Odds and Ends

March 23, 2011

WordPress was down most of yesterday, preventing me from posting.  Here are some of the topics I was considering for a post:

  • I finally saw The Social Network.  As always, I enjoyed Aaron Sorkin’s clever, rapid-fire dialog, but I couldn’t stop thinking about how creepy it was to write a fictionalized and unflattering account of real, living people.  There is no evidence that Mark Zuckerberg is the status and girl-craving jerk that Sorkin made him out to be, but there is plenty of evidence that Sorkin behaves that way.  I guess the film is really a fictionalized autobiography of Aaron Sorkin, except that Sorkin didn’t create a multi-billion dollar enterprise that tens of millions enjoy using and that has helped topple despots in the Middle East.
  • I saw that my fellow Manhattan Institute-refugee, Walter Olson, has a new book out on how law schools perpetuate a political ideology that gives more power to lawyers and government. Schools of Misrule sounds like it has a fascinating thesis except I suspect that the same argument could be made about almost every department at universities.  I can assure you that the social sciences are filled with people who sit around in their offices dreaming about how the rest of the world should be structured if only the world would listen to them.  I guess the difference is that law school grads are actually more likely to have to power to put their dreams into action.
  • Jim Stergios has a great post over at Pioneer comparing Bill Gates and Steve Jobs on their visions for education.  He writes:

So Bill Gates lets us all know what he really has in mind on standards and the liberal arts. In a speech to the National Governors Association in late February, he suggests that higher education spending be devoted largely to job-producing disciplines.

In his view we should drop funding at the higher ed level for the liberal arts, because there is not much economic impact/job creation impact from the liberal arts.

Compare that to Steve Jobs, who during his release of the iPad 2 (admittedly not the most successful launch I’ve seen of an Apple product), trumpeted the liberal arts.

Be sure to read the full thing because the quotations from Gates and Jobs are illuminating.

7 Comments | higher education, instructional reform | Tagged: , , , , , | Permalink
Posted by Jay P. Greene

Douglas County Offers Vouchers to Students

March 16, 2011

The school board in Douglas County, Colorado voted unanimously to offer vouchers worth $4,575 to as many as 500 students who were not previously enrolled in private school.  The measure would save the district between $402,500 and $2.2 million and would greatly expand options for those families, including religious and secular private schools.

The teacher unions and their allies will almost certainly try to tie the program up in court and run their own board candidates in the hopes of rolling back the policy.  But with choice and other ed reforms being pushed all over the country and with the ability of unions to automatically deduct dues from payrolls being eliminated in a number of states, the ability of the unions to fight every battle in every location is limited.

The most effective political strategy for adopting ed reform is to “flood the zone.”  Propose a lot of ideas in a lot of places and the unions find it nearly impossible to block every one.  That’s what Jeb did in Florida and now reformers are adopting that strategy nationwide, enhancing its effectiveness.

7 Comments | teacher union, vouchers | Tagged: , | Permalink
Posted by Jay P. Greene

A Union I Like

March 15, 2011

I just want to make clear, given my post yesterday,  that while I am adamantly opposed to public sector unions, I have no problem with worker’s attempting to negotiate over wages, benefits, and working conditions in the private sector.

In the private sector, if unions ask for too much, at least they experience the natural consequences of destroying their own companies or industries (to wit, the auto industry).  In addition, there are owners on the other side of the bargaining table who have strong incentives not to concede too much or they will lose their wealth.  Collective bargaining in the private sector is a voluntary negotiation over how to split the revenue of a company.  No one should be compelled to work for less than they think reasonable and no one should be compelled to pay others more than they think reasonable.  In the end, owners and workers have to reach a mutually acceptable agreement, whether collectively or individually.

But in the public sector, unions are almost entirely insulated from the consequences of making unreasonable demands since governments rarely go out of business.  Unlike in the private sector, public sector unions can drive total revenue for their industry higher without any improvements in productivity simply by getting public officials to increase taxes.  And the public officials on the other side of the table are at least  partially selected and heavily influenced by the unions themselves.  In the private sector, unions can only select the officials with whom the bargain to the extent that they are shareholders.  In the public sector, one only need be a citizen, and the unions are much better organized and financed citizens than is the average taxpayer.

One private sector union with which I am currently completely sympathetic is the NFL Players Association.  First, the owners are asking that owners be allowed to keep the first $2 billion of professional football’s $9 billion in annual revenue.  That assures them close to a 22% operating profit margin, since football teams have few expenses beyond the player’s salaries and stadium costs (some of which are stupidly subsidized by taxpayers).  What industry can guarantee its owners a 22% operating profit margin?

In addition, the owners have always managed to get players to agree to a cap on team salaries as a further way of ensuring their profits.  Anyone who is for the voluntary exchange of labor for pay should oppose industry-wide salary caps.  All that a cap does is prevent excellent workers from bargaining for a larger share of total revenue.  This discourages excellence and guarantees owner profits at the expense of workers.

And for those of you who say that salary caps are needed to promote equity in the competitiveness of teams…

1) Equity is not the prime goal of sports (or most other endeavors).  Excellence is.  If you want to watch contests that are always perfectly matched, I would suggest that you watch people flipping coins.

2) Rewarding more successful teams and players with the possibility of earning more money provides the proper incentives for them to try harder to win.  If you don’t think that revenue sharing with a cap undermines incentives I have two words for you — Cleveland Browns.

3) If you are afraid that larger market teams will always win, just look at baseball which lacks a cap.  Yes, big market teams are more likely to be in the post-season, but they don’t always win.  If you think big markets and big payrolls can guarantee winning I have three words for you — New York Mets.  Besides, what’s so wrong with larger markets more regularly having teams in the race for a championship?  Only a bizarre system would prefer having small markets, like Green Bay and Indianapolis, regularly in the hunt.

And if you think NFL players are a bunch of rich felons who don’t deserve extra money, I would remind you that the average career is about 3 seasons and many players end up as cripples for life.  The NFL is exploiting these workers like crazy and any decent liberal should be on the side of those who are exploited.

Unfortunately, the NFL players union has been awful in the past and failed to do nearly enough to protect their members from this exploitation.  I hope it is different this time.  And I hope that the unions prevail (as long as it is in the private sector and without government subsidies or coercion).

8 Comments | teacher union | Tagged: , , | Permalink
Posted by Jay P. Greene

The Public Funding Perpetual Motion Machine

March 14, 2011

Both the NPR and public-sector union controversies make me think of perpetual motion machines.  In both cases organizations receive government funds which they can use to lobby public officials to receive more government funds.

Most people are familiar with this concern when it comes to public sector unions given that it is well-documented that unions use money automatically taken from publicly paid salaries and benefits to donate to campaigns, organize, and lobby for higher salaries and benefits from which they can extract higher dues to push for even higher compensation, etc… Wash. Rinse. Repeat.

Mind you, I have no problem with private sector unions since they can only negotiate over how to divide profits with management and shareholders and cannot lobby to increase revenues without also increasing productivity.  But public sector unions can lobby for higher revenues from which they can extract a larger share for themselves without having to do anything to enhance productivity.

But people are much less familiar with how NPR utilizes the same Public Funding Perpetual Motion Machine.  As Congress debates de-funding public broadcasting, NPR is making announcements alerting their listeners to this possibility and urging them to visit a web site to organize a push to maintain and increase taxpayer funding of NPR. So, NPR wants money so that it can tell its listeners to organize to lobby so that they keep getting money.  Wash. Rinse. Repeat.

Like all perpetual motion machines, these publicly funded ones are also frauds.  The system is not self-sustaining and requires that resources be extracted from somewhere else — in the case of NPR and public sector unions, it is extracted from the taxpayer.

I should also note that I like a number of programs on NPR.  But it is completely unacceptable for them to take money from me and others by force to pay for their broadcasts.  I’m confident they can generate sufficient funds voluntarily and may well soon have to do exclusively that.

2 Comments | teacher union | Tagged: , , | Permalink
Posted by Jay P. Greene

Universities as Non-Profit Conglomerates

March 8, 2011

Mission creep is the bane of the modern university.  Once upon a time universities believed that their mission was the discovery and dissemination of knowledge.  Accordingly, they focused on teaching and research.

Universities are now straying far from this core mission and launching an array of new enterprises.  They run health-care systems, engage in property re-development, serve as venture capitalists for start-up businesses, etc…

To reflect their new status as non-profit conglomerates, universities espouse missions that are only tangentially related to their previous core function of education.  No longer do universities emphasize their founding mottos, such as “veritas” or “disciplina in civitatem.”  Instead, we see Ohio State University calling itself the “economic engine” of Ohio and declaring “We’re in the progress business.”

No they aren’t.  At least, they shouldn’t be.  They are in the knowledge business.  Universities forget this at their and everyone else’s peril.

The more that universities see their mission as progress or being an “economic engine,” the more they are straying into business at which they are less competent, on which they lose more money, and which distract them from their core responsibilities.

We have had experience with profit-seeking industrial conglomerates in the 1970s and it didn’t go very well.  Businesses grew large, unfocused, and overly bureaucratic.  But in the business-world, there is a remedy for this type of gross inefficiency.  Corporate raiders took-over these conglomerates and made a fortune breaking them up and selling off the pieces.  They realized that these businesses would be much more effective if they weren’t combined in a conglomerate.

The non-profit sector lacks a similar remedy.  Universities are expanding into a variety of businesses and there is no one to stop them other than a board of trustees which has been fully-co-opted by administrations (just as the boards of industrial conglomerates were co-opted by their management teams).  Raiders can’t purchase the grossly inefficient non-profit conglomerates masquerading as universities and make a fortune by breaking them up and selling off the pieces.  Instead, we increasingly suffer from administrative bloat and inferior quality education.

The only prospect for these non-profit conglomerates to be broken-up is that they tend to lose more money with each new venture.  We shouldn’t expect universities to be efficient at operating health-care systems, property re-development, or venture capitalist operations.  They claim to be attracted to each new enterprise as a way of making money to subsidize their core functions, but the reality is that their losses pile-up and their administrative over-head swells as they experience mission creep.  They all fantasize that their venture capitalist efforts will spawn the next Google, but I am willing to bet that the average return on start-up businesses for universities is negative.

Returning to our Ohio State University example, their total annual revenue has grown to $4.7 billion.  It becomes very difficult to run a $4.7 billion business that also teaches individual students well and conducts quality research.  As OSU’s president, Gordon Gee, describes his institution: “Universities are large and complex — ours more so than any other. Trying to describe all that we do in one sentence seems a daunting task.”  Gee, President Gee, maybe that should be a sign that OSU is trying to do too many things.

Of the $4.7 billion in annual revenue, OSU gets $2.3 billion from its Medical Center.  Why should universities also operate gigantic health care systems?  I understand that universities may want a relationship with hospitals to help train their students and provide opportunities for research, but frankly that can be done without having to own them.  And even if it were efficient to own a hospital for teaching and research opportunities, there is no reason to own an entire network of medical  facilities and services.

I’ll bet that OSU requires large government subsidies for both its medical and traditional educational operations.  And I’ll further bet that those loses could be reduced, on both ends, if they spun off their Medical Center.  The reasons to combine them and to add a host of other “economic engine” activities is not financial or educational efficiency.  The reason is to satisfy the desire for empire building among senior university officials and their compliant boards.

We may not have corporate raiders to break-up these non-profit conglomerates, but we will eventually have angry taxpayers who grow tired of subsidizing their losses.  When the subsidies get cut, universities will be forced to shed these extraneous and money losing ventures and focus once again on teaching and research.

5 Comments | higher education | Tagged: , , | Permalink
Posted by Jay P. Greene

A Teacher’s Comment

March 3, 2011

I’ve pasted below, in full, the comment that a teacher wrote in response to Bob Costrell’s op-ed in the Wall Street Journal about the expense of teacher health and retirement benefits in Milwaukee.

Before you read it, I just want to make a few points.  First, this type of comment is not nearly as rare as you might hope.  I’ve written on teacher pay myself and let me tell you that a non-trivial number of teachers react like this.  Second, when I read comments like this I wonder why their authors are still teaching.  They seem to hate their job, hate the kids, and are filled with rage.  If things are that awful perhaps they should look for other lines of work.  Third, comments like this make me worried about how bright these teachers are.  This guy clearly has difficulty with written English.  He also has a hard time rationally processing the argument raised by Bob Costrell’s piece.  The op-ed was about how Milwaukee teachers are paid 74.2 cents in benefits for every 1 dollar in salary.  That rate is unsustainable and lacks transparency because fringe rates are less visible than salary.  The comment does not rationally respond to any part of that argument.  How can this person teach anything if he can’t read and understand an argument?

Let me be clear, I do not think all or even most teachers are like this guy.  But a non-trivial number of them are.  All of us, especially the good teachers, should be focused on how we can get people like this out of the classroom as quickly as possible.

Here’s the comment:

Mr. Costrell (and anybody who agrees with Bob),

You obviously have never experienced “teaching” to its fullest.

Teachers are not typical workers.

You obviously haven’t made a life-long career of “teaching” which cannot be expressed/explained in one word “teaching” let alone a discussion blog: You stand in a room for 7 hours a day 25-35 kids, unmotivated, sometimes you[‘re the best they’ve got, many with broken homes and social issues, baggage. A teacher enters the profession to make a positive difference in the world, then a kid in the class tells you “F U, I’m not doing this…”

Why don’t you take a Special Ed Teacher’s place for one day, and get SPIT on, kicked, smacked, get your hair pulled, get called names, and I dare you to come back the next day, and do it all over again.

Why don’t you stand in a teacher’s place, and put in your 7-3 with barely a lunch, cramming it down your throat in 10 minutes, because you spend your “LUNCH” calling parents, helping kids, tutoring, and planning awesome lessons.

Why don’t you, after your 7-4 shift, continue to coach until 6pm, and then continue to coach at the game, so the bus can return to the school at 10pm, and you can get home by 11pm, just to wake up at 5am and do it again the next day…I dare you. (and you wonder where our extra pay comes from).

I dare you to try to eat your lunch after a kid tells you sick stories, stories that would make you sick for weeks, where DCFS gets involved, that I can’t even share due to confidentiality and legality.

Why don’t you give it 150% everyday, all of the above, in addition to accepting constructive criticism from administrative and government demands for higher test scores, while balancing trying to teach your kids “critical thinking” skills, in addition to solely passing a standardized test, just to meet NCLB.

I dare you to step in a teacher’s footsteps for a day, and then standing up for what you believe in, and trying to keep your basic bargaining rights, and then losing your rights, and go back and give it 75% or more….do you seriously think a teacher would give it their all from that point on.

Why don’t you call all your teachers and thank them for everything they taught you: the ability to write what you believe, even though what you believe is a bunch of B S.

I dare you to send your kids to a school now, after posting your opinion.

Actually, good luck to anybody sending their kids to Wisconsin public schools after insulting the Wisconsin teachers like that. Teachers are more than just “teachers”. Don’t you forget it.

Mr Costrell, why don’t you walk in a teacher’s footsteps, and make a lifelong career out of it, before you open your stupid mouth.

FYI-you’re not a teacher, you’re a Harvard professor. Get off your high horse.

9 Comments | teacher quality | Tagged: , | Permalink
Posted by Jay P. Greene

Social Promotion Fig Leaf

March 1, 2011

Matt Ladner and I have been testifying to state legislatures around the country about the effects of Florida’s policy to end social promotion in 3rd grade.  The policy default-retains all 3rd graders who score below a certain threshold on the state’s reading test.  There are several exemptions to being retained, but about 59% of low-achieving 3rd graders repeated the grade.

Research that Marcus Winters and I have published in the peer-reviewed journal, Education Finance and Policy, finds significant achievement benefits for students retained under the policy.  After two years the retained students outperformed their promoted counterparts by about .46 standard deviations, which is the equivalent of receiving about 6.6 additional months of reading instruction.  We compared students who barely performed above the test threshold on the 3rd grade test and were default-promoted to students who performed just below the test threshold.  This regression-discontinuity design approximates a random assignment experiment.

When we testify about this research we are now commonly being asked about a “study” from the Miami-Dade School District that claims to find the effect fades after two years.  Clearly the opponents of the policy (read: the unions) are arming folks with this to dispute our research findings.  When people oppose a policy that is supported by rigorous research it is important that they at least have a fig leaf of research to support their opposition.  The Miami-Dade report is that fig leaf.  The report concludes:

This study has replicated the procedures of theGreene and Winters  (2006)  paper  evaluat ingFlorida’s test-based promotion policy and hasderived very different judgements. Where theyconcluded that the retention policy led to significant improvements in reading for the retained students,this study finds no ultimate advantages. However,it would be a mistake to interpret this study as somekind of indictment of the Greene and Winters work. Their interpretation was valid for the way the datalooked after two years. The picture is quite different after four years

First, it is important to note that the “study” is actually a 4 page document produced by the internal research department of the Miami-Dade School District.  It has no descriptive statistics, no detailed description of the methodology, and virtually no literature review.  In short, it is extremely hard to judge the accuracy of a “study” that is little more than two graphs that have never been published, reviewed, or fully-described.

Second, the Miami-Dade internal report only claims to analyze data from the Miami-Dade School District, while our research is based on data from the entire state of Florida.  It is perfectly possible that Miami-Dade poorly implemented the policy by doing things like granting the exemptions inappropriately or failing to offer effective reading interventions for students who were retained.  Even if Miami-Dade did not have successful results with the program, the entire state did.

Third, it is inaccurate to say that the Miami-Dade “study” replicated our positive findings after two years but that those positive effects later disappeared.  Their graphs suggest that there was no positive effect of being retained in Miami-Dade 1 and 2 years after the retention decision, and then they show a positive effect in years 3 and 4, which disappears in year 5.  We found a small positive effect after one year that grew into a larger effect after two years.

Our results (even in the first two years) are completely different from those in the Miami-Dade report.  It is hard to say whether this is because they only looked at Miami-Dade while we looked at the entire state, or because they did not actually replicate our methodology.  Four pages and two graphs do not allow for a lot of nuanced analysis of the findings.

We are in the process of extending our analyses to include additional years, so we may have a better idea of whether the benefits we observed state-wide grow, shrink, or remain constant.  In the meantime, the unions have provided their research fig leaf to cover state legislators who oppose the policy regardless of what research finds.

2 Comments | social promotion | Tagged: , | Permalink
Posted by Jay P. Greene

Hoxby Offers a Free Education

February 28, 2011

Check out this video of an hour long lecture by Stanford’s Caroline Hoxby reviewing economic insights into education policy.  They say that nothing is free, but this comes darn close to a free education.  It will only cost you an hour.

Check out the part on higher education at selective universities that begins around the 40 minute mark.

3 Comments | economics | Tagged: , | Permalink
Posted by Jay P. Greene

74.2

February 25, 2011

My colleague, Bob Costrell, has an op-ed in today’s Wall Street Journal that tells you the one number you need to know to understand the dispute over collective bargaining and public employee compensation in Wisconsin.  It is 74.2.  That is how many cents the public pays Milwaukee Public School (MPS) employees for retirement and health benefits  for each dollar of salary.  The comparable figure for private sector employees is 24.3.

Bob explains exactly how benefits in Milwaukee could cost nearly as much as salary.  In short, it has to do with the fact that the public pays the employee as well as the employer contributions to the pension.  Teachers actually were given a second, additional pension by MPS.  And the public pays for the entire cost of a gold-plated health plan for current and retired employees.  All of this was obtained in collective bargaining negotiations.

Leave a Comment » | school accountability | Tagged: , , , | Permalink
Posted by Jay P. Greene

MPINO

February 24, 2011

Most people are familiar with RhINOs (Republicans in Name Only), which is a pejorative for Republican officials who differ from other Republicans on certain key issues. With a new piece in Education Next, Stuart Buck and I would like to introduce to the policy lexicon the term, MPINO — Merit Pay in Name Only.

Few merit pay programs for teachers manage to overcome union-fueled political opposition to be adopted and implemented. We estimate, based on data from Vanderbilt’s National Center for Performance Incentives, that no more than 3.5% of all districts have anything even remotely resembling merit pay.

But even the few programs that aren’t blocked are largely co-opted and diluted so that they are little more than MPINO. They tend to define merit as additional credentialing, such as paying for national board certification or simply additional degrees. The bonuses tend to be small add-ons to the traditional salary schedule based entirely on seniority and credentials. And the plans are frequently not fully implemented or quickly reversed.

The problem is that merit pay programs are trying to simulate the compensation systems that one might develop in a competitive market. But without the pressure and discipline of the market there is nothing to keep these plans sensible or permit the constant tinkering necessary to address gaming or other design weaknesses. In short, we hold out little hope for merit pay improving achievement in the absence of meaningful choice and competition given the union ability to block, dilute, or co-opt merit pay proposals.

In addition, we suggest that the most powerful form of merit pay is the concern that inadequate performance might cause one to lose one’s job. Without ending tenure and burdensome fair dismissal procedures, merit pay is unlikely to do much to change a teaching workforce that cannot lose jobs for sub-par performance.

Even if we see more programs that are called merit pay, we are unlikely to get more than MPINO. Unfortunately, this won’t even result in SAINO (Student Achievement in Name Only).

6 Comments | teacher pay, teacher quality | Permalink
Posted by Jay P. Greene

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