EDUCATION DECISION- MAKING IN A MIXED ECONOMY Chapter 2 &4 in Guthie Dr. Len Elovitz

2 Peabody College Series. Copyright © Allyn & Bacon 2009 Objectives Understand the web of forces within which our education system functions. Gain a working knowledge of how change within these forces will impact the education system.

WOULD YOU CLASSIFY EDUCATION AS CONSUMPTION OR INVESTMENT? CONSUMPTION – PAID FOR BY EXPENDITURES FROM HOUSEHOLDS OR GOVERNMENTS ON THEIR BEHALF USING TAXES COLLECTED FROM THEM. INVESTMENT – HUMAN CAPITAL - SCHOOLING ENDOWS INDIVIDUALS WITH KNOWLEDGE AND SKILLS THAT ENABLES THEM TO BE MORE PRODUCTIVE AND THEREBY RECEIVE HIGHER EARNINGS.

IS EDUCATION A PUBLIC GOOD OR A PRIVATE GOOD? PRIVATE ABILITY TO EARN MORE MONEY, ENJOY A HIGHER STANDARD OF LIVING AND BETTER QUALITY OF LIFE MORE INTERESTING JOBS POSSIBILITY OF MORE SCHOOLING UNEMPLOYMENT LESS LIKELY MORE OPTIONS FOR USE OF LEISURE TIME INFORMED CONSUMERS – MAKE BETTER USE OF RESOURCES BETTER DIET AND HEALTH HABITS = LONGER HEALTHIER LIFE

PUBLIC ENLIGHTENED CITIZENRY THAT IS NECESSARY FOR DEMOCRACY MORE PRODUCTIVE CITIZENS EARN MORE AND PRODUCE MORE RESULTING IN HIGHER TAX YIELDS AND INCREASED PRODUCTION THAT CONTRIBUTES TO AN IMPROVED QUALITY OF LIFE FOR ALL REDUCTION IN CRIME RATE

IS EDUCATION MORE OF A PUBLIC GOOD OR A PRIVATE GOOD? THEN WHO SHOULD PAY FOR IT? ARE THERE PUBLIC BENEFITS TO PRIVATE EDUCATION? IS THERE A DOWNSIDE?

WHAT IS THE OUTCOME OF THIS CONFLICT? WHAT ARE WE SEEING? VOUCHERS CHARTER SCHOOLS EROSION OF PUBLIC SUPPORT

WHAT COULD BE THE EFFECTS OF EXTERNAL ECONOMIES – SAVINGS ON REDUCED EDUCATION? INCREASED DROPOUTS UNDER-EMPLOYMENT INCREASED WELFARE HANDICAPPED INSTITUTIONALIZED

WHAT CONTROLS PRODUCTION DECISIONS IN THE PRIVATE SECTOR? SUPPLY AND DEMAND - PROFIT WHAT DO HOUSEHOLDS CONTRIBUTE? RESOURCES 1. Labor 2. Money WHAT DO PRODUCERS CONTRIBUTE? –GOODS AND SERVICES

WHAT CONTROLS PRODUCTION DECISIONS IN THE PUBLIC SECTOR? SUPPOSED TO BE GREATEST GENERAL WELFARE WHAT IS IT OFTEN? POLITICS EFFICIENCY?

HOW ARE POLICY DECISIONS MADE IN EDUCATION IN U.S.? STATE AS OPPOSED TO FEDERAL LOCAL CONTROL - IS IT ERODING? WHY? REDUCTION IN POWER OF SUPT. & BOARD MORE REGULATIONS AND CONTROL FROM ABOVE NEGOTIATIONS FROM BELOW SHARED DECISION MAKING

12 Peabody College Series. Copyright © Allyn & Bacon 2009 Purposes School finance systems are designed to achieve multiple objectives, some of which conflict with one another. The broad objectives of most school fiance systems are:  To assure every district can attain a level of revenue considered to be “adequate” or a least “basic”  Promote equity across districts in terms of revenues and tax effort by providing more aid to districts with relatively high need, relatively low wealth, relatively high tax effort, or some combination of these characteristics.  Reimburse districts for a portion of costs associate with provision of high-expense programs (such as special education) and non- instructional programs (such as transportation), and  Provide districts with an ability to generate supplemental revenue, sometimes within strict limits that control absolute per pupil spending, annual increases in spending, or changes in property tax revenue or tax rates.

13 Peabody College Series. Copyright © Allyn & Bacon 2009 Complexity School finance systems are complicated because:  They embody multiple objectives  They are tailored to characteristics of numerous districts  They distribute huge sums of revenue, and  They have developed incrementally over long periods of time, often layering new features on top of old ones.

14 Peabody College Series. Copyright © Allyn & Bacon 2009 Parental Interests Student’s Interests Polity’s Interests

15 Peabody College Series. Copyright © Allyn & Bacon 2009 The technical influences on policy Demography Economy

16 Peabody College Series. Copyright © Allyn & Bacon 2009 Demography Demography is influenced by two things: Size Geographic, racial/ethnic, age distribution of the population

Population Migrations 1.Manifest Destiny – 18 th & 19 th centuries 2.European Immigration – 19 th & 20 th centuries 3.Shift of Rural Blacks from south to cities – from late 1930’s through WWII 4.Shift of urban whites to suburbs 5.Latin American & Asian Immigration – 75% of all immigrants Current movement from northern to southern states

18 Peabody College Series. Copyright © Allyn & Bacon 2009 Recent societal developments influencing demography 1 new person every 11 seconds in the United States –1 birth every 8 second –1 death ever 14 seconds –1 immigrant every 26 seconds Geographic relocation of population –Move from North and Midwest to South and West »Greater political influence of these states »Retirees spending more in these states »“Brain drain” of kids from North and Midwest with history of pre-K readiness commitment

Immigrant population is growing 6.5 times faster than the native-born population Between 1979 and 2003 the number of children who spoke another language at home rose 3,800,000 to 9,900,000 From 9% to 19 %

Age Distribution US population is aging rapidly Median age in 1950 – 30.2 Median age in 2000 – 35.3 Decreased birth rates and increased longevity Public school students and their parents constitute a smaller percentages of the electorate

21 Peabody College Series. Copyright © Allyn & Bacon 2009 Influence of racial and ethnic composition: Schools react to servicing greatest need –Ex. 19 th century immigration from the South and East of Europe intensified the assimilation function of the public schools

22 Peabody College Series. Copyright © Allyn & Bacon 2009 Economy Two economic dimensions influence policy: –The level of overall economic development –The rate of economic growth

23 Peabody College Series. Copyright © Allyn & Bacon 2009 Summary of Future Trends Demographic Trends affecting the United States workforce Technological Change affecting the dynamics of workforce and productivity Economic Globalization affecting the whole of the United States economy Workforce Implications affecting the demands placed on the American education system

24 Peabody College Series. Copyright © Allyn & Bacon 2009 Summary of Secular Trends The 21 st Century At Work: Forces Shaping the Future Workforce and Workplace in the United States  Demographic Trends  Technological Change  Economic Globalization  Workforce Implications

25 Peabody College Series. Copyright © Allyn & Bacon 2009 Demographic Trends Workforce will continue to increase in size, but at a considerably slower rate Composition of the workforce will be more balanced by age, sex and ethnicity Slower workforce growth may make it more difficult for firms to recruit workers during periods of strong economic growth Many overseas trading partners of the U.S. are undergoing slower workforce growth, offering a new competitive advantage to the U.S. IS THIS ALL TRUE TODAY?

26 Peabody College Series. Copyright © Allyn & Bacon 2009 Technological Change Pace of technological change will accelerate in the next years Synergies across technologies and disciplines will generate advances in research and development, production processes, and the nature of products and services. Further technological advances are expected to continue to increase demand for a highly skilled workforce, to support higher productivity growth, and the change the organization of business and the nature of employment relationships. What skills will they need?

27 Peabody College Series. Copyright © Allyn & Bacon 2009 Economic Globalization The reach of economic globalization will be even more expansive than before, affecting industries and segments of the workforce relatively insulated from trade-related competition in the past The new era of globalization is partly the result of inexpensive, rapid communications and information transmission enables by the IT revolution. Jobs will be lost in some sectors and will be counterbalanced by employment gains in other sectors.

28 Peabody College Series. Copyright © Allyn & Bacon 2009 Workforce Implications Rapid technological change and increased international competition place the spotlight on the skills and preparation of the workforce, particularly the ability to adapt to change technologies and shifting product demand. Growing importance of knowledge-based work also favor strong non-routine cognitive skills, such as abstract reasoning, problem- solving, communication and collaboration Education and training become a continuous process throughout life involving training and retraining. Technology mediated learning offers the potential to support lifelong learning both on the job and through traditional public and private education and training institutions. Shift away from more permanent, lifetime jobs toward non- standard employment relationships such as “e-lancers” or self- employed workers. What level of education should the public pay for?

29 Peabody College Series. Copyright © Allyn & Bacon 2009 Summary of the influence of these trends on education Productivity Ratio relating measurement of output of goods and services relative to inputs Critical to nation’s wellbeing –productivity high, standard of living high – productivity low, standard of living does not rise and may decline Education plays a big part in productivity achieved

30 Peabody College Series. Copyright © Allyn & Bacon 2009 Summary of trends cont’d Debt The United States debt extends internationally Second only to Britain Influences allocation of resources to education system Current Status

31 Peabody College Series. Copyright © Allyn & Bacon 2009 Summary of trends cont’d International Competition Trade balance uneven United States goods and services too expensive for the world market Education reacts to the needs of the workforce (Does it?)

Education in the United States An industry central to our economy Peabody College Series. Copyright © Allyn & Bacon

33 Peabody College Series. Copyright © Allyn & Bacon 2009 Demand for schooling: Enrollments –Size – projected to increase to 50 million by 2014 –Grade levels – PK-8 increasing more than HS –Types of schooling Nonpublic –About 10% of total enrollment ( higher in Northeast) –Mostly Catholic –Growth of Evangelical Christian & others Homeschooling – 2.2% of students –Geographic variation

34 Peabody College Series. Copyright © Allyn & Bacon 2009 Governmental Arrangements Broker between those demanding school services and those willing to supply instruction Tenth Amendment Decentralization –Roles of the levels of government federal state local

Local Control 128,000 school districts in ,000 in 1980’s In the 1920’s each board member represented 200 citizens today it’s 3000 New Jersey

36 Peabody College Series. Copyright © Allyn & Bacon 2009 Financial Costs Spending on elementary & Secondary Education in the US about $555 billion per year Add in post-secondary and it accounts for about 5% of the GDP PPE (per pupil expenditure) varies by state Increase of 900% over the last 60 years Variances and cause

37 Peabody College Series. Copyright © Allyn & Bacon 2009 Supplier of School Services: Personnel Huge U.S. employer Current characteristics of the workforce Future trends

38 Peabody College Series. Copyright © Allyn & Bacon 2009 Student Outcomes No Child Left Behind Act of 2001 National Assessment of Educational Progress (NAEP) - “The Nation’s Report Card” tracks trends in student achievement in math & reading –Trends in International Mathematics and Science Study (TIMSS) Program for International Student Assessment (PISA)

39 Peabody College Series. Copyright © Allyn & Bacon 2009 Ecology Economics Demographics Technology