Category Archives: Education

The Special Olympics and Tax-Funded Philanthropy

30 Saturday Mar 2019

Posted by in Big Government, Education, Federal Budget

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The federal government’s contribution to funding the Special Olympics (SO) illustrates the widespread view of government as a limitless font of subsidies for appealing causes. People were up in arms over the elimination of $17.6 million dollars in federal grants for the SO in President Trump’s budget proposal. Granted, that’s a pittance as budget items go. Later, Trump promised to restore the funding. That is, of course, in addition to the millions in federal tax subsidies already granted on private gifts to the SO.  As Nick Gillespie explains, SO funding is like so many other things people want from government that government has no business doing. Why, exactly, should the federal government, or any level of government, fund the SO? It is a wonderful program, but it simply does not have the character of a public good, nor is it a safety net issue.

The SO certainly benefits the athletes and families that take part, but those benefits are strictly private. Perhaps the larger population of disabled individuals takes inspiration from watching the SO, along with good-hearted people everywhere. Most everyone is happy to know that the SO happen, but those are no more public benefits than the good vibes you get from viewing an inspirational film or theatrical production. For that matter, sports fans and patriots are inspired by great efforts on the part of the U.S. Olympic team, but the federal government does not fund the U.S. Olympic Committee. It’s therefore absurd to assert that the public bears an obligation to pay for the most athletic of disabled individuals to have opportunities to compete and win medals just like Olympic athletes.

Gillespie explains a little about the history and funding of the SO:

“Founded in 1968 by Eunice Kennedy Shriver, the Special Olympics is a 501(c)3 nonprofit, meaning that deductions to it are tax deductible. According to its 2017 financials (the most-recent available on the web), the organization had total revenues of about $149 million, including $15.5 million in federal grants. It’s not a stretch to assume that if federal funding disappears, the resulting outcry would lead to record donations.”

And again, let’s not forget that corporate gifts to the SO are tax deductible up to certain limits. Gillespie also quotes Secretary of Education Betsy DeVos:

“There are dozens of worthy nonprofits that support students and adults with disabilities that don’t get a dime of federal grant money. But given our current budget realities, the federal government cannot fund every worthy program, particularly ones that enjoy robust support from private donations.”

Families with disabled children have extraordinary needs. It’s probably better to think of federal support for those needs as a safety net issue, a form of social insurance. There are several federal programs that provide funds to support low-income families with disabled kids. And while the cut to SO funding was in the budget originally submitted by Secretary DeVos, Gillespie notes that the DOE’s budget “allocates over $32 billion for ‘high-need students,’ which includes intellectually disabled students.” 

DeVos was widely criticized for her budget, but as Gillespie says, she sets a fine example for anyone in a position to help rein in the growth of federal spending and ultimately the federal budget deficit. Given the DOE’s track record of poor programmatic guidance (Common Core), counter-productive school disciplinary mandates, and it’s complete lack of impact on educational outcomes after 40 years of existence and many billions of dollars spent, the continued existence of the DOE is difficult to rationalize.

Once a program appears in the federal budget, no matter how inappropriate as a public priority, and no matter how ineffective, its constituency will always defend its funding with rabid enthusiasm. That defense is multiplied by a chorus of statists in the media and elsewhere who, in their benevolent intentions for the taxes paid by others, can be counted upon to call out the “cruelty” of any proposed cuts, or even mere cuts in a program’s projected growth. The Special Olympics episode, and the DOE, are cases in point.

In Defense of College Admission for Pay

20 Wednesday Mar 2019

Posted by in competition, Education, Markets, School Choice, Uncategorized

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The college admissions scandal revealed by the FBI last week exposed the willingness of some very wealthy people to lie and cheat to enhance the status of their children. It also resulted in charges against several employees of testing services and prestigious universities, who sold-out their institutions for pure financial gain. These actions may have harmed more deserving applicants to the defrauded academic institutions. Perhaps as sad, the children whose parents cheated are bound to suffer life-long consequences.

Strong prosecution of these crimes will deter other parents entertaining similarly crooked avenues in pursuit of ambitions for their kids. The schools and testing organizations should be motivated to tighten their internal governance processes. My hope, however, is that legislative bodies will refrain from passing new laws in an effort to regulate college admissions. Many schools accept a small percentage of students, legacy or otherwise, who do not meet their academic standards but whose wealthy families make substantial, above-board donations that benefit other students. Putting an abrupt end to these transactions might not be helpful to anyone.

With certain conditions, I do not object to wealthy parents wishing to pay an above-board premium to get their kids into the college of their choice, nor do I object to schools that are free to name their price. First, the school should always receive consideration in an amount adequate to benefit other students or deserving applicants. Second, the acceptance of a privileged but academically inferior student should represent an increment to the school’s freshman class, never taking a coveted slot otherwise filled by a better student. Third, an institution should never guarantee successful completion of a degree program in exchange for such an offer. Fourth, I’d like to see schools make public the number of students falling short of academic qualification whom they accept in exchange for such offers, as well as the aggregate remuneration they receive in all those cases. Fifth and finally, I see no reason why these practices should be limited to private schools. However, a public school’s remuneration must be more than sufficient to make unnecessary any taxpayer subsidies attributable to a new matriculant.

I don’t believe any of these conditions should be a matter of law. Private and public educational institutions are market participants, even if they do engage in non-price rationing. Market incentives should guide institutions to protect the integrity of their brands by awarding degrees only for real academic achievement. This bears on my third and fourth conditions above: no school can guarantee to parents that a degree will be awarded to their child without compromising its integrity. Also, a school’s academic reputation should reflect the extent to which it accepts applicants lacking the school’s minimum standards.

One of the thorniest problems with my conditions has to do with the poor academic standards that actually exist in certain degree programs. These make it possible for bad students to earn diplomas. Grade inflation is all too pervasive, and grade-point averages are notoriously high in some fields, such as education. It may be exceptionally difficult to monitor and prevent instructors from allowing poor students to skate through classes with decent grades. And too obviously and sadly, it’s often the diploma itself that matters to people as a status symbol, rather than real educational achievement. If employers are content to rely on mere signals of that kind, so much the worse.

There’s nothing to be done if that’s all that is demanded of a college education. I think that, more than anything else, is what inflames the passions of Bryan Caplan, who calls the entire system of higher education wasteful. More demanding disciplines have some immunity to this form of decay. Competitive markets might punish schools and employers having weak standards. But wherever the importance of real merit is discounted due to classist loyalties, legal impediments, professions lacking in academic rigor, or any other form of compromise, the diploma signal is paramount, and that is lamentable.

The admissions scandal has prompted howls of indignation directed not only at the cheaters ensnared by the FBI’s “Varsity Blues” operation, but more broadly at the perceived injustices of college admissions in general. The process is said to be unfair because it tolerates admissions for scions of wealthy families and even those who can pay for multiple rounds of standardized tests, multiple application fees, interview “coaches” and the like. These advantages are not unlike those endemic to any market in which ability-to-pay impinges on demand. Yet generally markets do an excellent job of facilitating the development of affordable substitutes. College education is no different, and longstanding mechanisms are in place offering means of payment for academically-qualified applicants who lack adequate resources. The conditions I listed above would enhance that support.

Nevertheless, critics say that the disadvantaged do not get adequate preparation in primary and secondary education to be competitive in college admissions. They are largely correct, but the solutions have more to do with fixing public K-12 education than the college admissions process. Primary and secondary education are almost devoid of competition and real parental choice in disadvantaged communities. There are many other social problems that aggravate the poor performance of public education in preparing students who might otherwise be candidates for higher learning. Realistically, however, the college admissions process cannot be blamed for those problems.

School Discipline, Disparate Impact, and Disparate Justice

05 Friday Oct 2018

Posted by in Discrimination, Education, Uncategorized

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Sad to say, there are racial disparities in victimization by misbehavior in schools, and African American children are the most victimized in terms of their safety and academic environment. Yet since 2014, the Department of Education (DOE) has been enforcing rules against “disparate impact” in school disciplinary policies, often aggravating that victimization. In a paper entitled “The Department of Education’s Obama-Era Initiative on Racial Disparities in School Discipline: Wrong For Students and Teachers, Wrong on the Law“, authors Gail Heriot and Alison Somin expose these unfortunate policies and the distortion of actual law they represent. These policies and actions are presumed by the DOE and the Office of Civil Rights (OCR) to be authorized under Title VI of the Civil Rights Act of 1964, but Heriot and Somin show that Title VI is not a disparate impact law and that enforcement of strictures against disparate impacts exceed the authority of the OCR.

When are disciplinary policies discriminatory? Disparate treatment occurs when a student from a “protected class” is punished more severely than other students for an identical misdeed. That is obviously discriminatory and unfair. A disparate impact, however, is a statistical difference in the punishments meted out to a protected class relative to others, which is not prima facie evidence of discrimination. Given consistent application of disciplinary policies — identical treatment for all classes under those policies — disparate impact is possible only when there are differences in the actual behavior of students across classes. Of course, such a difference does not mean that the protected class is “less worthy” in any absolute sense; instead, it probably indicates that those students face disadvantages that manifest in misbehavior in greater proportion within a school environment. The consequences of refusing to punish that behavior are bad for everyone, including and perhaps especially the miscreants themselves.

Disparate impact enforcement rules are fundamentally flawed, as Heriot and Somin explain. Almost any decision rule applied in business or other social interaction has a disparate impact on some parties. Defining qualifications for many jobs will almost always involve a disparate impact when protected classes lack those skills in greater proportion than unprotected classes. In schools, such rules lead to more lenient disciplinary policies or a lack of enforcement, either of which are likely to bring even greater disciplinary problems.

In schools with large minority populations, these perverse effects penalize the very minority students that the DOE hopes to protect. And they often have harsh consequences for minority teachers as well. Walter Williams bemoans the difficulties faced by many teachers:

“For example, after the public school district in Oklahoma City was investigated by the OCR, there was a 42.5 percent decrease in the number of suspensions. According to an article in The Oklahoman, one teacher said, ‘Students are yelling, cursing, hitting and screaming at teachers, and nothing is being done, but teachers are being told to teach and ignore the behaviors.’ According to Chalkbeat, new high school teachers left one school because they didn’t feel safe. There have been cases in which students have assaulted teachers and returned to school the next day. …

An article in Education Week earlier this year, titled ‘When Students Assault Teachers, Effects Can Be Lasting,’ discusses the widespread assaults of teachers across the country: ‘In the 2015-16 school year, 5.8 percent of the nation’s 3.8 million teachers were physically attacked by a student. Almost 10 percent were threatened with injury, according to federal education data.'”

To state the obvious, this undermines the ability of teachers do their jobs, let alone enjoy teaching. For many, quitting is an increasingly tempting option. And Williams, an African American, goes on to say “… when black students are not held accountable for misbehaving, they are set up for failure in life.”

When it comes to misbehavior, equalizing discipline by subgroup is almost certain to be unjust. And disparate impacts are almost certain to be a byproduct of a just disciplinary system when other social forces lead to differences in preparation for schooling. When the focus is placed on a by-product of Justice, rather than justice itself, as when disparate impacts are penalized or prohibited, everyone loses. It obviously harms unprotected classes, but ultimately it harms protected classes even more harshly by subjecting them to degraded school environments, less educational opportunity, and fewer rewards in life.

Busting the K-12 Monopoly

12 Monday Dec 2016

Posted by in Education, School Choice

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Public school teachers are highly sensitive to any suggestion that their schools should “compete” for students, but it’s difficult to rationalize restrictions on competition faced by any institution that trades with consumers. Education is certainly not a natural monopoly. But in the U.S., K-12 public schools are granted an effective service monopoly over large segments of their local markets. Their monopoly status is a legacy and usually taken for granted, but that does not make the arrangement a natural state of affairs, or a healthy one.

The idea that education is a “public good”, or nonexclusive in the benefits it confers, is true only in a weak sense. Yes, there are external benefits from the education of children, but those are secondary to the personal benefits reaped by the children themselves as they go through life. And even strong public spillover benefits do not imply that government should provision the education itself, free of competition. Economic theory justifying intervention in markets implies only that the public sector should attempt to augment supply; direct production by the public sector is unnecessary and often unwise. Competition among schools will bring forth more of the private and public benefits than a monopoly.

But the public schools are free, and that doesn’t sound like a monopoly, right? Well, no, they aren’t free! Not to taxpayers, of course, but also, not to families with children who are denied the right to fully internalize the true opportunity cost of the resources claimed by public schools. The option to move to a school district with better academic performance is unavailable to many families. What would those families decide given a greater degree of empowerment to consider alternatives?

About 18 months ago, the topic of the K-12 monopoly was the subject of a favorite post on Sacred Cow Chips called: “Public Monopolists Say “Don’t Be Choosy“. It called attention to a thought exercise featured by economist Don Boudreaux on Cafe Hayek. Consumers are very choosy about their food, and they should be. Why shouldn’t they be just as choosy about another essential: the school for their children? Because the government won’t let them! Boudreaux lists factors that would make consumer grocery distribution just like the structure of K-12 education. That includes property taxes to pay for “public” grocery stores and the allotments of food they distribute, assignment of each family to a single public grocery store, but freedom to shop at “private” grocery stores at additional expense. He then asks how the food distribution system would perform. Here’s Boudreaux:

“Being largely protected from consumer choice, almost all public supermarkets would be worse than private ones. In poor counties the quality of public supermarkets would be downright abysmal. ….

Responding to these failures, thoughtful souls would call for ‘supermarket choice’ fueled by vouchers or tax credits. Those calls would be vigorously opposed by public-supermarket administrators and workers.

Opponents of supermarket choice would accuse its proponents of demonizing supermarket workers (who, after all, have no control over their customers’ poor eating habits at home). Advocates of choice would also be accused of trying to deny ordinary families the food needed for survival. Such choice, it would be alleged, would drain precious resources from public supermarkets whose poor performance testifies to their overwhelming need for more public funds.

As for the handful of radicals who call for total separation of supermarket and state—well, they would be criticized by almost everyone as antisocial devils indifferent to the starvation that would haunt the land if the provision of groceries were governed exclusively by private market forces.

In the face of calls for supermarket choice, supermarket-workers unions would use their significant resources for lobbying—in favor of public-supermarkets’ monopoly power and against any suggestion that market forces are appropriate for delivering something as essential as groceries.“

That’s exactly the behavior we see from the teacher’s unions, from which sanctimony flows liberally as to “public service”. Remember that the classic monopolist actively engages in denying choice and restraining trade through private actions, public relations and various other political means. But why would any sane observer have concluded that these “protected markets” would lead to successful outcomes?

It’s no secret that public schools in the U.S. face severe challenges. They are highly uneven in their results. A recent report in U.S. News said the following:

“Since World War II, inflation-adjusted spending per student in American public schools has increased by 663 percent. Where did all of that money go? One place it went was to hire more personnel. Between 1950 and 2009, American public schools experienced a 96 percent increase in student population. During that time, public schools increased their staff by 386 percent – four times the increase in students. The number of teachers increased by 252 percent, over 2.5 times the increase in students. The number of administrators and other staff increased by over seven times the increase in students.“

Federal efforts to improve K-12 education have been remarkably fruitless. Despite the massive increases in staffing over the past 50 years at all levels, graduation rates are still miserable in minority districts; schools are more segregated today than 50 years ago; huge gaps exist between the achievement of students in high and low-income districts; and math scores on standardized tests rank near the bottom of OECD countries, (science and reading scores are closer to the average).

The usual rejoinder from the public school establishment is that still greater funding is needed. Always more…. But families are exercising their right to opt-out. The number of home-schooled children is likely to exceed two million by 2020. There are now programs in 32 states facilitating choice through vouchers, tax credits, tax deductions, and education savings accounts. The body of research surrounding the effects of school choice is overwhelmingly positive: choice has improved academic outcomes in both private schools and the public schools that are forced to compete, it has a positive fiscal impact, and it reduces racial segregation. The constant drumbeat of additional funding requests looks unnecessary and wasteful in view of the options.

As for federal dollars, one suggestion is to pare back sharply the number of bureaucrats at the education department, putting the savings toward a program that would emulate the hugely successful GI Bill, under which beneficiaries chose how to spend the money.

Donald Trump’s nominee for education secretary is school choice advocate Betsy DeVos. Obviously, the new administration will not view the public school monopoly as untouchable. But let’s get one thing straight: no one is trying to “ruin” public schools. The objective is to fix something that’s been broken for a long time and, in so doing, to improve educational outcomes across all segments of society. The medicine delivered thus far, including top-down planning and profligate spending, has been expensive and ineffective, and even counterproductive in some respects. A few bad schools will fail under a competitive regime, but they already do. Bad schools have no sacred right to survive. Most struggling schools will improve, leveraging innovative techniques as well as their natural advantages, which often include proximity to a base of prospective students. It’s time to tackle the education problem by vesting consumers with sovereignty in the choice of schools.

 

Good Bets, Bad Bets & Student Debts

07 Sunday Aug 2016

Posted by in Education, Student Loans

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Recent proposals for “free” college education are partly motivated by a hubbub over crushing student debt, but a recent book by Sandy Baum of the Urban Institute questions that narrative. Entitled “Student Debt: Rhetoric and Realities of Higher Education“, the book offers perspective on the use of debt to fund post-secondary education. Student loans are perfectly good funding methods in many circumstances, but it should go without saying that borrowing is a bad idea when the sought-after education is a bad idea.

Here are some facts about student-loan debt presented in an interview with Baum by National Public Radio (NPR). They are not particularly alarming:

  • A third of college students who earn a four-year degree graduate with no debt…. 
  • A fourth graduate with debt of no more than $20,000.
  • Low-income students hold only 11 percent of all outstanding [student] debt.
  • Almost half of the $1.3 trillion in student loan debt is held by 25 percent of graduates who are actually making a pretty high income.“

Hindsight is 20/20 when a student fails to complete a course of study, but a non-trivial percentage of individuals have no business entering college programs to begin with, let alone with the aid of publicly subsidized loans. Quite simply, good risk management demands that loans be withheld from students who lack minimum academic qualifications. Odds are heavy that it would be a favor to the taxpayer, and an even bigger favor to the erstwhile student. There are many degree programs that have low labor-market value, which are therefore likely to be poor investments for students and lenders. And a number of institutions have records of poor performance in preparing students for the labor market. It would be wise for anyone seeking additional education to avoid these schools.

Baum asserts that these issues must be addressed through better guidance for prospective students:

“Some schools don’t serve students well. Some students aren’t prepared to succeed no matter where they go to college. We just tell everybody: ‘Go to college. Borrow the money. It will be fine.’ … We don’t give people very much advice and guidance about where … when to go to college, how to pay for it, what to study.“

Baum goes on to offer a socioeconomic profile of individuals with a high propensity to default on student loans:

“The problem is that we have a lot of people actually borrowing small amounts of money, going to college, not completing [a degree] or completing credentials that don’t have labor market value. They tend to be older. They tend to come from disadvantaged, middle-income families and they’re struggling. [But] not because they owe a lot of money.“

For those who are not promising students, many skills can and should be developed by leveraging low-level employment opportunities. That may well be the most productive path for them, and we should not be shy about saying so, but mutually beneficial work arrangements between employers and these prospective workers are discouraged by wage floors and other regulations.

What isn’t mentioned in the NPR interview is that some individuals fitting the socioeconomic profile actually have excellent academic prospects, so borrowing might be worthwhile. And Baum notes that the great majority of students entering baccalaureate programs are very good credit risks. Subsidizing them with a “free” education is unnecessary and bad public policy:

“People have an image of a recent bachelor’s degree recipient who went to college for four years and is now 22-23 years old and is working at Starbucks. Those people are very rare. … People who earn bachelor’s degrees, by and large, do fine. … We should worry a lot less about 18-year-olds going off to college and borrowing $20,000, $25,000, for a bachelor’s degree.“

While Baum justifiably contends that many students are good credit risks, I do not subscribe to the notion that all student loans should be subsidized by taxpayers at below-market interest rates. The returns to education are such that most students can afford to pay market rates, but those rates must compensate lenders for the risk of default. Minimizing default risk on the lending side becomes an impotent afterthought in a world of lax academic standards and universal loan subsidies. Bad loans can only be reined-in by sober admission policies and wise selection of degree programs that have labor market value. For this reason, Paul Kupiec and Ryan Nabil of the American Enterprise Institute recommend reforms that would give academic institutions better incentives to ensure the success of their students by putting “skin in the game”:

“Colleges typically do not lend to students directly. Consequently, they have little incentive to ensure that the debts incurred by their students are repaid. So, like brokers in a predatory lending process, colleges and universities push their students to take on debt, regardless of their future ability to repay.“

To correct these misaligned incentives, schools would essentially pay a financial penalty when their former students, graduates or dropouts, default on loans.

“With ‘skin in the game,’ colleges will face pressure to control unnecessary costs and limit student indebtedness. Colleges will redouble their efforts to ensure that students graduate with the skills necessary to succeed in the job market. Resources will no longer be freely available for unnecessary non-educational university spending. To achieve these goals, the share of university-provided student funding must be large enough to give colleges the requisite incentives.“

Kupiec and Nabil briefly describe several possible mechanisms whereby schools could handle these kinds of demands.

Problems with crushing student loan debt are confined to certain segments of borrowers. Failure to complete a program, and degree programs that add little to a student’s labor market value, are prescriptions for default. Admitting unqualified students and offering weak degree programs are shortcomings of the schools themselves. Without fundamental reform, schools have little incentive to act responsibly. Furthermore, loan subsidies encourage excessive borrowing and fuel inflation in tuition. “Free college” proposals do not offer a serious solution for stemming these losses.

Math Made Him Seem So Calculating

08 Sunday May 2016

Posted by in Education, Security

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So good I just have to post it: “Economist Removed from American Airlines Flight for Doing Math“. University of Pennsylvania econ professor Guido Menzio fell victim to a non-mathmetician’s vigilance. From Catherine Rampell at WaPo:

“Maybe it was code, or some foreign lettering, possibly the details of a plot to destroy the dozens of innocent lives aboard American Airlines Flight 3950. She may have felt it her duty to alert the authorities just to be safe. The curly-haired man was, the agent informed him politely, suspected of terrorism.“

The first post linked above also has this little anecdote from 2003:

“At Heathrow Airport today, an individual, later discovered to be a school teacher, was arrested trying to board a flight while in possession of a compass, a protractor, and a graphical calculator. …  Authorities believe she is a member of the notorious al-Gebra movement. She is being charged with carrying weapons of math instruction.“

Mathematics has always seemed a little threatening to many people, but apparently social justice “educators” at Teach For America are telling minorities that “Math is the ‘Domain of Old, White Men’“. That is from David Huber at The College Fix. Huber quotes a story from EAG News.org:

 “Radical Math was created by educator Jonathan Osler several years ago while teaching at El Puenta Academy in New Jersey. Osler taught Radical Math along-side Cathy Wilkerson, a former member of the Weather Underground Organization (with Bill Ayers) who once participated in a plot to detonate a nail bomb at a dance for military personnel at Fort Dix.

Radical Math provides hundreds of social justice math lessons obviously meant to indoctrinate. For example, lesson titles include ‘Sweatshop Accounting,’ ‘Racism and Stop and Frisk,’ ‘When Equal Isn’t Fair,’ ‘The Square Root of a Fair Share’ and ‘Home Buying While Brown or Black.’“

Huber sums things up thusly:

“I cannot think of a better way to keep minorities ignorant of mathematics than by turning the subject into yet another showcase for historical grievances.“

 

Educational Free Fail

07 Monday Mar 2016

Posted by in Education, Subsidies

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Free college tuition would undermine the quality of higher education and increase its real cost to society. In fact, it may well cost many subsidized students more than its worth in lost work experience, wages and self-esteem. Those foregone opportunities are very real costs despite their consignment as “unseen” counterfactuals. They are mostly incremental to costs that are more obvious to the minds of statists promoting free post-secondary education.

Basic supply and demand analysis is the only requirement for understanding the tuition bubble in U.S. higher education, and the absurdity of heavy subsidies as a solution. Ariel Deschapell calls subsidies “worse than nothing“, comparing the approach to “throwing gasoline on a fire“. He’s quite right.

There is no question that increased subsidies lead to higher tuition and ultimately greater student debt. A recent paper published by the National Bureau of Economic Research (NBER) found that loan subsidies “fully account” for the increase in college tuition costs from 1987 – 2010. Another 2015 study published by the Federal Reserve Bank of New York reached broadly similar conclusions:

“We find that institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes, with a sizable pass-through effect on tuition of about 65 percent. We also find that Pell Grant aid and the unsubsidized federal loan program have pass-through effects on tuition, although these are economically and statistically not as strong. The subsidized loan effect on tuition is most pronounced for expensive, private institutions that are somewhat, but not among the most, selective.“

As Deschapell points out, most schools turn away a significant share of their applicants. How can that sort of demand exist, given the sky-high tuition charged by many colleges and universities? Subsidies. Subsidized tuition. Subsidized loans. When the cost to the end user of educational services is reduced at a given price, demand for those services increases. The papers linked above demonstrate the strength of the response.

Unfortunately, the supply of higher education is subject to relatively hard limits. Traditionally, the supply of educators, facilities and other learning resources has not been especially elastic. Technology has arguably made education more scalable, but only in terms of enrollment, and not at a zero incremental cost. Outcomes are more dependent than ever on a student’s intelligence, preparation and ability to remain engaged.

The supply of education is limited by still other factors. The long-term impact of inflation on costs is often more severe for service industries such as education, as they generally do not share in the productivity growth enjoyed by goods-producing sectors. Moreover, the increasing complexity of administrative functions, including education finance and regulatory compliance in an astonishing number of areas such as health, environmental and diversity goals (and certainly some self-inflicted administrative bloat), imposes cost escalation at many schools. Worst of all, the supply of education and acceptance of federally-subsidized student loans by certain institutions is restricted by federally-appointed accreditation agencies. This puts a lid on competitive pressures in higher education and inflates costs.

Higher demand and limited supply mean that some form of rationing is necessary. What mechanisms for rationing educational opportunities are available? Higher admission standards are sometimes a possibility, but public institutions may have little flexibility to raise standards, especially for resident students. Interestingly, diversity goals can lead to a de facto tightening of admission standards for some applicants even as standards for others are overridden or compromised. Declining quality of education is a “relief valve” to be avoided, but it is a very real possibility.

Higher tuition to the payer is an almost unavoidable consequence. That is why Deschapell likens free, givernment-paid tuition to an accelerant. Supporters of free tuition fail to recognize this relatively simple, causal chain.

When student debt is subsidized, it tends to mount faster than educational achievement and job prospects allow, leading to high rates of default. It also distorts the choices of would-be individual payers by inflating tuition costs. Passing the cost of education along to taxpayers, or “socializing the cost” as Deschapell says, completely severs the responsibility for marginal costs from the marginal benefit of education, an obvious prescription for a misallocation of resources. The decision to pursue more education, and the responsibility, should be in the hands of the same individuals: those in the best position to know whether it is viable: prospective students and their families. They know better than anyone the real opportunities foregone in terms of lost wages and the skills and experience that can be gained by staying out of school. Eliminating tuition from the decision would divert many more individuals into pursuits for which they are ill-suited.

College graduation or completion rates are disappointingly low, and correspondingly, dropout rates are very high, especially at community colleges. Moreover, profiles of the dropout population show that colleges have no business admitting a significant share of those individuals. This is damning evidence that we are already over-allocating resources to this activity. Additional subsidies won’t fix the problem.

There is no doubt that cross-sectionally, advanced education is associated with better employment prospects and higher incomes. And higher education can provide “social benefits” in excess of its direct value to students. Those facts do not imply, however, that generous inducements to questionable prospects will create positive outcomes. Quite the contrary. And in fact, the quality of education is vulnerable to dilution with increases in the number of poorly-qualified students.

A better way to improve the lifetime prospects of more people is to encourage production and employment opportunities with flexible wage policies, light taxes and less intrusive regulation. Competition at all levels of education should also be promoted; those steps would do more to improve outcomes than subsidies ever can. Throwing public money at education is generally unproductive, inflates tuition and drains the productive sector of resources. After all, the strength of that very sector must be relied upon to keep public education afloat. Individuals cannot be absolved of facing the real trade-offs inherent in their choices. Ultimately, by distorting decisions, free tuition cannot truly empower individuals and improve well being.

 

 

 

Rent Seeking For Social Justice At Mizzou

15 Sunday Nov 2015

Posted by in Education

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Mizzou

Pre-blog postscript: In the wake of the tumultuous week discussed below, tonight Mizzou’s football team, which has struggled on the field this year, defeated a very good squad from Brigham Young University. Despite my strong misgivings about the actions of team members last week, tonight I am very proud of Mizzou, white, black and gold. Go Tigers!

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There is weak justification at best for the uproar over supposed racism and social injustice at Mizzou (the University of Missouri’s main campus in Columbia, MO). A protest highlighted by a hunger strike by one graduate student, a boycott by football players, and the threat of a walkout by faculty in nine academic departments led to the resignation last week of the university system’s president and the Mizzou chancellor, who were accused of inadequate sensitivity to the grievances of African-American students. The broader context for the protest is a nationwide assault on free speech, especially on college campuses, with demands for “safe spaces” and “trigger warnings” to protect students from words and acts that they might find offensive. This sensitivity is unbounded, and there is no limit to the censorship and fascism it brings forth in its proponents. From such sentiments are book-burners made.

It is a shame to see a great university like Mizzou reduced to groveling at the feet of petulant children who, ostensibly, have come to be educated, and often with financial support from the school. Full disclosure: Mizzou is my alma mater, so I am especially saddened by these developments. At the end of this post, I provide details on incidents that occurred at Mizzou over nearly three months leading up to the protest. Several of the incidents involved unproven and even false claims by the protestors.

Like it or not, speech outside the classroom by students at public universities has broad protection under the First Amendment. According to Eugene Volokh:

“Most clearly, students generally may not be expelled, suspended, or otherwise disciplined for what they say in student newspapers, at demonstrations, in out-of-class conversations, and the like… even if it’s offensive, wrongheaded, racist, contemptuous, anti-government, or anti-administration. Of course, it’s not protected from university criticism. The university is itself free to publicly speak to condemn student statements that university officials find to be unsound or improper.“

There are exceptions to this protection in the case of “fighting words” and “incitement”, but that kind of offense must be proven before an individual can be punished. It is absurd to demand that a university engage in unconstitutional restrictions on speech. Even if that were legal, it is unreasonable to expect a university to effectively police all speech on campus.

The Mizzou administration did take action this semester in the only case in which an individual engaging in racist speech was identified. The offender was intoxicated and disrupted an organization’s private rehearsal (see below). Whether he used “fighting words” is unknown, but a “conduct process” is still underway in his case. In addition, mandatory diversity training for students and faculty was announced by the chancellor in early October. It appears that the president, responsible for four campuses, may have delegated responsibility for managing the controversies in Columbia to the chancellor, but the failure of the president to respond directly was taken as dismissive. But in fact, Mizzou already had processes in place to address diversity issues, and the chancellor was active in communicating the administration’s concerns and support to minority students via social media. Still, the protestors assert that they were ignored and that no action was taken, among other falsehoods (see below).

In addition to an apology and removal of the University System president for “inaction”, the protestors demanded that the University meet a number of other conditions. These included a “racial awareness and inclusion curriculum throughout all campus departments” to be vetted by “students, staff, and faculty of color.” The protesters also demanded: “an increase the percentage of black faculty and staff campus-wide to 10%“; a 10-year strategic plan to improve retention of “marginalized students“; increased funding “for the purpose of hiring additional mental health professionals — particularly those of color“; and increased “funding and personnel for the social justice centers on campus for the purpose of hiring additional professionals, particularly those of color…”

The demands of the student protestors (and their faculty supporters) represent an exercise in rent seeking. They are attempting to commandeer resources at the cost of academic and educational efforts not explicitly dedicated to the theme of diversity and inclusion. If all of the demands are met, damage will be sustained by nearly all fields of study at Mizzou.

One of my frequent complaints about the Left is their inability to understand that rewards in a market economy are not zero-sum. Instead, they are earned by creating new value to be used in trade and enjoyed by others. The rent-seeking process disrupts that flow of benefits by using the power of government to extract resources from others for one’s private benefit, which then yields a negative-sum outcome for society. However, the resources sought by the Mizzou protestors must come from a public educational system for which funding is scarce. Funds provided to Mizzou by the state of Missouri have fallen significantly over the years, yet state law prohibits tuition increases for undergraduate residents exceeding the growth in the CPI. While the protestors might view their demands as reparation for past and ongoing injustices, many are already subsidized by an institution of higher learning that is strapped, and one that is already at their disposal for purposes of building their human capital. They should avail themselves of that opportunity so they can use that capital later in positive sum activities.

I also think the protests at Mizzou are symptomatic of misplaced priorities on the Left. I highly recommend this excellent essay by Jason Whitlock, an African-American sports journalist who notes that the protests at Mizzou have been given rapt attention by the Left, while the far more serious problem of black-on-black violence receives proportionately little play.

Much like other demands for “social justice”, the Mizzou protestors do not recognize the counterproductive nature of their activities and the measures they advocate. Merit will always be relied upon as as a standard by which people judge others. In a market system, it is a fairly objective standard at that. To a truly neutral observer, diversity is fine, but it is beside the point, and forced diversity often leads to suspicions of unfair play and resentment.

I find the attitude of the protestors appalling on several levels: the lies and the rent-seeking behavior, the damage they will inflict on Mizzou and their fellow students, and their rejection of good-faith efforts to address their concerns. To cap it all off, please read the childish posts shown in this article, in which the Mizzou protestors selfishly complain that the terrorist attacks in Paris have taken attention away from them, going so far as to characterize as “racist” the relative balance of coverage. Simply disgusting!

Sadly, there have been threats of violence on campus in the wake of recent developments. This week, a white teen in Rolla, Missouri, 100 miles from Columbia, was arrested and is being held without bond for making posts on social media that threatened black students at Mizzou. At the same time, hostility and threats toward campus greeks led to a lock-down at fraternities and sororities. As to racism, there is no doubt that it exists, but Mizzou is not exceptional in that regard. On campus, I believe that more racial tension is borne out of agitation from protestors than by any racist sentiments held by others. When the protestors acknowledge examples of apparently neutral, non-racist behavior by others, they insist that the racism they are fighting at Mizzou is systemic. Appeasing these complainants requires a ongoing series of reparations in the form of financial support, control over hiring, quotas and mandatory indoctrination. But here’s a clue: the social justice rap will never win the rewards and respect that arise naturally from hard work.

MIZ – ZOU!

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Here are key events or claims that led up to the present brouhaha at Mizzou, along with my editorial comments:

August 14: The university announced that it would no longer offer direct subsidies to graduate assistants for the purchase of health insurance. The reason? Obamacare prohibits the kind of low-cost, “individual market” policies (per IRS interpretation) offered by many schools. Mizzou, however, promised to provide a one-time fellowship to cover the economic loss suffered by grad students in the fall semester. When students threatened a walk-out, the university reinstated the subsidies, but with the proviso that a later review would be necessary. This incident had nothing to do with racism, but it inflamed passions. An African-Americam grad student named Jonathan Butler was very upset, even though his family is quite affluent and more than capable of affording his coverage.

August – September 2015: Mizzou cancelled contracts with Planned Parenthood (PP) clinics in the wake of the release of videos showing PP officials discussing the sale of fetal “tissue”. There was pressure on the school’s administration to cut ties with PP and revoke the “refer and follow” privileges of an abortion surgeon from St. Louis. These developments were very upsetting to the campus Left, and while gender-equality activists probably thought they had a legitimate gripe, the action should not be conflated with racism. Nevertheless, Jonathan Butler listed this issue as one of his grievances, and it helped to broaden support for his cause among the student Left.

October 3: The President of the Missouri Student Association, Payton Head, claimed that several men riding in the back of a pickup truck screamed racial slurs as he walked across campus. That is awful, but unless he can identify the individuals or the truck, nothing can be done about that particular incident. It was featured in Butler’s grievance letter to the university. Presumably, the school needs to racially-sensitize anyone with access to campus.

October 6: A white student, apparently drunk, interrupts a rehearsal of the Royalty Court of the Legion of Black Collegians with racial epithets. The student was identified the next day and removed from campus by the Office of Student Conduct pending the outcome of an ongoing disciplinary procedure.

October 10: The Homecoming parade is interrupted when University System President Tim Wolfe’s car is surrounded by students from an organization called Concerned Student 1950. (1950 was the first year that black students were admitted to Mizzou.) Wolfe instructs his driver to back away from the students. With more space between the car and the protestors, the driver attempts to proceed slowly to the right around the group. In this video, Jonathan Butler can then be seen rushing toward the moving car and planting his knees into the bumper. He later accused Wolfe and his driver of running into him. As the narrator on the video states, if this were an insurance case, that sort of fraud might get Butler arrested. After a short blank segment on the video, a so-called “townie” and a few other Mizzou football fans step forward to act as a barrier between Wolfe’s car and the protesters. Ultimately, Wolfe asked police to remove the protestors from the parade route. That was characterized as evidence of neglect on Wolfe’s part. Andrew McCarthy notes the following about Jonathon Butler:

“By the way, the racism is apparently so bad at Mizzou that Mr. Butler has chosen to pursue his Master’s degree (in education) there after attending the university as an undergraduate. Now in his eighth year at Mizzou, he hopes, according to NBC News, ‘to become an advocate and ‘social entrepreneur.””

October 24, 2015: Human feces is discovered on the floor of a restroom in a university residence hall; it had been used to smear a swastika on the wall. This is now confirmed by a campus police report, though no photographs of the “poop swastika” have been produced. (Apparently, a one-year-old photo of similar graffiti was circulated by protestors). The “poopetrator” has not been identified. The act could have been inspired by anti-Semitism, white supremism, simple pranksterism (albeit viciously expressed) , or quite possibly fraudulent agitation meant to incite fears on campus. The incident really did incite fears when it was communicated on social media by Residence Halls Association President Billy Donley. The poop swastika was taken as additional evidence of a bad racial climate at Mizzou, though the affair is suspect.

November 3: Butler begins a hunger strike in an impromptu “tent city” on campus. A student boycott of classes is announced the next day. I have strong doubts about Butler’s credibility (see below) and whether the hunger strike was authentic. He did not look or act like a hungry man before he ate his first post-strike sandwich, but I could be wrong.

November 8: Black football players announce their support of Butler by refusing to practice or play until President Wolfe apologizes and resigns. The next day, Coach Gary Pinkel tweets his support for the black players, and the athletic director agrees. Many of the white players also express support for the player boycott by appearing in a group photo, but it has been reported that not all of them agreed. (I personally believe that the whole lot of the boycotters were played by Butler and his organization.) On November 13, Coach Pinkel resigns, effective December 31, but the reason is a recent diagnosis of non-Hodgkins lymphoma (non-fatal). Some things are simply more important than in-fighting at the university. Coach Pinkel’s announcement, as sad as it is, may well help to defuse the immediate tensions.

November 10: President Wolfe and Chancellor R. Bowen Loftin resign. Butler ends his hunger strike with a sandwich as his friends urge him on with the expression “Yay N—–“, an utterance that may strike some as hypocritical. The football player boycott ends the next day.

On the evening of November 10 at about 11 p.m., Payton Head, the student body president, posted the following on Facebook:

“Students please take precaution. Stay away from windows in residence halls. The KKK has been confirmed to be cited on campus. I’m working with the MUPD, the state trooper [sic], and the National Guard.“

The news spread quickly. Head deleted the post by 11:30 and later apologized and accepted blame for spreading false information. Good for his accountability. His advice at that time was to trust only the @MUalert system, which had posted: “There is no immediate threat to campus. Please do not spread rumors…” 19 minutes before Head’s KKK post.

Proof of Concept: School Choice vs. Failing Publics

09 Monday Nov 2015

Posted by in Education, School Choice

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The evidence that school choice is associated with better educational outcomes has been mounting. Given the poor performance of so many public schools, it is time to reject the “sanctity” of their monopoly privilege. The link above emphasizes the promise of choice as a reform for public schools in the U.S. (as do several other links below from the Show-Me Institute and elsewhere).

It is implausible to suggest that the opportunities afforded by choice could make things worse than public-school outcomes. Poorly-served students and families have too much to gain from broadening their educational options and they know it. A recent survey of African-American parents of school children found that more than 75% of the respondents were interested “in obtaining a voucher to cover the cost of private or parochial school tuition for [their] children“. A majority agreed that:

“… I should be able to enroll my child in the school I think will give my child the best educational opportunity. If my choice is a private or parochial school then I should be allowed to use the same tax dollars allotted to every child in public school to cover the cost of their tuition.“

Choice should not be viewed as a threat to the public school system, although that is a familiar narrative issued by school-choice opponents. In fact, it will create new opportunities for public schools to excel, taking advantage of the benefits of specialization that are well-known in most walks of life. Choice and competition will either reform or weed-out the worst-performing schools and will encourage a rationalization of the administrative bloat so characteristic of public institutions. That’s all to the good, but by weakening schools’ market power, choice will change the relationships between public schools and families. Apparently that is threatening to vested interests, which underscores the importance of reform.

The Netherlands has had a system of school vouchers in place for almost 100 years, and research indicates that it has been highly successful:

“Specifically, access to private schooling has helped Dutch students. A 2013 study reveal[ed] strong positive effects for students using the voucher program to attend private schools. The effects were anywhere between 0.2 and 0.3 standard deviations, which would move a student at the mean of the standard bell curve of student performance up 10 or so percentile points (from a 50 to a 60).

Given these large effects, it shouldn’t be surprising that in a system where two thirds of the schools are private, we see strong academic performance. What’s more, according to the National Center on Education Statistics, Dutch schools spend on average $1,500 less per student per year than American schools do.“

A recent study from the CATO Institute demonstrated the long-run impacts of school choice on several types of outcomes. Little wonder that choice is described as a “Moral and Financial Imperative” (video). School choice is also an option for providing better educations to students in rural areas, despite the worn-out argument that distances make it impossible. Under today’s archaic structure, course offerings at many rural schools are necessarily limited, but new technology and choice programs can allow those schools to specialize and give their local students broader access to educational resources.

Teacher’s unions have been consistent opponents of school choice. They view choice as a threat to their members’ job security and their own ability to negotiate favorable contract terms. Perhaps, but the goal of improving educational outcomes cannot be subjugated to the goals of union monopsonists. When it comes to education, the schools should focus on serving children and their parents, and parents in failing schools want the kind of solution choice can offer.

Several months ago, a post here on Sacred Cow Chips discussed an entertaining question posed by Don Boudreaux: What if supermarkets were like public schools? To quote Boudreaux directly:

“In the face of calls for supermarket choice, supermarket-workers unions would use their significant resources for lobbying—in favor of public-supermarkets’ monopoly power and against any suggestion that market forces are appropriate for delivering something as essential as groceries.“

Parental control is a critical change needed in our schools. Schools should never be placed in a position exceeding the authority of parents over their children, even if public funds are involved. Teachers and administrators of public schools must learn to treat parents like customers. The only way to assure that kind of responsiveness is to give parents a choice.

Universal Pre-K Dumb-Down

30 Friday Oct 2015

Posted by in Education, Welfare State

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Can the middle class be sold on federal pre-kindergarten dependency? Is pre-K always beneficial to children? All children? One of many issues agitating the “government-must-do-something” crowd is universal pre-kindergarten. It’s a favorite topic of the Socialist-Democrat Bernie Sanders and, more recently, it became a campaign promise from the Democrat-Socialist Hillary Clinton. It’s typical of the freebies these two presidential candidates are compelled to promise their base. While federal funding of universal pre-K is often billed as way to assist low-income working families, the subsidies proposed are not well-targeted: Clinton’s proposal calls for pre-K subsidies for middle-class families as well. A “Pre-School For All” proposal by President Obama in 2013 required $75 billion in funding. These kinds of broad-based transfer payments aren’t cheap.

In addition to the expense, it’s not clear that pre-K schooling is beneficial to all children. In Vox, Ezra Klein describes a recent study on the efficacy of a pre-K program in Tennessee (hat tip: John Crawford). The selection of children for the pre-K and control groups was randomized by virtue of a “lottery” for admission in regions experiencing excess demand. Here is Klein’s description of the results:

“At the end of pre-K, the results look pretty much as you would expect: Teachers rates [sic] the children who went through pre-K as ‘being better prepared for kindergarten work, as having better behaviors related to learning in the classroom and as having more positive peer relations.’

The problem is those results dissipate by the end of kindergarten — by then, the group that attended pre-K is no better off than the group that didn’t — and then begin to reverse by the end of first grade. By the end of second grade, the children who attended the pre-K program are scoring lower on both behavioral and academic measures than the children who didn’t.“

Klein cites two other “high-quality” studies (one by Head Start) that are consistent with the findings in Tennessee. He also notes some weaknesses of earlier studies suggesting that pre-K provides developmental benefits.

Some prominent advocates of pre-K insist that there are long-term benefits that the recent studies fail to capture. If so, it is hard to square that belief with such negative results after three years. I suspect that there are significant developmental rewards for children who spend their days with family members or even family friends, and I am skeptical that improved socialization can be gained from full-time attendance at a public facility. Perhaps some children benefit, but clearly not all.

None of this is to suggest that low-income parents would not benefit economically from additional subsidies for early education. To the extent that the parents are able to earn more income, the entire household will benefit and perhaps even society will benefit. But this is a social safety net issue at its base, not a broad-based social need. Ideally, one’s prospects for income should have a strong bearing on fertility decisions. Individual families should not expect others to bear the costs. And as for the safety net, let’s face it, great parts of it would be unnecessary in the absence of the negative work and family incentives inherent in many transfer programs. Neutralizing the costs of raising children compounds the bad incentives.

Like so many other statist misadventures, the populist appeal of universal pre-K is a desire for a freebie at the expense of others. The politicians Sanders, Clinton and Obama understand that, and they recognize it as another pillar of support for the great federal highway of cradle-to-grave serfdom.