After the financial crisis in 2008, the United States is experiencing a lower steady growth. Compare to some high growth economies around world like China and India, the growth rate of the United States is a little worrisome. It is true that in the short run, the United State should not be worried of being “caught-up” by other countries, and is hard for a developed country to have a substantial economic growth. But is there really no way to bring the United States back on the “rapid growth track”? While there are different approaches to this question, one reasonable way to increase and even maintain a relatively rapid growth, is through the continuous improvement of technology. As one of the most important factor in the technology development function, an emphasis on education is necessary.
Although the logic flows perfectly here, is there any evidence on the correlation between education and economic growth? In the article Investment in Education and U.S. Economic Growth written by Dale W. Jorgenson and Barbara M. Fraumeni, they found that human capital investment coupled with nonhuman capital (comprised of educational buildings and equipment) investment accounted for a predominant share of economic growth, as they stated in the article: “Education will continue to predominate in the investment requirements for the revival of more rapid U.S. economic growth.”
There is no doubt that the United States has one of the best education system in the world, and a large supply of human capital is believed to be one of the reasons that kept the economy strong. The U.S. government spends $102.26 billion on education in year 2015, which is above most of the countries. But large spending does not equal to large returns. Since it is hard to determine how much money is needed for a perfect education system, the focus of this post is not how much more that the government need to invest, but how can we utilize the current system to make the whole process more efficient. This can be done is several ways, a post by Lindsey Burke and Rachel Sheffield has included 13 possibilities. Here, only one of the 13 policies will be advocated, which is that “congress should prevent any new federal funding of national standards and assessments”.
During Obama’s presidency, states were pushed to adopt the Common Core State Standards Initiative (CCSSI), which established national standards and tests to define what public school students will learn. This program poses constrains on educational freedom on schools in the United States. Common core standards focus more on high-level thinking skills, which will cause academic rigor to start early, even as early as preschool. Because thinking patterns develops while learning more basic skills, it is still up for debate that whether having a national standard is a good way to prepare American’s young generation for international competitions.
More importantly, these massive changes within the system further complicated the process of applying for grants, since schools need to proof that they have met the federal benchmarks to receive the grant. It also puts more pressure on teacher for student performance and accountability, which pushes teachers to focus more on test-taking skills rather than development of the students.
Is it a good thing for every student has a bachelor’s degree? Unlike high school degree or other equivalence, which provide basic reading and mathematical skills, college degrees are more focused on special trainings. If every student in the economy is a college graduate, this will not only create an excess labor supply, but also increase the demand for higher education. Moreover, college graduates would compensate and take the lower-entry level jobs due to the high demand for jobs. This increases potential human capital waste which defeats the purpose of having a high degree of education. Education system in China is in a similar situation. There is a national standard for what is needed to be taught from K1-K12, and a nation-wide test that holds once a year measures the “ability” of students. Once admitted into college, there is a very low barrier to graduation. A large number of college graduate diluents the value of the diploma, and young people struggle to find a job post-graduation. There is no specific data on the unemployment rate in China, yet a Bloomberg post suggests that the hidden unemployment rate is close to 13%. This high unemployment could be partially resulted by the inadequate education system. The example of China should ring an alarm to the U.S. federal government.
In conclusion, education reforms like common core standards is not the optimal way to make the system better. Even though education is a big part of economy growth, by forcing students to be prepared for the international competitions will not result a rapid economic growth but more likely an adverse effect. Therefore, the federal government should be more comprehensive when considering education reform, and that needs more experiments and further research.