Tuesday, September 07, 2010

OECD Report: Education at a glance- or in a fog?

The Irish Times today covered the publication of the latest OECD Education at a Glance and some of the domestic response to it. Like most OECD publications, this series provides lots of useful statistics and information generally to a fairly high standard.
I haven't read the actual report but two things struck me from the coverage. In the first article it says " The report shows that on average across OECD countries, a man with third-level qualifications will generate $119,000 (€93.386) more in income taxes and social contributions over his working life than someone with just an upper secondary level of education. It says that even after taking account of the cost to the public exchequer of financing degree courses, higher tax revenues and social contributions from people with university degrees make third-level education a good long-term investment."
Assuming they are being quoted correctly, this is a bad mistake by the OECD. If you want to do a Cost-Benefit analysis of investment in education then you need to measure the extra output generated which is proxied by the extra income and not the additional tax revenue generated. The latter is a transfer from one group to another so its irrelevant. In a country with high marginal income taxes the extra tax yield from additional education is higher but obviously this doesn't mean that education is a "better investment" in such countries. Unfortunately this fallacy is quite common though I am surprised to see it apparently emanating from the OECD. The OECD argument would only make sense if the purpose of public policy was to minimize net public outlays on education. In which case, one should simply close the sector down or privatise it.
The second point that struck me is the concentration in the commentary on education expenditure & Ireland's low ranking by this criterion (as a share of GDP). This data is openly referred to as "league tables" and various people in the education sector as well as opposition politicans, quoted in the second article, are content to moan about it.
Now when league tables are discussed in an education context it usually refers to comparisons of schools based on exam results. Cue educationalists and teachers unions saying "Oh no crude league tables, don't take into account blah blah... so we can't have that". Far better to keep parents in the dark about one of the most important decisions they will ever make: its for their own benefit. But such tables would at least refer to outputs and could, with a little work, be made into a Value Added measure. However these OECD numbers just released are measures of one input as a share of another variable that take nothing into account. What does it mean that Ireland spends less on education, as a % of GDP, than say Belgium? Absolutely nothing. So it seems to me that it is completely inconsistent, not to say self-serving, to decry one set of crude comparisons but endorse another totally meaningless set.

6 comments:

Enda Hargaden said...

Too right. The cries of complaint are all the more amusing when you consider that GDP is 17% higher than GNP, thus biasing our education % down.

Martin Ryan said...

'T ain't what you do it's the way that you do it?

That's what gets results:

Billy May

Ernie Ball said...

Is it standard practice now in academic debate to paraphrase arguments with which one disagrees with "blah blah blah" the better to dismiss them? The argument you so paraphrase claims that such "league tables" are specious. The sarcastic reply that it is "better to leave parents in the dark", which you take to be some sort of knock-down argument amounts to saying: better specious data than none at all. Can I take it that that is an accurate characterisation if your view?

See? Anyone can play.

Anonymous said...

The Shorter Kevin Denny:

Oh, no, OECD reports don't take into account blah blah . . . so we can't have that.

I guess you think it's far better to keep governments in the dark about one of the most important decisions they will ever make...

Kevin Denny said...

Ernie, I think the arguments are well known & it wasn't the place to rehearse them so "blah blah" neither dismissed nor endorsed them. My subsequent comment did not use sarcasm, that is precisely the view of those who oppose "league tables": they think it is better if this information is not available.
The post, if you read it moderately carefully, was not fundamentally about the merits of "league tables" which I have discussed elsewhere in more detail. However I suggested that such data has merit (& clearly parents think so since the vast majority want to see it), it is measuring output, and could easily be modified to be made better i.e. turned into a Value Added type measure. Such information is routinely provided in numerous countries (UK,US, Netherlands, Norway, parts of Australia & Canada for example).You would need to have a spreadsheet to do this but I believe the Department of Education has one (that is sarcasm).
Those who are opposed to publication of such data, who want to keep parents in the dark, have very superficial arguments and simply say "no" without any alternatives. When cars or planes were invented they weren't very good but no one sane said "we should stop making them". People improved them. The same principle applies here. There is a whole body of science devoted to making data useful, its called statistics (more sarcasm) and it can and should be used in this context. There was a one day conference dedicated to this topic in London recently.
So your characteristic of my view is entirely specious.

Kevin Denny said...

Dear Anonymous, I think I see why you are anonymous since you have completely misunderstood my comment in what seems to be a very careless reading.
Clearly I am not opposed to the publication of the data. The more the better and the OECD do a great job in general. I argued that the interpretation of the data, as expressed in the article, was incorrect. It is well known that in doing a Cost Benefit analysis of public expenditure you measure the extra output/income arising. The additional tax revenue is uninformative.