Why do We Need Productivity Gains in the Education Sector?

1. Antiquated Lectures: the college lecture format is antiquated. In my first year of graduate school, Brad Delong mentioned that the lecture format originally stemmed from a scarcity of books. Since only a few books were available, lecturers had to gather people in rooms to read them aloud. It’s very unlikely this method of instruction is still optimal.

2. Baumol’s Cost Disease: Roughly speaking, in 1960, one teacher could teach 20 students per day. In 2012, one teacher can still teach 20 students per day. Compared to other goods, such as a cars, TVs and computers, productivity in education has increased much less rapidly, resulting in profound economic consequences. In particular, Baumol’s cost disease, which is driven by these sectoral productivity differences, can lead to huge cost increases for relatively unproductive sectors. These underlying economic forces and cost increases amplify the need for productivity gains in the education sector. With lower costs of education, more people can obtain more education, which will likely lead to more human capital investment and economic growth.

3. Lack of specialization: does it really make sense to have hundreds of thousands of teachers around the country simultaneously devise hundreds of thousands of their own lectures and homework on the same material? It seems like a lot of wasted effort. In addition, many teachers outside of Lake Wobegon will be below average. It’s highly likely that these resources can be allocated more efficiently (perhaps in the form of personalized tutoring and tailored academic assistance). Almost every other industry specializes in one way or another so that the best producers produce a substantial share of output. Why not in teaching? A world in which more students are learning physics from the best physics teacher at MIT strikes me as positive move in this direction.

For these three reasons, I found Alex Tabarrok’s essay on on-line education quite interesting:

Productivity in education has lagged productivity in other sectors of the economy because teaching is so labor intensive. Where exactly in the typical classroom is there room for investment, let alone productivity improvement? More chalk? Prior to online education, the bottleneck though which productivity improvements had to pass was the teacher, and we know that improving teacher productivity is very difficult, which is why teaching methods haven’t changed in millennia. Online education vastly increases the potential for productivity increases because it greatly increases the size of the potential market. Bigger markets increase the incentive to research and develop new products (coincidentally the very topic of my TED talk.) A tool used to improve online education–an interface, an algorithm, a new teaching method–can be applied very widely, potentially world-wide, thus greatly increasing the incentive to invest in the education sector, perhaps the most important sector of the 21st century economy.

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
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9 Responses to Why do We Need Productivity Gains in the Education Sector?

  1. Pingback: Economist's View: Links for 11-18-2012

  2. J. St. says:

    There may be places where productivity gains aren’t a positive benefit for the consumer. How does on line education differ from giving a student a book and telling him/her, “Have at it. Learn it yourself.”

  3. MOOC says:

    I think we need an increase in productivity for massages. Imagine, no progress for thousands of years — still one masseuse per massagee! We may just have to accept low productivity in many aspects of education. Though perhaps you’d like to just throw pre-schoolers and kindergartners in front of a screeen and teach them with a massive online open course.

  4. Reblogged this on Brucetheeconomist's Blog and commented:
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  5. econ says:

    My experience for quality teaching was less formal lecture and more discussion in smaller groups to address issues and solutions. On-line is NOT conducive to better learning in all disciplines. What disciplines are benefited remains open.

  6. alex says:

    Funny how someone on the receiving end of some of the most investment in their education that any individual in the history of the world has received (a phd candidate at uc-berkeley) would advocate giving people books, an internet connection, and blame for when they fail. I must say I’m convinced but not for the intended reasons: spending more money on education doesn’t necessarily lead to better outcomes!

    I’ve done the traditional education thing and the online education thing. There is a place for online education, but not in the granting of full degrees. There is more to an education than memorizing information and then taking a test. There’s a lot the online world can’t replicate. Having a great lecture on physics from MIT doesn’t replace doing the problem sets, which requires knowing they’ll be graded, working with others, and having help available when needed.

    Moreover, what’s with this fatalism that costs are just going up for no reason? The OECD average for post-secondary education is 1.5% of gdp while the US is spending over 3% of GDP. Yes, America’s college and university system is better than in other countries, but it’s not over twice as good. Why not look at that for a reason #4? It’s like the idiotic health care “debate” we had a few years ago: health care is expensive! it has nothing to do with policy! please don’t ever look at what other countries are doing!

    Last, I’d watch how I was measuring productivity of teachers if I were you. It’s not just number of a teacher can get to sit through their class for a whole year. Test scores (in the US) have been going up and the drop out rate has been declining for the last half century. Kids are learning more and learning it better, plus the specific skills they’re learning are more adapted to the 21st century than before (cursive being replaced by typing, etc). Special education has also improved, giving kids who before would have been institutionalized a chance to live fulfilling lives today. Education output might not be increasing fast enough for your tastes, but that’s no reason to imply that it hasn’t been increasing at all.

  7. Here are some things I really like about lectures:

    1) A huge thing that hurts learning and creates misunderstanding and poor understanding is the enormous pressure to write with “good style” – Don’t let it be clunky, make it sleek and simple (even if the actual important truth is clunky, not simple, has lots of buts and exceptions and caveats), keep it from being too informal, keep it very compartmentalized so you don’t teach important interrelations and maintain a good chain of thought and cause and effect,… So often writers will say things that are simple and clear and sleek and compartmentalized and artificially well organized,.. but untrue in important ways. With a lecture, where a teacher can speak informally, he can often be much more accurate, as well as clear, and much less misleading.
    2) You can use your hands and point and draw arrows, little picture, etc. informally, as well as voice intonation.
    3) Students can ask questions immediately before they lose the chain of thought.
    What’s faster, reading a manuel, or having someone show you how to use it, i.e. give a lecture.

  8. A big problem with traditional education is that many very important areas like math, science, and economics, are extremely sequential. If you don’t understand the old stuff, it’s harder, or vastly harder, to understand the new stuff. The efficient thing is to not move on to the new material until you understand well the current material. But with the traditional system the teacher just moves on in his big lecture and tests at his predetermined fixed pace for the whole class.

    People are starting to recognize this enormous inefficiency, and are having students move at their own pace, not going on to the next thing until they’ve learned well the current thing. In Tucson, I’m considering an advanced charter school for my daughter in the future, ALL (Advanced Learning Laboratory). They’ve achieved amazing results having the children all go at their own pace, with the teacher helping them individually and in small sub-groups.

  9. Pingback: The Many Reasons To Obtain An Online Education «

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