Edunomics

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Spring 2012 / Vol. 12, No. 2

I am one of the lucky ones. I teach in a school that has many excellent teachers. But for nine years, I’ve observed the larger public-school system in crisis and the contentious debate that surrounds it: Why is it failing? How can it be fixed?

Education—or, as economists refer to it, “investment in human capital”—is a cornerstone of every model of economic growth: if our children are not well educated, innovation and productivity will wither away. In other words, our long-term collective quality of life depends on the quality of our schools. And, by most measures, they are inadequate to the task. What are we doing wrong?

My view is that many problems in education are economic in nature. By this I don’t mean that more funding will solve the problem. I mean that the way we run public education violates virtually every basic tenet of economics. We have constructed a public school system that seems intentionally designed to provide the wrong incentives to administrators, teachers, and students.

Take teacher tenure. Job security with few conditions allows teachers to settle, to become lazy and professionally static. Tenure creates a strong disincentive to innovate or work harder. Tenure attracts to the profession security-seekers rather than risk-takers and provides no upward mobility for the ambitious few.

Now imagine a job where one not only cannot get fired, but where one receives automatic raises simply by being there. Even for the most conscientious teachers, there is no incentive to do more than the minimum, because no matter how hard those teachers work, they cannot be paid more. There are no cash bonuses, no rewards for performance. After working many (truly exhausting) years, few teachers could be faulted for either shifting into a lower gear or moving on.

These are hardly the only disincentives to becoming a teacher. When, at age 37, I started teaching high school, I began, in both salary and rank, as a “first-year” teacher. Despite my having worked in intelligence, diplomacy, and business, I was treated like, and earned essentially the same salary as, a 21-year-old teaching second grade. And, like my first-year peers, I was subject to the seniority system’s stubborn adherence to a last-in, first-out policy.

It doesn’t take the sharpest imagination to understand why this would be a disastrous way to run an organization. If I were, say, managing a pharmaceutical company, would I pay someone with 15 years of experience in pharmacological research the same salary as the new undergraduate intern simply because they were both new hires? Could I expect the same outcomes from both? The same productivity? Of course not. Then why would I pay them identically or fire the last one hired, regardless of performance? This is nonetheless the norm in public education.

When I first thought about teaching, I called my county school system. I explained my professional background, including graduate degrees in international affairs and, later, in international economics. They told me to apply immediately. Then I found out that, despite my background, according to the state of Maryland I was not qualified to teach history, political science, or economics. Until I completed 29 credit hours of teacher training and became certified, I would be employed as a “long-term substitute,” a job with full hours, low pay, no benefits, and the real possibility of my being released at the end of the year.

State-mandated teacher certifications (backed by No Child Left Behind–based rules) are preventing highly qualified candidates from becoming teachers. I was an all-too-rare exception. At the time, my wife and I were in a secure enough financial position that I could take two years off without any income to become a teacher and then earn around $45,000 a year once employed. How many experienced professionals, especially those with families, could do that? Why should they have to? I had the academic background and pedagogical skills I needed to be a teacher before expending all that time, money, and effort on a graduate degree in education.

Teacher quality is the key to improving public education in the United States. Nonetheless, we systematically dissuade highly capable people from becoming teachers. If we are to improve our educational system, we must instead create economic incentives that draw the best people to the profession and keep them there.

Vann Prime teaches Advanced Placement (AP) economics, AP European history, and international relations at Mount Hebron High School in Howard County, Maryland.




Comment on this article
  • Douglas Kruse says:

    This analysis is spot on! As my finance professor used to say, “You tell me the incentives and I’ll tell you the behavior.” The incentives for public school teachers are poorly designed and there are significant barriers to entry for anyone that had a professional life outside of teaching. I also believe that both issues must be addressed if awesome teachers are to be attracted and retained in greater numbers.

  • Kevin Wall says:

    Mr. Prime:

    While your argument appears logical in an economic sense, you fail to recognize that public-school teachers are paid by tax dollars which are subject to a limited budget each year. Unlike the private sector, public schools are not working to profit; they are serving the needs of the masses. The only exception that I have seen to this rule concerns high school football coaches — whose programs have the ability to create large profits for their schools. Those guys can sometimes reap benefits far beyond the normal pay scale.
    Having entered education quite late myself, I can attest that public school teaching is vastly different from most occupations. While I could enumerate these difference, I would be writing all day, and most people can recall what school is really like. My point is that one does not remain in a teaching career for the money and financial benefits. The love of the subject matter and the intrinsic satisfaction of serving the younger generations are equally sustaining.
    As a veteran high school English teacher, I can look back and see that I had other options that would have (likely) led to more financial gain. However, I can also look back quite happily at the hundreds of students I have taught, coached, befriended, inspired, argued with, learned from — basically given much of my adult life to — so that each of them can move to the next step in their lives with a sense of accomplishment, that they learned some tangible information and skills and that they overcame some fairly challenging obstacles over the course of a school year. After all, school — from kindergarten through 12th grade — is a systematic method of helping children grow into adults. It is not a factory in which we can select the finest raw materials, use the most advanced technology, and produce a quantifiable, profitable product.
    Speaking of technology, since it has become such a fixture in most schools, I venture to suggest that the technology providers, seeing potential for (endless) profit that schools offer, have become among the strongest voices for “fixing” schools. Why not have all students take on-line courses from the few truly brilliant scholars? Why, in fact, are expensive college campuses still so populated when students could simply take on-line courses? The answer goes beyond simple economics.

  • Eddie Partida says:

    I think a there is a misconception that leads educators to believe that the altruistic aspects of the teaching profession are somehow incompatible with economic models; namely the idea that markets are profit generating machines run by evil greedy bastards that do not see past their own bottom line. True, there are a small percentage of individuals who we would all like to see in Dante’s 8th circle of hell( ie Bernie Madoff) but if you believe as some economist do that individuals are moral and by extension markets then we can begin to see how the education landscape can be transformed from a system designed from the top down for the benefit of the “producers” (schools and institutions) to one that is constructed and continuously shaped from the bottom up by its users/consumers (including, teachers, parents and community members). It is they who will determine which ideas are valuable and worth learning; what works and what doesn’t. Yes technology will play a major role and the transition has already begun. (Khan Academy has over 3 million users, MIT Opencourse offers over 3000 free courses). I am not anti-teacher(in fact I am a teacher) and I am in no way suggesting that technology will replace teachers, what I am saying is that if teachers are to survive they will need to adapt and participate in this new education economy.

  • Matthew Hiebert says:

    This is a thoughtful reflection on some of the issues related to the teaching profession. The issues related to tenure and the lack of credit for non-(even non-local)-classroom-teaching experience (even ed sector experience) is disgraceful. It’s worth noting, though, that initiatives like Teach for America seem to be attracting high caliber recruits and helping to re-instill a sense of pride in the new generation of teachers. Also, I have to shake my finger at the the sneering comparison between teaching fancy high school subjects and teaching grade two. Since the author is coming at this from an economic standpoint, it is well worth noting that there is solid research (from the World Bank, among others) that there is a greater return on investment in early years education than the older grades. http://www.aroundsquare.com

  • Andrew Milton says:

    Attending to incentives is essential. That’s why I’m so concerned about the kinds of incentives that follow from the standardized test process and the connecting of teacher evaluations to the test scores.
    http://speakingofeducation.blogspot.com/2012/03/bad-tests-teacher-evaluations-and.html

  • Brook Brayman says:

    I agree with Kevin: education is budget-funded, so it is a zero-sum game. If Teacher A’s test scores go up, and she is paid a $1,000 cash bonus, that thousand has to come from somewhere else within a closed-circle budget. Where does it come from? Textbooks? Technology? Teacher B?

    Schools don’t vie for market share nor do they create new markets. My district has an open-choice policy for it’s six high schools, and virtually no parents opt out of their neighborhood high schools despite the relatively higher performance of competing high schools, which are all less than ten miles away from each other, and I have not heard of a district that is proposing formal education for four-year-olds or annexation of the grade thirteen market to try to open new product lines or steal market share from competing community colleges.

    Finally, Daniel Pink’s economic study of creative professions, which includes education, shows us that direct, extrinsic, cash payout- or coercive, threats-based incentivizations aren’t sustainable in the long term.

  • Vic P. says:

    I’ve read so much about how we need to fix schools that I can barely stand it. If you really think that the schools or the teachers are the problem, then the problem will never be fixed…and it won’t, by the way. Culture, people…good ol’ American culture is the problem. No dad, mom looking for her next pain pill fix, youth cultural fixation with “gettin’ paid”, no moral compass…these are the enemies of education, not bad teachers or economics. Coleman had this figured out in the 60′s for crying out loud…could we maybe start to listen? Here’s another tidbit of reality for you…not everyone needs a great education. My mother and father both quit school…dad died with 2.7 million net worth, mom is quite comfortable in retirement. We are not all equal, nor do we need to be. We do not all need to have a degree to be happy. We do not all need a six-digit income to be happy.

  • audhilly says:

    The expectation that any job experience is equal to teaching experience is probably a key to why teaching isn’t the first career of choice for many. It’s just too low status for most ambitious people.

    Try it on this way: I’m talented and hard working. I’m really bright. I taught social studies for 6 years. Can I have a job as a diplomat? I taught English for 22 years. Can I have a job as a non fiction feature writer/editorialist for the NYTimes or Slate? Please??

    Oh wait.. sweat equity? I didn’t pay my dues in those professions? I didn’t spend years learning my craft in those professions. Oh right. But, teaching.. well you know.. it’s just teaching. Laudable but it’s not… economics.

    Oh, and by the way, tenure protects people from summarily being fired once they finally make a living wage (I say finally because some of us started at $19k plus use of our credit cards to make ends meet… nobody wanted my job, then). It also protects against the pressure to teach in ways that are ethically suspect… like give an A for no effort or call Israel Palestine because your house principal is Palestinian. (both of which I was asked to do)

    I take risks every year in my classroom. I don’t act like a hedge fund manager cutting through everybody else’s security on my way to my next really big bonus. But maybe those kind of risks aren’t really necessary to good teaching. I agree that teaching is a cul de sac, but then.. so is engineering. You want to go up in engineering.. you end up in management, not higher levels of engineering. Tenure doesn’t, by the way, interfere with that type of mobility. If you want to run a school in three years and you think you know everything about education and what schools need there will be plenty of opportunities for you.

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