A Progressive Case for School Reform

I’ve recently written a piece entitled "The Progressive Case for Reforming Australia’s Schools", for a volume called Progressive Essays, which Craig Emerson, Bob McMullan and Lindsay Tanner* are putting together. When I presented a version at a teachers’ conference in Melbourne last month, it evoked a rather vigorous response, so I’d be grateful for any thoughts people had on it. Full text (sans footnotes) over the fold.

* AKA the Latham Three.

The Progressive Case for Reforming Australia’s Schools
Andrew Leigh

In the field of primary and secondary education, progressives in Australia have generally adopted a conservative approach to reform. This would be entirely justifiable if our schools were performing well. But troubling new evidence suggests that literacy and numeracy scores have stagnated or fallen since the 1970s – despite a doubling of resources. While it is difficult to be sure of the reasons for this decline, one possibility is a fall in teacher quality. In this environment, Australian Labor should be more open to new reforms being favoured by social democrats in Britain and the US: publishing test score results, promoting healthy competition between schools, and finding new ways to attract and keep the best teachers.

The Crisis in Australian Education

How have Australian schools performed over recent decades? Perhaps the most straightforward way of answering this question is to see how the literacy and numeracy standards of Australian students have fared over the past quarter of a century. For comparable data on literacy and numeracy, we can use tests conducted since 1975 by the Australian Council for Educational Research (ACER), as part of its Longitudinal Surveys of Australian Youth. Students are tested in year 9 (at about age 14), and are then followed until they are well into their 20s.

How well students perform in these year 9 literacy and numeracy tests turns out to be a good predictor of a number of life outcomes. When ACER contacted test-takers a decade later (when they were in their mid or late-20s), they found that those who performed well in the tests were more likely to have completed school, more likely to be employed, and tended to have higher hourly wages.  These literacy and numeracy scores clearly do not measure everything that is important about education, but neither can they be dismissed as meaningless.

Most importantly for present purposes, these literacy and numeracy scores were designed to be comparable over time, with common items in successive tests making it possible to scale the test. In this sense, they are quite unlike most Australian tests – such as statewide tests in grade 3, 5, 7, 10 and 12 – which are not generally designed to be comparable across years.

This allows us to compare the scores of 14 year olds in 1975 with 14 year olds in 1998 (the most recent test). For literacy, the scores are essentially the same in both years – showing no improvement over the last quarter-century. For numeracy, the 1998 cohort scored about 1½ points lower than the 1975 cohort.

One potential explanation for this finding is that there has been a change in students’ characteristics. For example, students who come from a non-English speaking background tend to score lower on these tests, and more students in 1998 came from a non-English speaking background than in 1975. On the other hand, parental education is positively correlated with student performance, and students in 1998 tended to have better-educated parents than in 1975. So it is difficult to predict how demographics would affect the trend.

What would the change have been if there had been no shift in students’ demographic characteristics? Using data from the 1975 and 1998 tests, my Australian National University colleague Dr Chris Ryan and myself tested this hypothesis. We found that taking account of demographic changes did not make the drop go away. On the contrary, it accentuated it. If you take into account the demographic shifts between 1975 and 1998, the drop in both literacy and numeracy scores was around 2½ points.

One should remember that literacy and numeracy scores have fallen at a time when spending on education has risen. In today’s dollars, government schools spent $3,141 per pupil in 1975. By 1998, real spending per pupil had more than doubled, to $6,770. Much of this change came through lower student:teacher ratios. Over this period, the number of students per teacher fell from 25 to 17 in primary schools, and from 16 to 13 in secondary schools. 

These numbers on spending are important because they show that this is not a case of declining outputs and declining inputs. Instead, it is a case of declining outputs despite rising inputs. In economic jargon, the productivity of our schools is falling. If we measure outputs in terms of literacy and numeracy scores of year 9 students, Australia is getting less for our educational dollar now than we did in the 1970s. 

As I argued earlier, we know that literacy and numeracy scores matter; that they are an important predictor of children’s life outcomes. But they are only one measure of educational performance. Schools also teach students a wide variety of other skills – from science to socialising – that are not measured by literacy and numeracy tests. And we cannot know from the results that I have shown whether schools are doing better or worse on these other metrics. What we do know is that on the criteria we can measure, schools today are not doing as well as they did in the 1970s.

What Might Explain the Decline?

Perhaps not surprisingly, it is easier to chart the decline in educational performance of Australian schools than to explain it. Rather than attempting an exhaustive discussion here, I merely focus on one possibility: that there has been a decline in teacher quality.

In the United States, a number of recent studies have shown that the number of high-ability people – especially high-ability women – entering the teaching profession declined sharply during the 1970s. Measuring ability either by standardised tests, or by the selectivity of the university that the teacher attended, there appears to have been a sharp drop-off in the number of highly talented women entering teaching in this decade. 

In research I have conducted with Harvard Professor Caroline Hoxby, we assessed two possible explanations for the decline.  The first possible explanation is that teacher quality fell as a result of diminishing gender pay gaps in the professions. In the 1960s, gender pay discrimination in the professions was rife (the same was true in Australia, at least until the 1969 and 1972 equal pay decisions). Significant gender pay gaps deterred many talented women from professions such as law, medicine or business: and many instead chose to enter the teaching profession (where the gender pay gaps were smaller). A smart young female university graduate in the 1990s had many more labour market opportunities than she might have had in the 1960s. No-one would propose reinstating gender pay discrimination today, but it is important to recognise the role that sex discrimination once played in pushing talented women into teaching.

Hoxby and I also explored another possible explanation for declining teacher quality: pay compression. At a time when pay gaps between high-performing and low-performing workers in other professions were growing, the pay gaps between teachers were shrinking. We found that a teacher who had attended a top-tier university earned a 60 percent pay premium in the 1960s, but no pay premium in the 1990s. Overall, we concluded that both factors – falling gender pay discrimination in the professions, and pay compression within teaching – helped explain the decline in US teacher quality. In current research, I am exploring whether there has been a decline in teacher quality in Australia, and if so, what factors might account for it.

New Solutions

Over the last quarter of the twentieth century, the resources devoted to educating each student in Australian schools doubled. Yet literacy and numeracy standards stagnated or fell. Together, these findings suggest that Australia needs to think harder about ways of improving the productivity of our schools.

First, we should consider fostering healthy competition between schools, by providing parents with more information about how schools are performing. In most Australian states, school-level test score information is very limited. This stands in sharp contrast to Britain and the United States, where these data are regarded as public information, and detailed school-level results are reported annually.

An oft-heard argument against the publication of school test score results is that these reflect both school performance and student backgrounds. Parents, the argument goes, may erroneously judge a good school to be underperforming if it has a high fraction of students from a disadvantaged background. This is an important argument, but one that is easily addressed. One solution is for schools to also report test score information that is adjusted to take into account the socio-economic composition of the student body (as was done in Victoria during the 1990s). Another alternative is to report to parents the test score gain from one test to the next, since this is effectively a measure of the value-added by a school.

Those who oppose the publication of test scores should remember who suffers most from an environment in which limited information is available about school performance. Affluent parents tend to have superior ways of finding out about school performance: they can afford to buy books that compare schools, they often have more extensive social networks, and they are generally more comfortable calling the school and arranging to speak with the principal. Keeping test scores secret punishes low-income parents most, since they have fewest alternative sources of information about schools in their area.

Second, progressive educational reformers should also be open to the notion of encouraging competition between local schools, by creating opportunities for parents to move their children into better-performing schools. As the competition reformers of the early-1990s recognised, consumers are rarely well-served by monopolies. This simple insight, which underpinned reforms to foster competition in the telecommunications, electricity and dairy sectors, suggests that suppliers will “lift their game” if they know that consumers have another option. For working families who are struggling to make ends meet, competition in these sectors has meant lower prices and improved quality.

Competition is not only about ensuring that students can move from low-performing to high-performing schools; it is about creating a set of incentives for all schools to perform at their best. There is no contradiction between competition between service providers and a vibrant exchange of ideas between those providers. Indeed, this combination neatly characterises one of the world’s intellectual hubs: Silicon Valley. In Australian education, innovation and competition can also go side-by-side.

Third, if it is the case that teacher quality has declined in Australia, then we should be open to unconventional solutions to attract and retain the best teachers. This may require a little ingenuity: faced with a similar crisis, New York City recently embarked on a campaign to encourage professionals in other occupations to retrain as teachers, using slogans such as “Tired of diminishing returns? Invest in NYC kids”, and “You remember your first grade teacher’s name. Who will remember yours?”. They received so many applications that they were able to choose just the top 10 percent to become teachers.

We should also consider is whether the structure of teacher pay could be improved. Average salaries for Australian teachers are generally above the OECD country mean. But with public school teachers generally reaching the maximum salary level after just ten years of service, teacher salaries flatten out much more quickly than their OECD counterparts.  In most states and territories, a starting teacher receives around $40,000, while the best and most experienced teachers receive around $60,000. It is difficult to think of another profession where the rewards to performance and experience are so low. This helps explain why the net migration inflow (immigrants minus emigrants) over recent years has been smaller for teachers than for any other professional occupation. 

Failing to reward performance affects not only the total pool of teachers, but also has a disproportionate impact on disadvantaged students. Those who suffer most are not children in rich neighbourhoods, whose schools will rarely have difficulty attracting good teachers – but those in struggling suburbs. Without incentives for the best teachers to work in the most needy schools, these areas will continue to attract teachers that are younger and less experienced.

The Way Forward

For much of the twentieth century, the left in Australia favoured high trade barriers. Protectionism, it was thought, was the best way to protect jobs. Yet tariffs are a regressive tax, and sheltering monopolies behind tariff walls actually did more harm than good to low-income earners.  Under the government of Gough Whitlam in 1973, and under Bob Hawke in 1988 and 1991, it was Labor governments who finally consigned high tariff rates to the dustbin of history – in the process putting an extra $1000 into the pockets of an average Australian family.

Social democrats in Australia today face a similar rethink when it comes to education. The old producer-driven solutions have not worked. Our central focus now must be on better serving the consumers of education: young Australians. Getting the best out of our schools is the most promising way we know of to address our greatest social challenges: unemployment, poverty, inequality, and Indigenous disadvantage. If we block innovation in Australian education, those who suffer will be children in the most disadvantaged schools. By finding better ways to teach literacy, numeracy and engender a love of learning, we can open doors to children for the rest of their lives.

Dr Andrew Leigh is an economist at the Australian National University. He served as an adviser to the federal ALP from 1998-2000. His research is available at www.andrewleigh.com.

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3 Responses to A Progressive Case for School Reform

  1. Steve Edney says:

    Andrew, Generally I agree with the sentiments and find it an interesting analysis.

    Now to throw out an alternate idea. You make the point that you don’t know whether the teaching has improved or decreased in science, etc as you are just testing numeracy. There is another point here you have not mentioned.

    Is there as much investment in time in teaching numeracy and literacy between the two cohorts. Do we now invest a smaller portion of the year teaching these fundamentals compared with teaching computer skills, science, geography, socialing or whatever? Its possible that this can be eliminated as a factor, but if you find that there is infact more in the curricula of other subject matter now than then, surely then the hours spent teaching these core subjects are decreasing and this is an alternate explanation, and if so should we be putting more focus on the core subjects versus the rest.

  2. Andrew, I’m interested in the reception you got. Can you tell us about it please. (Just to inject some small empirical content into my own presumptions about how your findings would have gone down with teachers.)

  3. Andrew Leigh says:

    Nicholas, I’m used to being at conferences where people ask hostile questions (as you know, most economics seminars are like this), but this was my first experience of the hostile questioners being loudly applauded by large sections of the audience.

    That said, the questions were pretty reasonable – teachers are concerned that literacy and numeracy scores are only a part of what we’re trying to teach, and they’re pretty convinced that on benchmarks other than literacy/numeracy (eg. learning to think) kids are better than they were. My paper tries to address both these criticisms.

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