Does Education Matter?: Myths About Education and Economic Growth (Penguin Business) [Mass Market Paperback]

In spite of the provocative title of the book, Does Education Matter?, Alison Wolf is no fool. She admits that (1) yes, knowledge, and thus education, is important in itself. She admits that (2) yes, education has an effect on the salary an individual can gain. As a "positional good" it affects how the wealth in society is distributed. This is because employers use higher education also as a proxy of different abilities like intelligence or motivation, and only partly as an indicator of concrete skills. Furthermore, Wolf admits that (3) yes, education at the primary and secondary level has an important effect also on how wealthy, in absolute terms, a given society can be. The important concrete skills employers are looking for are, quite simply (but not at too trivial level), reading, writing and mathematics. She even admits that (4) yes, education at the tertiary level can create wealth, provided it creates high quality research and professionals. But here we are already close to a "no" answer (which you all knew was coming).

In Western Europe, about one third of a cohort get a university degree, and we are on our way to the level of two thirds already reached in the USA. There is preciously little evidence that this expansion creates economic growth; if anything, it is a result of such growth. Symptomatically we have not seen similar expansion in the resources provided for the universities. With funding per student, also the teacher/student ratio has decreased dramatically, implying decreasing quality of the education ("efficiency gains" in education are problematic). Moreover, the overemphasis on tertiary education has made it more difficult to provide high quality primary and secondary education. As Wolf points out, the chosen policy most likely hurts the economy!

According to Wolf, however, there is little one can do to decrease the popularity of the tertiary level education. Young people are optimistic about their abilities and they - and their parents - want to keep the option of high future salaries open as long as possible. (This is why it has been so difficult to upkeep and create more vocationally oriented options for secondary or tertiary education, even if it might be more efficient.) At the same time, the politicians are not going to restrict university attendance by increased fees or by demanding higher academic results from the enrolled students; such options would simply be too unpopular among the voters. What is good for individual may be bad for the society.

In the USA the problem has been solved by letting the universities to compete, and thus creating stratification in the sector. In the more or less nationalized European education this is problematic, but perhaps less so than the options mentioned earlier. Best universities could this way get funding that is necessary to provide the highest research needed both economically and culturally (just take a look at the US Nobel Prize winners).

So, referring to "education, education, education" as a sure way to national riches is erroneous, not because education is unimportant, but because of diminishing returns: it is possible to have too much of a good thing, when it comes with costs. In similar vein Wolf explains - with excruciating UK specific details - the waste of resources when politicians and even business organizations have tried to "improve" the post-compulsory, i.e., vocational, further and university education.

In addition, expansion of tertiary education is not very effective way to help the poorest people of the society. In fact, the opposite is true, as it is the middle class that swamps the universities, widening the economic gap. A much more effective tool seems to be wage subsidies promoted by, for example, economist Edmund Phelps. Unfortunately, middle class voters (and thus also politicians) prefer investments in education, since they can profit from it. And as far as the education is concerned, socially conscientious people should pay more attention to the primary level, where the long term future of kids can be affected more.

Finally, concentrating solely on the relationship between education and economic growth impoverishes our world view and culture. Education is important in itself, and economy is important even when it is helped by the growing service sector.

A question that is always likely to generate debate, the purpose of education is at the centre of this book: the best investment for modern societies' economies is generally regarded to be education. This book explores the true relation between education and an effective economy, including plently of figures and well reasoned arguments. Issues of particular interest are the public perceptions of vocational education, and the stigma often attached to this, and the influence of business and industry upon what our children are tuaght. Not too dificult to read, and extremely useful fo anyone studying economics, education, or politics.

Most educated people assume that a degree is a passport to a well-paid career. Nearly all politicians believe that education is the key to a nation's economic virility. One would assume that Alison Wolf, who is a professor at London's prestigious Institute of Education, would support these ideas: after all, they underpin the rapid growth of the education industry in Britain and elsewhere. However, the facts are not so simple.

Although it is true that basic literacy and numeracy skills correlate highly with stable, well-paid employment (even after controlling for levels of formal educational awards), our universities are turning out far more graudates than the job market can absorb. After two years, one third of all grads in Britain are either unemployed, or doing a job that doesn't require a degree--a fine reward for taking on a huge burden of debt. 'Mickey mouse' degrees from Britain's newer universities are all but useless in employer's eyes. After all, one of the main advantages a degree confers is the ability to network with the 'right' people, and you sure aren't going to meet these at Greenwich University.

Even good degrees in hard subjects are no guarantee of a job. The stats belie official propaganda: we have far more science and engineering grads than we need. The global economy has created a global market in these skills, and China and India have been turning out huge numbers of scientists and engineers for years. One stat that I turned up in the course of my own research is that only 7% of British students awarded a BSc in Physics in 2002 actually found a job in R&D. The only physics grad I know personally never got a job at all--after 3 years of working in call centres and busking, he finally trained as a teacher.

The next time a politician bleats on about how we need more education to prepare our kids to compete in the information age, bear in mind that only 25% of ICT grads find work in their field. That's from our official careers website. The only true measure of any nation's economic competitiveness is how easy it is to start a new business, and how low the taxes are. Raising taxes to pay for ever-more education is the worst way to go about it.

But perhaps the worst of it is that we have lost sight of the true purpose of education. The West created the most remarkable civilisation the world has ever seen--one which triumphed over all--one which flourished equally in the arts and sciences. It is said, with some truth, that in early colonial days, every settler's shack has a copy of Shakespeare. In both Britain and America, ordinary people were educated without the slightest interference from the state--whereas in Prussia and France, schools were a tightly-controlled government monopoly. Prof Wolf is a liberal, and many of her colleagues may regard her as a traitor for failing to support the great greedy tax-eating machine that employs her. But she is true to the real purpose of education. And, I should add, she writes extremely well--this is not a dry book for the specialist. Buy it.