Educational Observations From Economists

Investing in Education        Standardized Tests        
Academics Versus Educators
 Concepts Everyone Should Understand         Concepts the Majority Can Not Understand    Why College Tuition is Not Going Up Rapidly    
The Path Not Taken  
Thoughts On President Obama's Educational Reform

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Economics of Education        
Education Reform
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Investing in Education 

Real Education: Four Simple Truths for Bringing America's Schools Back to Reality by Charles Murray, 2008
W. H. Brady Scholar at the American Enterprise Instituted AND author of The Bell Curve: Intelligence and Class Structure in America.

Editors Note: Years ago, when I read  Charles Murray's earlier book Bell Curve: Intelligence and Class Structure in American Life,
I stopped reading when I discovered his intention was more investment in our best and brightest. I figured they could take care of themselves.
Now that the The World is Flat  according to Tom Friedman, and our best and brightest
must compete against many millions of the  the best and brightest from Asia, I have changed my mind.

"The cost of educational egalitarianism is doubtless high and may be difficult to justify in terms of economic efficiency
 and short-term productivity. Some students can achieve a given level of education far more easily and
therefore at far less cost, than others.

Yet there is a danger in a democratic society in leaving some children out sync with its institutions.
Such neglect contributes to exaggerated income concentration, and could conceivably be
far more costly to the sustaining of capitalism and globalization in the long run.
The value judgments involved in making such choices reach beyond the imperatives of the marketplace

"Much of our skill shortage can be resolved with education reform. But that will take years."   From

  The Age of Turbulence: Adventures in a New World by Alan Greenspan, former Chairman of The Federal Reserve
published in 2007 by Penguin Group, pages 406 and 407 respectively

"Can we get to a higher sustained rate of economic growth,
and a material improvement in national living standards,
merely by pumping up the resources we devote to education?
That question turns on whether there is a shortage of skilled labor in the United States,
a shortage not being met by our colleges and universities.
Despite all the ruminations about 'skills bias' in the patterns of technological change,
there is no such shortage. To the contrary,
our economy is full of highly technical and skilled people. 
It remains short of jobs for those people, as every college councilor
and every coordinator of a training program knows
."  From

 Created Unequal: The Crisis in American Pay by James K. Gallbraith, professor at the Lyndon B Johnson School of Public Affairs, University of Texas
publish in 2000 by University of Chicago Press,
from page208

"The better-performing students will  be treated much as chess prodigies are today" ... "The lesser-performing students will specialize in receiving motivation."

Average is Over by Tyler Cowen p. 198 Tyler is the
Holbert C. Harris Chair of economics and professor at George Mason University.

* " is those college-educated workers with functional literacy little better than the average high school graduate..."   "... who end up in these lower-level jobs." 

Who's Not Working and Why? Employment, Cognitive Skills, Wages, and the Changing U.S. Labor Market.

by economists Frederic L. Pryor of Swarthmore College and 
David L. Schaffer of the University of Wisconsin at Eau Clair, Cambridge University Press, 1999, page 48

Please contact us with your thoughts and suggestions.

"Education is a very lumpy investment where often there is little or no payoff from having a little bit more." 
..."There are big returns to the first years of education (the education where one gains literacy) and 
big payoffs to the last years of education (a college or graduate degree where one distinguishes oneself from the pack) but 
only small payoffs to those years of education that move the individual from somewhat below average to somewhat above average."  From

The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World by Lester C. Thurow, former Dean of the MIT Sloan School of Management
 and published in 1996 by William Morrow and Company, Inc. page 283

"When asked to make economic comments as if he were looking back on 1996 from 2096, 
economist Paul Krugman said the following on what he called "The devaluation of higher education."  
Or consider the panic over "downsizing" that gripped America in 1996. 
As economists quickly pointed out, the rate at which Americans were losing jobs in the nineties
 was not especially high by historical standards. Why, then, did downsizing suddenly become news? 
Because for the first time white-collar, college-educated workers were being fired in large numbers, 
even while skilled machinists and other blue-collar workers were in high demand. 
This should of been a clear signal that the days of the ever-rising wage premium for people with higher education were over, 
but somehow nobody noticed
."  From

The Accidental Theorist and Other Dispatches from the Dismal Science
by Paul Krugman, professor of Economics and International Affairs at Princeton University, and published in 1998 by W.W. Norton & Company, page 201

"Delivering literacy--even on the high level appropriate to a knowledge society--
will be an easier task than giving students the capacity and the knowledge to keep on learning, and the desire to do it."...
"All it requires is to make learners achieve. All it requires is to focus on the strengths and talents of learners so that they excel in whatever it is they do well." 
" But schools do not do it. They focus instead on a learner's weaknesses.
" From

The New Realities by Peter F. Drucker, pages 236 and 237  Peter is the
Clark Professor of Social Science at Claremont Graduate School, California and considered by some
 “the founding father of the science of management (LA Times)” published in 1989

The Department of Labor reported on page 9 of the Fall of 2000 issue of Occupational Outlook Quarterly that the 
oversupply of college graduates for 1988-1998
was approximately 1,900,000 and for 1998-2008 it is expected to be approximately 900,000. 
This means there will be almost three million college graduates from this period not working at college graduated jobs in 2009. 
This number will be even larger if:

1) the outsourcing of college graduate jobs to India, Ireland, etc. continues to grow
2) baby boomers do not retire as expected because they have not saved enough to retirement.

From Walter Antoniotti, editor of this site.

"When making an investment, whether it be in education, capital equipment, or the stock market, 
one should consider the potential income from the investment and the risk associated with success. 
The drop in real income earned by prime age workers for many levels of education between 1970 and 1994, 
even as education attainment by these individuals was increasing substantially, 
indicates a change should be made in how individuals and society distribute funds to be spent on education. 

Education is like politics, if you really want to know what is going on, follow the money.

Testing exists because of teacher egos, big profits for testing companies, politicians who realize it means votes, and the inability of parents to accept the special intelligence of their children.
Ironically the economic affect is reversed. Teachers and parents want a better life for young people and there actions hurt young people economically and emotionally.


For more information visit Who Gets the Good Jobs and How Much They Pay  and
  Education is Up For All, Wages are Up For Some Women

Please contact us with your thoughts and suggestions.

College is an academic experience and a social experience. 
For those with SAT scores of about 1200 or higher, the academic experience should predominate. 
Below 1000, the social experience should prevail. 
If an economic return from investing in school is relevant, at some point,
probably around an SAT score of 1000,  
the person should consider training rather than college. 

For more information visit Education in a World of Multiple Intelligence

Maximizing economic success requires investing in your special intelligence.
Academics advise everyone to invest in their math and verbal intelligence irregardless of there special intelligence. 
This results in a large number of high school and college graduates trying to succeed 
at something they do not do well rater than something they do well. 

A program similar to that depicted in the movie The School of Rock should be initiated in all schools.

   Full Story   Authors Note: This is not the first study to reveal that computers do not enhance learning.
Like everything, if you really want to know what is going on, "...follow the money."


Alternative paths to college completion: Effect of attending a 2 Year School.

"Recent research indicates that college students who transfer from community colleges are significantly less likely to complete a 4-year college degree than students who begin at 4-year institutions. This paper estimates models of college completion for both types of students. Based on these results, an Oaxaca decomposition indicates that students who attend 2-year colleges are at a disadvantage due primarily to lower individual quality rather than the lower quality of 2-year colleges. This result has implications for public policies that seek to increase the role of 2-year colleges as a means to increase the number of students completing 4-year degrees."

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Standardized Tests

Education is an admirable thing, but is well to remember from time to time that nothing that is worth knowing can be taught.
Oscar Wilde

"Delivering literacy--even on the high level appropriate to a knowledge society--will be an easier task than giving students 
the capacity and the knowledge to keep on learning, and the desire to do it."... "All it requires is to make learners achieve. 
All it requires is to focus on the strengths and talents of learners so that they excel in whatever it is they do well."
 ..." But schools do not do it. They focus instead on a learner's weaknesses."

From pages 236 and 237 of The New Realities (ISBN 0060916990) by Peter F. Drucker
Clark Professor of Social Science at Claremont Graduate School, California and considered by some
 “the founding father of the science of management (LA Times)”

1Kevin J. Clancy, chairman and CEO of Copernicus, a global marketing consulting research firm   
"...developed a statistical model to predict MCAS  (Massachusetts Comprehensive Assessment System) scores..."    
at different schools based on these socioeconomic characteristics “
... percentage of families that receive aid to dependent children; have two parents; are below the poverty line; 
are white; and hold a college bachelor’s degree or higher. 
What we learned is that how well children perform on MCAS scores
 has almost everything to do with parental socioeconomic backgrounds
 and less to do with teachers, curricula, or what children learned in the classroom.”

1 Making more sense of MCAS scores, by Kevin J. Clancy, Boston Globe, April 24, 2000, page A19

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The testing required by "no child left behind" is causing some students to concentrate on test subjects at the expense of vocational subjects.
Just what we need! Now we will have a shortage in vocational specialists to go along with our surplus of college graduates.

No child left behind should be changed to a job for every child. If this were done, data of contained in   
2004-2014 Job Growth by Required Education and Occupations, Not All College Majors Are Created Equal, and
Many Without A Bachelor's Degree Have High Earnings
could be used to make educational decisions. Every college student choosing a major should be required
  to sign a document stating they have read Recent Earnings Data By Major.


Education should change from an answer based system to an Activity Based, Real World, Question Based Academic Curriculum.

Example: Unlike fractions, mixed numbers, and mathematics vocabulary such as real numbers  are not relevant to real world mathematics
and should not be part of the standard mathematics curriculum.

Walter Antoniotti

For more information visit   A Critique of Standardized Tests and
Not All College Majors Are Created Equal.


Academics Versus Educators

Academics are scholarly. To them, pure knowledge is of prime importance, especially in their area of expertise. 
Academics tend to be prejudice toward their area of expertise. 
They feel everyone should have substantial knowledge in this area.
Academics who choose to work in an educational environment, usually begin by teaching.
Because they have a strong belief in their subject matter, 
Academics often get involved with curriculum development and academic standards.

Educators enjoy students and the classroom environment. 
Seeing someone learn is important, especially if the material will help the student enhance their economic and social well-being.
Educators believe intelligence is normally distributed. They get discouraged when teaching 
a curriculum designed by academics because said curriculum is often beyond the grasp of academically average students. 

Textbook content is controlled by academics who are influenced  by  their prejudice toward the purely academic and 
publishers who are concerned with profit.

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Concepts Everyone Should Understand

1. Most physical and personal characteristics of people are normally distributed.
2. Much of behavior is learned.
3. The majority of a person's personality is determined by the time they are six years old.
4. Personal characteristics that do not follow the law of  diminishing marginal utility are most import to understanding human behavior. 
Constant or even increasing utility may exist for reading, religion, following sports, drinking, gambling, studying, womanizing, etc.

Concepts the Majority Can Not Understand

thinking on the margin
a double negative makes a positive
unlike fractions,
decimals, and percentages are similar
debits and credits 

Why College Tuition is Not Going Up Rapidly 

Suppose a college needs to spend an additional 6% next year. 
It solves the problem by increasing tuition revenue by 8% and 
this increase is balanced with an increase of 6% in cash to be 
received and a 2% increase in college-sponsored financial aid.
I call this 2% funny money because it only exists in the mind of 
some fund manager because no cash or other valuable asset will 
be received.

Interestingly, academically poor students who a college doesn't 
really want do not receive funny money financial aid and must be 
able to pay 100% in real money. So they pay extra to finance those 
the college really wants. Top students are drawn to a school with 
funny money scholarships. One result is poor students often loose
a job or a place in graduate school to a better student whose 
tuition they helped finance.

Lately, colleges have been using this nonexistent funny money as 
the college's contribution in matching programs to encourage donors 
to give real money to their college. I have seen two such requests 
from college presidents in the past year.

Tuition increases over the past 20 years have been substantially 
overstated because of funny money as about 2% of the 8% year
after year adds up. One college with less than 2,000 students 
increased the annual funny money budget from about 
$1,000,000 to about $15,000,000 over the past 15 years.

Is the bookkeeping, paper transaction used to create  non-existent, 
college-supplied financial aid fraud, unethical or good marketing?
Nonprofit organizations are required to report the amount of funny money 
(tuition not received or receivable in real money) on their tax return but very few do. 

Wealthy students going to colleges where they are in the bottom half academically pay more,
Less Wealthy students going to schools where they are in the top quarter pay less.
The closer you are to the bottom or top of your class, the more or less you pay.

The Follow the Money at Funny Money to see how two colleges, one using much more funny money than the other compete for students.

Franklin Pierce College has< much higher tuition than Marietta College, but subtracting the funny money makes tuition actual paid by the students,
about the same. But average tuition is higher because of the 10 years it took both colleges to build the funny money portion of tuition.
Almost all college do this.

Sometime around the turn of the century, colleges began loaning funny money rather than giving it as a grant. This created he possibility of it being paid back. 
Bad debts often run over 50%, but whatever they get is found money as before it was a grant which is a gift! 



              Maybe we humans took a turn from the path of our natural evolution.  Maybe it is only now that we are coming to see this alternate route.  As I see it, we living beings started out on a journey of evolving toward a more and more refined energy.  Along the way, it seems to me that we turned off this path when we ate the apple from the tree of knowledge.  Instead of letting our natural evolution take its course, we developed language and other symbolic abstractions and pursued this path of desire to be in control.  All knowledge is for control.  That is not a bad thing, it is just what it is.  But, in the turning away from our natural evolution, we have lost something waiting for us, but unknowable to us.

                Let me back up for a minute.  As I grew up, I was always aware of observing the world around me from kind of a third person position.  I struggled in school since I sensed that all this knowledge was mostly pretty useless.  I still did ok, but as my counselors always said, “he does not fully apply himself”.  Yes, I held back and somehow preserved my awareness.  I did not identify or attach to the path of knowledge.  I believe that it was this sense of separation that led me to having some very powerful experiences that let me see more fully the folly of living in knowledge.  I have noticed that almost all of the writers about this kind of stuff report the same kind of similar separation in growing up.  So maybe it comes built into some of us, I don’t know.

         Awareness evolves and knowledge accumulates.  We can not control the evolution of our awareness any more than we control how tall we grow.  Knowledge holds out the hope of more and control by more and more accumulation until we get to the point of knowing so much that we get to a place of frustration, anger, fear, or other emotion because the control never comes. Meanwhile, on a parallel path is the evolving of our awareness, if you have given it some of your energy.  That is why we meditate.  The quieting of the knowledge filled chatter in our brain, allows some of our human energy to be used to grow our awareness.  Again, to meditate to “get” more awareness is false meditation based on the knowledge path.  Awareness comes on its own terms.

         There is no clearer evidence for this than what I saw in my dog Phoebe.  Her awareness around what I was up to often astounded me.  I wrote before about the many times I tried to trick her into going to the barn to get bathed.  She always knew.  Her awareness was evolved to a place my knowledge could not comprehend.   Castaneda, in his various books, speaks to this other reality also, but to get there you must stop the internal chatter.  Quieting the knowledge mind lets the awareness mind move forward.

            A couple final points.  Your knowledge mind will always try to capture and control the awareness path.  This defeats the purpose, and letting go of control is the hardest thing we knowledge based people can do.  Secondly, it is an interesting practice to read the Bible, Zen, or any books on consciousness and see if you can read it as “not knowledge”.   See if you can read the sayings of Jesus and hear it as not a set of words to live by, but a pointing to getting out of your knowledge and into your awareness.  

Tom Lane 7/11/06

Thoughts on President Obama's Educational Reform

I agree with the idea of a longer school year but disagree with having a longer school day.
Studies have proven that two ninety day terms with a long summer vacation is academically inefficient.
It is also economically inefficient.
A longer school day does not take into consideration diminishing returns.
The attention span of many students decreases as the day wares on. 
Little additional learning, and for some, less learning would take place with a longer school day.

The present high school system has five fifty-minute academic classes per day for 180 days which yields (50 minutes)(5 days)(180 days) = 45,000 minutes per year.
The new system would have three 15 week terms separated by two-week vacations. The remaining six class days would be for holidays during the year or an added vacation time.
This 225 day school year would have five 45 minute classes with five minutes between each class. Total minutes per year would be (45 minutes)(5 days)(225 days) = 50,625.
This would be a 10% increase. Schools would run double sessions from 8 AM to 12 Noon an 1 PM to 5 PM. In the beginning, students would be required to attend 225 days per
year and teachers would be required to teach three sessions over 225 days but would have a shorter day. In time, both students and teachers worthy could be double up creating
additional vacation time and/or early graduation.

Twelve years of public free education was a good number for many years and now that pre-school and kindergarten is required, elementary and high school should be ten years.
Student scold stop at sixteen or go on to higher education of some kind.

School  facilities would be used much more efficiently. In affect, school utilization would double. School districts with below standard facilities could close poor schools.
School officials would find many unique uses for  vacant classrooms, facilities, and teachers who want to earn extra money.

We Should  Educate for Careers.   Visit Change Education for an innovative view.

by Walter Antoniotti, creator of the Free Internet Libraries, author of the free Quick Notes Learning System books series, and President of 21st Century Learning Products.

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Interesting Thoughts Concerning Education

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