A Heretical Plan for Cutting Spending on Education

Government at all levels fuels an educational arms race through lavish and indiscriminate funding.


Government at all levels fuels an educational arms race through lavish and indiscriminate funding. Given all we know and suspect about the low social returns on investments in schooling, what practical changes should concerned citizens favor?

Sharply reduce government support not only for higher education, but for high school as well.

The increasingly popular "Too many kids are going to college" slogan suggests that social returns are merely low for the weakest post-secondary students. In fact, social returns to education are low virtually across the board.

The good news is that basic economics provides a simple remedy for wasteful investments: Reduce them. If the car industry earns a low return, automakers should respond by building fewer cars, starting with the biggest money losers. As the supply of new vehicles falls, prices will rise…until automobiles are once again worth producing.

Concerned citizens should view schooling with the same investor's eye. If it has a low return, we need less of it. The supply of highly educated workers will fall, but this is a feature, not a bug. As supply falls, market rewards for education will rise…until schooling is once again worth encouraging. In light of the very poor current social returns on education, however, these rewards would truly have to soar first.

In the U.S., spending on public elementary, secondary, and tertiary schools now amounts to almost $1 trillion a year. Private education also relies on subsidized student loans and other government support. This gives society a nearly foolproof remedy for educational waste: Cut budgets for public education and subsidies for private education. Give schools less taxpayer money. The central question isn't "How?" but "Where do we start?"

Cut high school a lot, college more, and master's programs the most.

Governments overinvest in education across the board, but they do not overinvest evenly. As a rule, the "higher" the education, the greater the waste—and the deeper the desirable cuts. The master's degree is a disaster, earning negative returns as far as the eye can see. (Even Excellent Students don't recoup the costs to society of getting an M.A.) Bachelor's degrees aren't quite as awful: Investing in strong students may yield low but positive returns. High school is the least bad. Making generous assumptions, its social return is reliably mediocre—and for low-ability young men, possibly stellar.

Cautious citizens might want to base education policy on very generous assumptions. Why reform the system when there's an outside chance it's not making us worse off? But we should hew to stricter standards. Instead of stacking the deck in favor of the educational status quo, let's base policy on reasonable estimates of the human capital/signaling split. If just two-thirds of the return on education comes from signaling, the individual often profits, but society does not. Heretical as it is, serious cuts—even to high school—are the wise response.

Do not send average or apathetic high school students to college.

Vast swaths of college students earn ruinous social returns. Luckily, their identity is predictable before they set foot on campus.

Aptitude matters: Average high school students generally become weak college students. And motivation matters: Apathetic high school students generally become disengaged college students.

While neither of these generalizations is infallible, sensible investors insist on good bets, not "bets that sometimes don't fail." Note that low aptitude and low motivation tend to go together, as well, because human beings find failure disheartening.

Why do I say "Don't send average or apathetic high school students to college" rather than "Send fewer average and apathetic high school students to college"? Because the social returns for such students aren't merely low; they're ruinous. To bring their returns up to tolerable levels requires a massive increase in the college premium, and a comparably massive reduction in college attendance. So massive, in fact, that average and apathetic high school students must all but vanish from college campuses.

Some idealistic educators insist better pedagogy can revolutionize how much students learn and enjoy learning. Concerned citizens should treat these claims like any other rosy sales pitch: We'll give you our tax dollars after your miraculous revolution delivers on its promise to turn ordinary teens into teachers' pets.

Don't subsidize low-earning majors.

Steering average and apathetic high school students away from college will prevent an enormous waste of social resources. Once students arrive on campus, however, there is another resource bonfire to avoid: low-earning majors. Selfishly speaking, these majors can be a tolerable deal—especially for lovers of literature, history, and the arts. Socially speaking, however, they're an open wound. Returns are negative across the board—even for strong students who enjoy these unprofitable subjects. Subsidizing their studies isn't so much an "educational investment" as a four-year hobby camp.

Make high school, college, and graduate programs more vocational.

Signaling's share of the benefits from education is not a law of nature. It reflects the choices society makes about what students learn.

Current curricula are studiously otherworldly: High schoolers spend about as much time on arts, foreign languages, history, and social studies as they do on English and math. Few college majors these days even pretend to prepare students for jobs, and vocational programs still force people to burn years on "breadth" requirements and esoteric theory.

Public high schools should drastically reduce requirements and resources for subjects that almost never lead to paying jobs. They should restructure English classes around business writing instead of classic literature and poetry. And they should stop requiring courses in areas—such as the sciences and higher mathematics—that only lead to careers for top students.

What would fill the void? For starters, thousands of extra hours building literacy and numeracy. Those are precious job skills at which a third to half of adult Americans are not proficient, according to tests such as the National Assessment of Adult Literacy. Beyond that, schools should revive and modernize courses that explicitly prepare students for jobs, especially in occupations facing growing demand. Better still, schools should award academic credit for apprenticeships and other forms of practical experience likely to prepare kids to be productive members of society after graduation.

Adapted from The Case Against Education