Deck 6: The Economics of Education: Crisis and Reform

Question 1

What role, if any, do you think teacher pay might play in an effective reform of K-12?

Answer 1

In the current education system, teacher pay is tied directly to student performance. This has been met with mixed sentiments among educators. Those in moderate to high performing schools will see this as an added incentive to maintain student academic performance. However, those teachers at vastly underperforming schools who feel that they are doing all in their power will feel that their efforts are in vain. This could negatively affect morale, which in turn will negatively affect student performance.
Teacher pay need not have such a negative role in effective K-12 reform. By tying teacher pay to other factors, such as the teacher's own abilities and skills, teacher pay can motivate all instructors to do their best.

Question 2

Suppose the legislature of the state that you live in decides to invest an additional $100 million in K-12 education in hopes of improving student performance. Which of the following ways of spending the money would you expect to be most successful:
a. Dividing the money equally among the schools in the state to increase teacher salaries.
b. Dividing the money equally among the schools in the state to reduce class sizes in all grades.
c. Dividing the money equally among the schools in the state to reduce class sizes in the lower grades.
d. Using the money to reduce class sizes in the lower grades and giving a disproportionate share to schools in the state's poorer areas.

Answer 2

As with crime prevention programs, the best way to spend any allocated amount of money is to apply it in a way where every dollar will an equal amount of good. It is also important to ensure that the money is spent in a way that will be beneficial to all aspects of the program it is trying to benefit.
Given the choices, increasing teacher-pay would be the most effective, since it would not only motivate teachers who are already practicing in the field, but also attract new recruits for the education system. Using the money solely to reduce class size, would be a double-edged sword; it would reduce teacher effectiveness and in teaching force, since more teachers would be needed to instruct the more numerous classes. By using the money to attract more teachers, reducing class size could happen more naturally with more effective teachers able to take on the task of instruction.

Question 3

The existence of positive externalities in consumption from K-12 education leads one to conclude that public subsidies of K-12 may be economically appropriate. If this is correct, are such subsidies as defensible for private as for public schools?

Answer 3

The government's role in managing positive externalities is not to produce education but to regulate the system such that the cost of attending a public or private K-12 institution does not outweigh the overall benefit. The closer these two entities can get to equalizing each other, the better it is for the system.
To this end, the government provides subsidies to offset the effects of externalities. This formula should be applied to both public and private schools in order to be effective and is probably more defensible in the case of private schools. The reason for this is because private schools operate for profit and many require direct payment from their consumers. Consumers will not patronize private schools on a wide scale as long as a free public alternative exists unless there is something that lets them know the benefit will equal or outweigh the cost. Subsidies are in place for this very reason.

Question 4

Discuss: "You cannot correct the problems of K-12 in the United States by simply 'throwing money' at the schools."

Question 5

If a state decides to significantly reduce class sizes and wants to maintain instructor qualifications, why will it likely be required to increase teacher salaries?

Question 6

Relying on the National Assessment of Educational Progress report titled "Comparing Private Schools and Public Schools Using Hierarchical Linear Modeling," what can be said about the relative effectiveness of public and private schools in terms of student learning?

Question 7

Drawing on the data presented in this chapter, discuss the crisis in K-12.

Question 8

Show graphically and explain how a purely private market for K-12 might work. How responsive would such a system be?

Question 9

Relying on the concepts of marginal private and social benefits, explain why a purely private system of K-12 might not lead to enrollment levels that maximize social well-being.

Question 10

List and briefly explain any externalities in consumption that you think exist for K-12.

Question 11

How does the existence of externalities in consumption arising from K-12 influence the question of who should pay for schooling?

Question 12

How might tuition subsidies be used to cause a purely private system of K-12 to produce the socially optimal enrollment level?

Question 13

Explain the arguments in favor of a voucher program. Now explain the arguments against such a program. What evidence is there in support of each view?

Question 14

Discuss: "Class size matters little to student achievement."

Question 15

Discuss: "Because of the extensive externalities arising from K-12, government production of K-12 is economically called for."