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

2. 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.
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3. 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.

4. IS EDUCATION A PUBLIC GOOD OR A PRIVATE GOOD?
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

5. 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

6. IS EDUCATION MORE OF A PUBLIC GOOD OR A PRIVATE GOOD
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?

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

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

9. 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

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

11. 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. 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.
Peabody College Series. Copyright © Allyn & Bacon 2009

13. 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.
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14. Parental Interests Student’s Interests Polity’s Interests
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15. The technical influences on policy
Demography
Economy
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16. Demography Demography is influenced by two things: Size
Geographic, racial/ethnic, age distribution of the population
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17. Population Migrations
Manifest Destiny – 18th & 19th centuries
European Immigration – 19th & 20th centuries
Shift of Rural Blacks from south to cities – from late 1930’s through WWII
Shift of urban whites to suburbs
Latin American & Asian Immigration – 75% of all immigrants
Current movement from northern to southern states

18. 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
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19. Immigrant population is growing 6
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 %

20. 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. Influence of racial and ethnic composition:
Schools react to servicing greatest need
Ex. 19th century immigration from the South and East of Europe intensified the assimilation function of the public schools
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22. Economy Two economic dimensions influence policy:
The level of overall economic development
The rate of economic growth
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23. 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
Peabody College Series. Copyright © Allyn & Bacon 2009

24. Summary of Secular Trends
The 21st Century At Work: Forces Shaping the Future Workforce and Workplace in the United States
Demographic Trends
Technological Change
Economic Globalization
Workforce Implications
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25. 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?
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26. 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?
Peabody College Series. Copyright © Allyn & Bacon 2009

27. 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.
Peabody College Series. Copyright © Allyn & Bacon 2009

28. 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?
Peabody College Series. Copyright © Allyn & Bacon 2009

29. 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
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30. 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
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31. 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?)
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32. Education in the United States
An industry central to our economy
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33. 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
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34. 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
Peabody College Series. Copyright © Allyn & Bacon 2009

35. Local Control 128,000 school districts in 1920 15,000 in 1980’s
In the 1920’s each board member represented 200 citizens today it’s 3000
New Jersey

36. 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
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37. Supplier of School Services: Personnel
Huge U.S. employer
Current characteristics of the workforce
Future trends
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38. 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)
Peabody College Series. Copyright © Allyn & Bacon 2009

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