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Policymakers must do their homework

By Andrew Leigh - posted Friday, 20 May 2005

Quiz time. How much do you think the literacy and numeracy standards of Australian 15-year-olds improved from 1975 to 1998? Those who answered "a little" or "a lot", stay back after class. The correct answer is: they fell. A report by Sheldon Rothman of the Australian Council of Educational Research shows the literacy and numeracy standards of 14-year-old Australians (in year 9) were lower at the end of the 1990s than in the mid-1970s.

The study used questions from a special longitudinal survey in which identical questions were asked in each year, and the results of these questions used to standardise the results (due to a change in the survey design, the most recent results are not comparable, so the latest data we have is from 1998).

These literacy and numeracy scores affect students' life outcomes. Several other studies have shown those with better literacy and numeracy scores were more likely to have finished school, more likely to be employed, and tended to have higher hourly wages. Literacy and numeracy scores clearly do not measure everything that is important about education, but neither can they be dismissed as meaningless. Schools also teach students a wide variety of other skills - from science to socialising - that are not measured by literacy and numeracy tests. And we cannot know from these results whether schools are doing better or worse on these other measures. What we do know is that on the criteria we can measure, Australian schools are not doing as well as they did in the 1970s.


The answer is more complex than "schools need more money". In today's dollars, government schools spent $3,141 per pupil in 1975. By 1998, real spending per pupil had more than doubled, to $6,770. Much of this new spending was in reducing student:teacher ratios. Over this period, the number of students per teacher fell from 25 to 17 in primary schools, and from 16 to 13 in secondary schools. Australian schools have more money, but their literacy and numeracy standards are lower. In economic jargon, the productivity of Australian schools has fallen.

If resources have risen and class sizes have fallen, what else might have changed? One possibility is that the number of high-ability people entering the teaching profession has declined since the 1970s. In the US, where we have richer data on teacher quality, such an effect can be readily observed. Measuring quality either by teachers' standardised tests, or by the selectivity of the university that the teacher attended, there has been a sharp decline in the number of highly talented American women entering the teaching profession. It seems plausible that the same phenomenon may have occurred in Australia.

Given these troubling facts, it seems surprising that many Australian policymakers are so resistant to even modest reforms. In Britain and the US, annual publication of school-level test score information (adjusted for socioeconomic status) is supported by all major political parties. Yet Australian governments often oppose the release of information that would allow parents to compare schools' performance.

A logical corollary of releasing more information on school performance is that students should be allowed more flexibility to move between schools. Competition is not only about ensuring students can move from low-performing to high-performing schools; it is about creating a set of incentives for all schools to perform at their best.

If it is indeed the case that teacher quality has declined in Australia, then we should be open to unconventional solutions to attract and retain the best teachers. Faced with a similar crisis, New York City recently embarked on a campaign to encourage professionals in other occupations to retrain as teachers, using slogans such as "You remember your first-grade teacher's name. Who will remember yours?" Streamlining mid-career entry into teaching might help improve the quality of the profession.

Finally, Australian governments should also consider whether the structure of teacher pay could be improved. Average salaries for Australian teachers are generally above the developed country mean, but teacher salaries flatten out much more quickly than in most other rich countries. In NSW, a starting teacher receives $36,000, while the best and most experienced teachers receive $66,000. It is difficult to think of another profession where the rewards for performance and experience are so low.

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First published in the Sydney Morning Herald on May 16, 2005.

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About the Author

Andrew Leigh is the member for Fraser (ACT). Prior to his election in 2010, he was a professor in the Research School of Economics at the Australian National University, and has previously worked as associate to Justice Michael Kirby of the High Court of Australia, a lawyer for Clifford Chance (London), and a researcher for the Progressive Policy Institute (Washington DC). He holds a PhD from Harvard University and has published three books and over 50 journal articles. His books include Disconnected (2010), Battlers and Billionaires (2013) and The Economics of Just About Everything (2014).

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