students who graduate high school have higher grades, test scores, etc. than students who drop out. Similarly, students who go to college typically have higher grades, test scores, etc. than students whose education stops with a high school diploma. Question: Why might this "sorting" cause us to question our regression estimate of the effect on earnings of an additional year of education?

We now know from wage data that labor market demand has shifted heavily toward more educated labor. To what extent do these shifts reflect changes in technology? In international trade? In institutional factors like unions and CEO perceptions of "appropriate behavior"?

A second frequently discussed educational reform is educational choice including school vouchers. With a few exceptions (which we will discuss in class), natural experiments involving school choice are hard to come by. The question, then, is how we should set up and evaluate demonstration experiments. The issue becomes more complex because many parties to this debate have strong pro or anti-choice views and structure their analyses to support their opinions. One of our jobs is to factor out that bias. There are only two papers for this topic because the second paper is quite detailed. You should be able to understand all the results even if you do not understand all the statistical methodology.

Policy makers discuss the need do improve teacher quality but unlike smaller class size or standards, it is not very clear how to do it. There are at least four questions we need to answer. What has actually happened to teacher quality over time? What characteristics should we look for when we hire teachers? What characteristics should we look for in deciding whether to give a teacher tenure? And are there things we can do to improve the classroom skills of teachers who are already on the job?

For most policy makers, one U.S. educational goal is a greater number of college graduates. Here as in earlier topics, we need to clarify why the current number of college graduates is limited. Is it that too few kids are applying? Is it that an adequate number are applying but too many drop out? At the same time, before we can think about policy, we need to understand what colleges are trying to do just as we need to understand what firms are trying to do before we can consider the impact of tax policy.