The ultimate economic gaffe

Does Education Matter? Myths about Education and Economic Growth
December 13, 2002

Laurie Taylor thinks the unthinkable - too much education is a bad thing.

Something wholly original happened in education this year. It was not, though, another costly and heavily promoted government initiative, another rigorous set of primary or secondary tests, another attempt to create relevant vocational qualifications, another exciting youth training scheme, or even another expanded target for those entering higher education. It was the publication of this tightly argued and highly readable book about the fat myths that bolster so much current government thinking about education.

Here at last is a text as immediately relevant to professional educationalists as to all those who back away from the entire subject area because of the impossibility of keeping up with the never-ending government shifts in policy and practice. Here at last is a radical book on education that pays no dues to any political party, a book that will change minds. Few who read its persuasive demonstration of the lack of any clear-cut relationship between education and economic growth or of the dubious advantages of pushing more and more people into higher education will ever again be able to listen to a politician extolling all forms of education growth as an unarguable good without reaching for the sick bag.

It is perhaps surprising that such a powerful attack on the sacred cows of education planning should come from the heart of the educational establishment. But although Alison Wolf is professor of education at the University of London's Institute of Education, she has no qualms whatsoever about almost gleefully undermining the assumptions that ensure an ever-expanding demand for her own graduates. She almost seems to enjoy this maverick status. In her introduction she describes her attendance at a high-powered "working dinner" where the topic of conversation was how poor countries might follow Korea, Thailand, Taiwan and other "tiger" economies into decades of economic growth. The "mildly eminent and seriously rich" experts around her were united in their belief that what was required was much more education spending. Wolf, the only educationist present, suggested quietly that this might not be the right priority in a poor country. She was shocked (one suspects not too greatly) by the reaction. "As a social gaffe, mine went far beyond mistakes with the fish knife, or in passing the port. Questioning the automatic value of any rise in the education budget, it seems, places one somewhere between an animal hater and an imbecile."

It is this almost-sacred correlation between education and economic growth that initially occupies Wolf. Her starting point is an account of the worldwide expansion of education over the past 30 years. As she says, the figures are difficult to comprehend: there are now more than a billion students in all, nearly half a billion students in secondary schools, 88 million university students and 54 million teachers. Neither are these extraordinary numbers the result of slow cumulative growth. Percentage increases are measured not in tens and 20s but in hundreds (the number of university students in the world has increased by 300 per cent since the early 1970s).

Even more dramatic than this increase in student and teacher numbers is the lack of critical analysis that it inspires. No one, it seems, wants to suggest that there might be something wrong or misguided about governmental policies that promote education. Years ago, when education was seen as having a wide range of functions, it was possible to question the amount of it that might be appropriate to particular groups and individuals. But now that we have all bought into the single idea that education is the key driver of economic growth, it becomes almost Luddite to propose any tempering of the political demand for more and more of the same thing.

Wolf is happy to admit that this correlation between education and economic growth looks unshakeably positive when one concentrates on the earnings of the educated. Study after study shows that the more educated earn more. But why, she wonders, do we always stop at that point? Why do we not go on to ask if those who earn more as a result of their education are doing so because that education has turned them into beings whose skills promote economic growth?

Consider the practice of law. We might all agree that a proper legal system with enforceable contracts is a precondition for economic prosperity. But in reality the number of lawyers we employ has more to do with the volume of regulation in any particular society rather than with fundamental contract requirements. (The US, for example, has six times as many lawyers per head as Japan.) All of this makes it "very hard to see lawyers'

salaries, and their share of gross domestic product, as somehow reflecting closely lawyers' marginal productivity and contribution to economic growth". As long as we stick to a rate-of-return analysis that estimates growth by comparing the cost of education with the eventual earnings of the educated, we end up with the absurd conclusion that "the fastest way to boost growth would be to send everyone to law school".

Once we recognise that earnings are only an imperfect measure of an individual's productivity, we are free to question the value of more and more educational spending. "It is no more self-evident that since some education makes some of us rich, more would make more of us richer than it is that 'two aspirin good' means 'five aspirin better'." This sends Wolf off on a romp through comparative statistics. Is there any evidence that the provision of more and more education lies behind the dramatic growth of economies in different parts of the world? She comes up empty-handed. Recent World Bank analyses of developing economies show that "countries which have done most to increase the education levels of their population have, on average, grown less fast than those which have devoted fewer resources to education".

Her comparison of developed countries turns up equally negative results. Some successful economies certainly do spend a great deal on educational growth, but there are enough negative examples (Switzerland is a classic case) to prompt the heretical thought that we are seeing things back to front. "Could it be that growth causes education, rather than education causing growth?"

Wolf is not, of course, arguing against the value of primary and secondary education. Literacy and particularly numeracy are key skills in any modern or aspirant economy. But what she does distrust is the universal belief that we are moving towards "a knowledge economy" that will require more and more of its citizens to acquire those special skills (whatever they might be) that can be uniquely conferred by further and higher education. Not only are there still many jobs in society that do not depend on such "advanced" knowledge, but there is a very real danger that millions of people are now being given far more education than is needed for them to perform their jobs. We are consistently overeducating. "Jobs which 20 years ago were done by people who had left school at 16 and 18 now go only to new entrants who have degrees."

The villain in all this is central government. Wolf steers clear of the hackneyed debates between political parties about education policy, but she is thoroughly exercised by the inability of central governments to fine-tune educational policies and to discriminate effectively between quantity and quality. This inability is evident enough in their relentless insistence on increasing the numbers in higher education, but is perhaps even more pronounced in the area of vocational education.

One might almost regard the lengthy section that she devotes to this topic as a form of comic relief after the hard-nosed economics of her argument about growth and education. It is difficult not to laugh aloud at the sheer repetitiveness of British government statements about the need to enlarge, redesign and promote vocational education and at the almost total failure of all the initiatives dreamt up to realise such aims. The only thing that eventually curbs one's laughter is the cynical number-fudging that a long line of ministers and business heads have resorted to in order to obscure the full extent of their mismanagement. But in the end nobody was fooled. Certainly not the young people who, whether confronted by Youth Training Schemes or National Vocational Qualifications or Core Skills, have repeatedly recognised that they were being offered an educational option that was second best. "Young people... may not have a detailed grasp of labour market trends but they are aware of general ones. Would you advise your own 17-year-old to abandon general education in favour of a highly specific vocational training programme which leads directly into a highly specific trade - and only into it - especially when that trade itself may disappear tomorrow? No - and nor did the civil servants and ministers who somehow persuaded themselves that everyone else should do so."

So much of what Wolf has to say about the dubious link between economic growth and education spending, and the fatuity of the attempts by the government to create vocational education, is new and provocative that it is mildly disappointing to reach her final chapter on the higher education market. She has plenty of hard facts about the failure of higher education to further equal opportunity and the material consequences of underfunding. But she seems to falter slightly as she moves away from economic arguments towards more philosophical statements about the value of "disinterested learning". There is also the problem of consistency. Earlier in the book, she appears to throw cold water on the idea that universities necessarily provide special skills over and above those that could be obtained within secondary education. The fact that employers persistently discriminate in favour of graduates is not, we are told, solely or even principally because of any special skills that they have acquired in higher education. It is merely a way in which they can rank and sort the large army of potential applicants. If this is the case, then it becomes rather difficult for Wolf to complain too passionately about the manner in which today's cramped and underfunded graduates are less well educated and trained than they were some years ago. One cannot do much to devalue an asset that is already of dubious worth.

Although this fine book is primarily an academic thesis about the gap between rhetoric and reality in a multibillion-pound industry, it is also a swingeing polemic, a direct in-the-face challenge to all those who unthinkingly promote education of every kind as an unqualified good. What Wolf has to say about our obsession with education growth is going to be disrupting a great many more "working dinners" (and conferences and colloquia and policy seminars) for years to come.

Laurie Taylor is a fellow of Birkbeck College, University of London.

Does Education Matter? Myths about Education and Economic Growth

Author - Alison Wolf
ISBN - 0 14 028660 8
Publisher - Penguin
Price - £8.99
Pages - 332

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