Existing Economic Research on Benefits and Opportunities of Public Education - Term Paper Example

? Existing economic research on benefits and opportunities of public education Education is the most valuable resource in any economy, which generates high human capital that boosts up the achievement of the economy to a great level. Education under the modern structure of the world is delivered through the public sector as well as the private sector. Maintenance of the efficiency among these institutions is a challenge in itself as it incorporates within it the complexities of economics and contemporary social considerations. In countries all over the world, especially in United States (US) of America, the performance of the public sector educational institutions is lagging behind the private sector educational institutions. The paper focuses on the benefits and opportunities of public education with optimal policy suggestions for improvement. Summaries The article, Identity and Schooling: Some Lessons of the Economics of Education written by Akerlof and Kranton describes the identity generation of the students in several educational institutions. The pupils attending the privately managed schools generally tend to emerge from more socio-economically advanced backgrounds and the pupils from weak financial background opt for a public school education. In other words there lies a socio-economic stratification of the students attending publicly and privately managed schools. Identity generation is the prime motive in both types of educational institutions. For the development of identity, the economists often focus on the social interactions of the pupils in schools. The quality of the school is an important parameter in establishing the way in which the students fit themselves in a school’s social setting. Again, the academic achievement is also a prime variable for the development of the identity of a student. Economists have given emphasis to the socio economic variables rather than the existing resources present in the schools for achieving optimal educational outcomes. The economists have put forward the ideal type, identity and social category as the basics of supply and demand. The utility derivation of a person depends on their actions and also those of the others for the enhancement of his or her self image. The pupils embrace themselves to some social categories or groups with varied racial and ethnic designations which are found in the instances of the words used such as jock and nerds. Remaining within a social group, stereotypical physical attributes are developed within the individuals and the utility loss and gain are simultaneously related with low or high status respectively1. Educational achievement of the students also depends on the internalization of the school values among the students. Comer has demonstrated the disciplinary process with the case of an angry fifth grader attacking a small child with his belt. The teacher instead of punishing him helped the child to write a letter to his father who has been denied a pass from the jail for the Christmas. The teacher made the child understand that he could not take out his anger over other children in the school. The teacher taught him how to obey the rules. This internalization of moral values as entrusted upon the students by the school authorities should help the students in achieving success in their future life2. In the article, Competition between Private and Public Schools, Vouchers and Peer-Group Effects written by Epple and Romano, the competitive strategies adopted in the private schools and the public school are described. An overall preexisting notion is that the public schools are more or less tax free institutions. On the other hand the private schools are basically known to be institutions which are tax financed and the students studying in those schools have to pay tuition fees. Similarly there is also a pre-existing notion about the social positioning of the students studying in public school and the private schools. Various measures of reforms in the educational system have been encountered in the past decades. One of the current systems of educational reforms mainly practiced by the private schools with an underlying mechanism of profit maximization is the school voucher system. School vouchers (or scholarships), are certificates issued by the government with which parents can pay for the education. The students vary in their ability. Some are low ability students and some are with high skill. The private schools have made the scheme that the students belonging to high income families but with low ability will pay tuition premiums and those from low income background but with high ability will be provided tuition discounts. This system has been rampant in the United States in the recent years expanding the private sector schools to a great extent3. Voucher and tax credit mechanisms make it is easier for the parents to subtract educational expenses in the private school tuitions. The private school attracts the high ability low income students by allowing them free fellowships and tuition fees. The high income students cross-subsidize the low income students and there will be perfect competition with attainment of pareto efficient outcome and price discrimination policies are thus nullified. Price discrimination does not impose a hindrance in the internalization of the peer group externality. The high ability students get benefit of expenditure cut from the policy4. In the welfare angle, the advancement of the voucher system in the private schools has been able to increase the average welfare to a little extent. The sorting mechanism is popularized amongst the students and the high ability students get the benefit over the low ability students in the long run5. In a recent study it has been found that nearly half the adults in America are poor in reading and writing which hampers their professional life and many of them have been living in poverty. This depressing statistic has led to calls for change in the U.S. educational system6. In the article, Student Academic Achievement and the Degree of Market Concentration in Education written by Borland and Howsen, the academic achievements of the students with respect to various parameters have been mentioned with market concentration at its core. A student’s achievement varies with various parameters in the environment of their school. The parameters include family effects, peer effects and the school effects. It has been found that the family and the peer effects are directly related to the achievement of the students. In other words, good family and peer effects have positive effects on the academic achievement and negative effects of the family and peer effects generally adversely affect the educational achievement. In order to analyze the school effects on the student’s achievement, market concentration needs to be incorporated. Apart from market concentration, union effects also affect the achievement of the students. They are the market concentration in the sphere of education, the school administrators’ conjecture and the union effect. Stylized mathematical methods have been developed on the interaction of the students’ achievement and the market concentration states that the increased competition within a particular district increases the students’ achievement. As the environment becomes competitive, a positive attitude is injected within the pupils for performing at high level academically. As a consequence, the spillover effect enhances the achievement of the students further. The effects of the unions are uncertain. Achievement may increase or decrease with the union effects. Some researchers state that the unions increase the productivity with the reduction in the workers turnover, whereas some other researchers state that the public sector is more labor intensive and are not adjustable with the innovations in technology7. Synthesis and Suggestions to improve public education Need to focus on more competitive reforms The educational reform policies adapted by the educational institutions affect the academic achievement of the students both in the public schools as well as in the private schools. The private schools are profit maximizing institutions and are focused on the competitiveness of the students. The public schools focus less on the competitive angle of the students and can be considered to be more staggered in growth rate of the student’s achievement than the private sector schools. The voucher system in the private schools increases the participation rate of the students with higher ability and low income. The low ability students become worse off. It is a fact that in the public sector, the welfare loss is low but majority of the students with low skills lie in the public sector schools with a majority infiltrated into the public sector. As a result the welfare loss as a whole is greater leading to pareto suboptimal results. Competition-induced performance improvement programs should be introduced into the public sector education which will encourage more students to take part in the competitive education scenario and develop their skills accordingly. The voucher system should be promoted with the sustainability of the academic achievements of the students8. Offering more choices but with concrete development of self identity The contemporary situation of the public schools in United States is that they offer varieties of choices but fail to promote any particular social category. The principles of the school promote tolerance and the students are allowed wide choices in class. With more choice, the students in a diverse population find ways to identify with the schools but negligence of the concentration on any single ideal generates academic mediocrity and lack of skill generation among a wide group of students9. The educators opine that the innovations in legal dimensions and changes in the social attitudes within the time span of 1960s and 1970s became the prime hindrance for the public sector to promote efficient standards for the students. Thus for infusing optimal social standards among the students of the public school focus on the allocation of resources to demarcate students’ behavior along with the guarantee that the students could identify with the schools and its ideals should be well addressed. In recent times, some successful applications are found in case of the American public schools like Central Park East Elementary and Secondary Schools in Harlem and the Comer Schools in New Haven. The student’s relationship within these schools is strengthened by diminishing social differences among the students with the creation of a community with the idea of excellence in the academic platform10. Peer group effect and school funding for ethnic homogeneity Peer group effect is a significant parameter in strengthening the educational attainment of pareto efficient outcome of the students. The private schools through their effective competition policies develop high quality students and also enhance the learning of the other students. Thus greater intervention in the investment for the identity development of the students is necessary. Effective community formation is possible through the proper funding in the community development. Homogenous communities will boost up the unilateral harmony and positive effects among the students for achieving higher attendance rate in the school as well as higher academic excellence11. Conclusion The public sector, although it provides the facilities to students to execute their fundamental educational career with less expenditure than the private sector schools, yet lacks in some areas of development which need to be focused on and remedial policies should be implemented. The voucher system should be introduced with more competitive environment for the skill development of the students. For the peer group effectiveness, the school administration must be well organized in channeling the funds in the most optimal areas trying to develop a homogeneous community with the scope of full identity development. The public schools should also entail emphasis on a particular social development within them rather than infringing on diverse options. References Akerlof, George A and Rachel E. Kranton, “Identity and Schooling: Some Lessons for the Economics of Education”, Journal of Economic Literature 40.4 (2002): 1167-1201 Borland, Melvin V, Howsen, Roy M, “Student Academic Achievement and the Degree of Market Concentration in Education”, Economics of Education Review 11.1 (1992): 31-39 Epple, Dennis and Romano Richard E., “Competition between Private and Public Schools, Vouchers and Peer-Group Effects”, The American Economic Review 88.1 (1998): 33-62 Read More