(Guest Post by Matthew Ladner)
Good column from the Hoover duo in today’s WSJ:
Hispanics attending school in California perform no better than the average student in Mexico, a level comparable to the typical student in Kazakhstan. An alarming 43% of Hispanic students in California did not complete high school between 2005 and 2009, and only 10% attained a college degree.
Anyone worried about income disparity in America should be deeply disturbed. The failure of the K-12 education system for so many students means that issues associated with income distribution—including higher taxes and less freedom in labor and capital markets—will be an ever-present and distressing aspect of our future.
Examples abound of the ability to make sharp improvements in our K-12 system. By not insisting on immediate and widespread reform we are forgoing substantial growth in our standard of living. The problem is obvious. The stakes are enormous. The solutions are within our reach.
Jay P. Greene's Blog 
I’ve read these sorts of “education leads to prosperitization” stories from time to time. Generally in the context of why public education needs a big boost in spending and why teachers need a big boost in pay.
I was skeptical the first time I read these kinds of opinion pieces and the reason is that it’s not at all clear that an expenditure on education leads inexorably to economic party-time. The correlation’s tenuous and the causation nowhere in evidence. In fact, there are examples, pretty well known examples, which undercut the idea. And that’s ignoring the obvious interest some folks have in sending more money into the edu-sphere.
Right at the top of the list is China but any of the “Asian Tigers” will do since none of them have expanded public education spending commensurate in any way with their economic expansions. Even if they had the leading edge of the economic benefit’s going to lag the start of the budget increases by some significant number of years. After all, if you double education spending this year it’s only those kids who are graduating at the end of this year that’ll see the money and that’s not a very big number of kids. If increases in education spending were a spur to economic activity I’d expect to see a rise in the economy tied, roughly, to the size of the cohort that graduated since the budget increases were put into effect and the size of the budget increase.
But that’s not the pattern that these various economies have displayed. In fact, the strongest tie is to a liberalization, you should pardon the expression, of trade policies and reduction in government interference in the market.
I’d say that the relationship is rather more complex then the simple spend-more-get-more solution proposed by Messrs Shultz and Hanushek.
In the short to medium term removing the impediments to economic expansion is a much more effective means of stimulating economic expansion then is greater funding for education. Later, as more demanding occupations are rationalized by an expanding economy and a wealthier populace, there not being much call for the skills necessary to advanced technology among people too poor to afford it, increasing the funding of education may make sense although even at that point it’s not clear how worthwhile public money is in the spurring of economic development via expenditures in education.
It may actually be that, just like everywhere else in the economy, a flood of government money so distorts the market that not only don’t the expected results materialize but in more then a few cases the results of a flood of government money are counterproductive to the end that was originally proposed as the reason to spend the government money. I know the worthies who regularly post on this site can’t court the likelihood of psychiatric diagnosis that would attend the authorship of the opinion that a golden age in education would be ushered in by the orderly withdrawal of government from the education sector, and an attendent surge in economic activity, but I’m under no such threat.