Lessons from the Past: Increasing Education Really "Lifts all Boats"

Monday, May 4, 2015

Many priorities compete for congressional attention and increasingly scarce public appropriations. Prominent on the political and budget landscapes are proposalstouted by President Obama and, in some cases, gaining traction in national debates— that would raise overall levels of schooling, including extended compulsory education (to age 18) and free community college. Especially given the heated rhetoric questioning the ‘value’ of a college education today, critics may wonder whether increasing access to education is worth the additional funding required. 

Politicians often suggest expanding education spurs the economy and innovation, promotes job creation, and helps create skilled and higher paying jobs that demand more educated workers.  Some economic analysis supports these contentions (e.g., Anselin et al. 1997; Varga 1998).  Counter arguments suggest education could enable mechanization of skilled labor and reduce skilled jobs in certain contexts (Goldin and Katz 2008; Acemoglu 1998) – or simply increase competition for the skilled jobs that exist (Collins 1979).

One of my recent publications investigates this question by studying the effects of an early policy change to increase access to education – compulsory schooling.  Using careful statistical analyses of turn-of-the-century census data, this study investigates the effects of compulsory schooling on the job distribution.

Despite its focus on historical policy and data, findings from this study have implications for these contemporary debates.  First, the policy change not only increased rates of attendance overall but also increased equality of school attendance by class and race.  Specifically, my analysis finds that compulsory laws increased attendance by between 3% and 7% among children whose father is employed in a low-status job.  This increase in attendance for low-status children is greater than the increase for high-status children (between 1% and 4%), suggesting that these children’s educational access, residing at the margin, may have been particularly amenable to policy influence.  This reassures us that policies do have the potential to increase equality of access to education, even given the other factors (family status, individual abilities, personal preferences) that may also influence educational paths.

Second, and perhaps more importantly, compulsory schooling shifted occupational distributions toward skilled and non-manual occupation categories.  Regression analyses show that compulsory laws significantly reduced the proportion of men in agriculture by 3% and increased the proportion of men in lower non-manual, skilled manual, and non-skilled manual occupations by 1% each.  Among women, compulsory laws significantly increased the proportion in skilled manual occupations by 2%.  This pattern is illustrated in the figure below: in states with a compulsory schooling law, higher proportions of residents are employed in non-manual and skilled jobs than those in states without a compulsory law.  In other words, boosting access to education helped create skilled jobs, just as some proponents argue today.  The additional appropriation required to raise the education level and increase equality of access to school had benefits for all on the job market, transforming employment patterns and advancing aggregate economic activity. 

State Occupational Distribution by Gender and Compulsory Law Presence

Source: Rauscher 2015

Reflecting on our shared history brings into focus public education’s progressive features. Education funding applies taxes from wealthier residents to educate all children.  Federally-supported education policies, such as expansion of need-based financial aid or incentivized College Savings Accounts, would be even more progressive by reducing geographic variability and investing in those students whose educations—like their forebears’—rest at the margins.

The evidence I uncovered shows that the transfer of funds to educate all youth benefits society as a whole by promoting the growth of skilled jobs.  As we decide together how to select policies with the greatest potential future payoff, perhaps we should look to lessons from the past.

References

Acemoglu, Daron. 1998. “Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality.” The Quarterly Journal of Economics 113(4): 1055-1089.

Anselin, Luc, Attila Varga, and Zoltan Acs. 1997. “Local Geographic Spillovers between University Research and High Technology Innovations.” Journal of Urban Economics 42(3): 422-448.

Collins, Randall. 1979. The Credential Society: A Historical Sociology of Education and Stratification. New York: Academic Press.

Goldin, Claudia and Lawrence F. Katz. 2008. The Race between Education and Technology. Cambridge: Harvard University Press.

Rauscher, Emily. 2015. “Educational Expansion and Occupational Change: US Compulsory Schooling Laws and the Occupational Structure.” Social Forces. doi:10.1093/sf/sou127. http://sf.oxfordjournals.org/content/early/2015/01/21/sf.sou127.abstract

Varga, Attila. 1998. University Research and Regional Innovation. Boston: Kluwer Academic Publishers.

 
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