TQ in MR

I have an article in this month’s Melbourne Review, entitled How Can We Improve Teacher Quality?

(Incidentally, the Ozeconblogosphere is well represented in the magazine. Gans and Quiggin also have a piece on emissions trading.)

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18 Responses to TQ in MR

  1. conrad says:

    That was interesting, but simply citing a single study which found that teachers didn’t manipulate scores isn’t very convincing. Working in a university, where everything is manipulated at every level (I’m sure I don’t need to tell you that), I’d be very surprised if teachers didn’t start doing it too (especially if you start attracting smarter ones). In addition, I’m not sure how meaningful it is to look at overall figures. A more interesting analysis would be to look at particular areas of shortage. So, for example, if we paid, say, people with degrees in mathematics (probably engineers given that this group is dissappearing) $10,000 more, how many more teachers would we expect, compared to, say, history teachers? My bet is that there would be a huge differential between these groups, and thus paying more to attract them really means paying a lot more, which might well cause resentment amongst those that miss out.

    More philopsophically, I also wonder how well this scheme will work in the longer term. Teachers as a whole are quite left wing group (there are still many communists in France!). I imagine they are therefore able to justify working in comparatively crappy conditions by rationalizing it as social altruism. Are you still going to attract people with this sort of mentality if you turn schools into little competitive enteprises and are they replaceable by people with a more competitive mindset given the wages problem if not?

  2. invig says:

    Merit pay on some objective basis is stupid.

    Why can’t the school overall be incentivised to retain their better teachers, and let them figure out who deserves it???

    Jesus Christ I am starting to get impatient with you frigging economists on this issue!

  3. Patrick says:

    That was what Kennet was starting to do.

    I can think of an easy way to do it – have no state schools and universal means-tested $15,000 vouchers, indexed to a hybrid of CPI and wages (because wages are the major part of schooling).

    Suggested thresholds: earn more than $100,000 and you get 2/3rds, earn more than $150,000 and you get 1/3rd, earn more than $200,000 and you get nothing.

    Add an increment to the thresholds of about $15,000 per school-age child and hey presto.

    I imagine they are therefore able to justify working in comparatively crappy conditions by rationalizing it as social altruism.

    No, they get a chip on their shoulder and mutually re-inforce their unbelievable sense of entitlement. The others think that they are paid enough for their needs and work hard at making sure that their conditions are as good as they can make them.

    I think salaries will have to increase exponentially to attract people who derive no sense of reward from the experience.

    I think my suggested solution removes all the problems you contemplate, btw.

  4. invig says:

    Catallaxy raises some good points.

  5. conrad says:

    (1) Teachers in areas where there is market competition (maths, science etc.) are in shortage, so I couldn’t blame them for complaining (or more problematically, leaving). Just saying that they whinge a lot (which they probably do) doesn’t solve the problem.
    (2) I can’t see vouchers doing much unless they add more money to the system. Since many Australian’s would prefer big houses and fancy cars to paying for a decent education, it means you still have crappy schools. I imagine this is a good case of market failure if the end result the government wants is a population with a higher level of education than now — people arn’t willing to pay the real costs, even those that can afford it.

  6. Patrick says:

    No, but identifying what they are really doing is always better than kidding yourself that they are cheerfully sacrificing financial reward just because they are lefties.

    That’s because you are a lefty and have an irrational dislike/mistrust of markets. In reality, markets, and the competition they entail, are remarkable forces for making things better and cheaper.

    Are you sure? Think about, eg, the proportion of a house’s price that reflects its proximity to schools. Or consider the number of parents that do pay tens of thousands a year. Finally, consider the distortionary effect of a system which encourages people to take the ridiculous position you describe by encouraging them to believe that ‘education’ is somehow specially exempted from the realm of ‘money’.

    (yes, I am seriously arguing that some people would be willing to pay more for education if it wasn’t free – it is a lay-down misere if you look at it like this: some people would be willing to pay more for education directly (ie of their luvvies, than they are indirectly, via their taxes, ie of everyone else’s brats)

  7. conrad says:

    I’m not lefty at all Patrick — I’m just being realisitic. I think lots of people are willing to pay for education (40% of people in fact, looking at the latest private school figures), but then, lots of people arn’t also. As long as enough people are in this second group, you are going to have lots of problems. Also, are you really saying that vouchers are going to pump heaps of new money into the system or cause new great schools to open/expand? Most good schools are already at capacity. Also, this argument about house prices and public schools is incorrect. I live in a Melbourne suburb which has one of the best public schools, and I guess it inflates the price of houses around $30,000, which is, over six years, diddleys, especially if you have mulitple children.

    I’m also not saying that education is exempted from the realm of money (far from it ). What am I saying is that the amount you are talking about if you really what “maths people with mathematics degrees” (or whatever the latest shibboleth is), is a lot. An FOF of mine works at one of thees elite private schools at teaches science, and I’m under the imrpession she get paid around 90K, which I think is around 40K more than a public school teacher would. This suggests to me incentive schemes which are going to average, say, 5K are basically not even going to scratch the surface. You could make 5K more in Victoria, for example, just by changing state if you really wanted it.

  8. Patrick says:

    I think lots of people are willing to pay for education (40% of people in fact, looking at the latest private school figures), but then, lots of people arn’t also. As long as enough people are in this second group, you are going to have lots of problems.

    My last point was that I think that this is wrong.

    are you really saying that vouchers are going to pump heaps of new money into the system

    No – I said that they didn’t have to. Incidentally I expect they would, for the same reason I think your first point is wrong.

    Also, this argument about house prices and public schools is incorrect.

    This time you may be right – that argument, and Andrew’s snazzy card, are from the UK. Mine is aboutprivate schools. But I wouldn’t bet on your being right anyway.

    As for your last point, see my previous points, especially the first one in my last comment.

  9. conrad says:

    Ok — I think I’ll leave it as empirical as to whether more people would be willing to pay or not given your suggestion.

    Incidentally — I just brought it up as an argument as it seems to be the group most people talk and care about, but I actually think this whole idea about paying high-school teachers in maths, science etc. a whole lot more is quite misguided, at least if you have limited money. As far as I’m concerned (and its not just an ill founded opinion, say, like my opinion on vouchers) the biggest bang for your buck would probably come from getting better primary school teachers. Oddly enough, more parents are willing to pay for high school than primary school education, and no one seems to care that exceptionally stupid people can become primary school teachers. Its no real surprise to me that kids with learning problems and the like never get found before its too late.

  10. Patrick says:

    I agree. Mainly because most parents are awol.

    I believe that my solution would apply equally well :)

  11. Kevin Cox says:

    Increasing teacher pay improves the quality of teachers. Keeping the same amount of taxes and increasing some teachers pay through merit means relatively decreasing the pay of others and that means that the kids who get the bad teachers suffer more. No if we want to increase the quality of teachers then we need to increase the pay of ALL teachers – but we do not want to increase taxes.

    There is a solution and it applies to all sectors but mainly to Universities, then to Tafes, then to Secondary Colleges, then to Secondary Schools, Primary Schools, and finally to pre-schools.

    What we do is to reduce the non teaching costs and give the extra money to teachers.

    The Universities spend less than 40% of their money on teaching staff. That is, they spend 60%+ on things other than salaries for teachers. Look to improve the efficiency of administration and there is plenty of money to increase teachers salaries.

  12. Tanya says:

    “The Universities spend less than 40% of their money on teaching staff. That is, they spend 60%+ on things other than salaries for teachers. Look to improve the efficiency of administration and there is plenty of money to increase teachers salaries.”

    Kevin, do you know how universities work these days? What you seem to be implying is that the 60% is hideous administrative bloat. Sorry mate, but the reality is that a lot of that administrative work is actually a combination of something that “teachers” were doing years ago as well as an increasing amount of catering to demands for proving performance (i.e. government reporting and marketing to “the real world”). Lecturers want less administrative burden not more. The solutions are elsewhere … including improved pay for lecturers.

  13. Patrick says:

    aah, administrative efficiencies. That’s how every new government promises to lower the deficit/pay for its spending…we’ll lower administrative inefficiencies!

    And frankly the extrapolation from Universities (not presently pertinent, I don’t believe) to high schools and primary schools strikes me as simply absurd. So they both engage in, amongst other things, teaching – so what?

    Colour me even more skeptical than Tanya.

  14. Andrew Leigh says:

    Andrew Norton had some good things to say on university admin costs recently.

  15. Kevin Cox says:

    Andrew I have been complaining about University allocation of resources for many years. It is not a new phenomena and the fact that Andrew Norton says it is no worse than it has ever been is not the issue. The point I am trying to make is that if we agree that teachers interacting with students is the second most important part of the education experience (the most important part is the interaction of students amongst themselves) then we should look to see how much of the University Budget is allocated to that interaction in order for us to get an idea on the quality of the education received by students.

    If more than half the resources are not spent on student to teacher interaction (or student to student interaction) then there is a good case for saying there is something wrong with the system. The proportion of funds spent on things not involving human interaction in the learning experience just does not seem right. It seems that there is a fundamental problem with the way we have organised our Universities and to a lesser extent our other learning bodies

    Given this is the case we should examine the systems and the way we organise and in particular the funding. It will come as no surprise to you that I think the best way of reforming Universities (and schools), of getting good salaries for teachers, of reducing the administrative overkill is to change the power relationships between students and the University. This is done by giving all University money to students to spend at the University (or school) of their choice.

    If this were done then students could have a genuine choice and Universities would have to compete to get students and students would go to the ones that gave them the best return for their money. Universities would quickly evolve so that the places that gave the best value for money would survive and prosper. If as I believe teacher/student interaction is important then that will increase. (Of course there is more to it than just giving students the money but that is the starting point).

    However, back to the original point I think it wrong to take money from one group of teachers and give to another group for merit performance. This is unfair on those students who get the lower paid staff. Merit pay can be introduced but only in the context of a general increase in all pay. The problem that I see in these top down policy initiatives is that given a fixed budget the mechanism for rewarding those who are “best” is to take the money from those who are not so good to the detriment of some students through no fault of the students.

    That is, do not try to micro manage institutions and set policies like merit pays but set the low level interactions (students to school) in the appropriate way and the school or University will evolve to meet the needs.

  16. conrad says:


    first of all I agree with Patrick and everyone else that thinks that universities and high schools are not compareable. However, what percentage of costs do you think most normal (i.e., excluding elite) high schools spend on teaching staff? Once you have that number, it should give you an idea of how much is spent on other staff and how much you could possibly get back from it (and just remember, everyone needs clearners, IT support etc.). My bet is that many schools (like every university I’ve worked) don’t have enough administration staff already, and that this lack of staff impacts negatively on the productivity of the teachers, because they can’t get IT support, everything they need is always broken etc. It seems to me that the everyone always suggests improving efficiency by getting rid of admin staff, and all it every does is trade off with the productivity of people that are paid more. I think often its a negative sum game.

  17. Kevin Cox says:


    I am not talking about tweaking the existing administrative system. That only makes matters worse. I am talking about reorganising the administrative system from a “command and control” to a restricted market system.

    High schools and primary schools administrative costs are of course lower than Universities. I am not talking about individual schools or even Universities. I am talking about total system costs and the proportion spent on teachers interacting with children.

    The way the education system is organised there is a very large bureaucracy at both state and federal level servicing the distribution and accounting for funds. All teachers know how much time they spend handling administrative chores such as getting signatures from parents for an excursion through to applying for grants. If we look at the total administrative load then most is done by teachers, students and parents. Why is all this administrative work necessary?

    A major administrative load comes from the way we distribute funds and the resulting control that this requires. Imagine if we supplied the population with food the same way we supply education. Rather than supply education I am suggesting that we supply every child with the money to purchase education from the same institutions.

    Rather than supply curriculum I suggest we supply schools with money to purchase curriculum.

    Rather than supply schools with teachers I suggest we supply schools with money to purchase staff.

    Rather than the Federal Government supplying schools with a computer for every student in years 9 to 12 I suggest the government supplies the schools with the money to purchase a way for the students to connect to the internet.

    Five years ago all this would have been impractical. Today this approach is practical because our technologies and understanding of how systems work is much greater. We can now design and construct efficient systems that will achieve multiple objectives where most of the “administration” is built into the system.

  18. conrad says:


    1) you’re basically suggessting we use a voucher scheme, except not allow schools to set their own pay rates. That might make things marginally better (as Patrick would argue), but I’m more cynical (I don’t think it would make much difference, especially if its a zero-sum game, which Patrick thinks it wouldn’t be). There’s not much evidence that it is does anything thrilling to educational standards.

    2) schools are _already_ allowed to to choose their own curriculum, incidentally. The IB is popular amongst elite schools, for example. The reason its not done more is that it costs heaps to retrain the teachers, you need to find teachers who are smart enough to teach it (not possible for some subjects), and other organizations like universities (who are the consumers in your new system) are not going to care about other systems — they already have to deal with enough. Being someone on the selection panel occasionally, I can tell you that the way selection is done is not exactly a scientific process. If you give me some weird certificate, don’t expect me to care or waste my time looking up the details. We also get stereotypes of weird certificates (people with certificate X, are usually hopeless), which are probably not reliable since they come from small N populations.

    3) The reason teachers get signatures for anything and everything is legal, so unless you change the law you won’t get anywhere with that one. Rumour has it that can and do get sued for everything these days, and a lot of the administrivia is to get around that problem.

    4) Private schools can choose their own teachers, but it doesn’t save on administrative costs (its very expensive to find staff) — it probably increases it. It just means you might get better teachers (not a bad trade-off).

    5) If you make getting a teaching job especially competitive, you are essentially taking a condition away from teachers. Since teachers are already in shortage in many areas, you probably need to compensate for this loss of condition otherwise even less people than now will want to become teachers.

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