Why education fails the poor
Students took to the streets of London last month to protest against a stiff increase in course fees.
I can hardly blame them, but the fee increase is not the great injustice that they claim. In one sense it is unfair, of course: earlier generations of students paid less. Some paid nothing at all. My Oxford education was free – as was that of David Cameron, who did the same course in the same college less than a decade before me – and I am grateful.
But was that free education an example of great social progress? Cameron’s family was hardly poor. He did well enough out of his Oxford education. Is it really outrageous to suggest that he, rather than taxpayers, should have paid for some of it?
And while the percentage of under-thirties attending university rose from 5 per cent to 35 per cent between 1960 and 2000 – with a surge during the early 1990s – it is still the preserve of relatively wealthy families. According to the economists Jo Blanden (University of Surrey and LSE) and Steve Machin (LSE and UCL) this expansion actually widened the participation gap between richer and poorer children. (To oversimplify, only kids from well-off families go to university, but whereas it was once just the bright boys, now the girls and the dim boys also get to go.)
In short, a university education is a valuable product, largely consumed by the sons and daughters of well-off families, which plays a major role in ensuring that the sons and daughters are themselves well off – and, helps them to marry each other. This is the perk that students demand that the taxpayer should provide.
Of course, raising fees will discourage students a little. My reading of a recent study, commissioned by the Department for Business Innovation and Skills and conducted by researchers from the Institute for Fiscal Studies and the Institute for Education, is that adding an extra £5,000 of annual tuition fees, and funding that with an extra £5,000 of cheap loans, would dent higher education participation by about 6 percentage points. That is bad news (and subject to a high margin of error). But regressive? No.
If you want something to get angry about, I wouldn’t look at tuition fees. I’d look at a little graph produced by Leon Feinstein of the Institute for Education, which shows tests of cognitive development given to almost 2,500 children at the age of 22 months, 42 months, five years and 10 years. The very brightest 22-month-old working-class kids were inexorably overhauled by the very dimmest children of professional or managerial parents – apparently by the age of about seven, and emphatically by the age of 10.
Research by Jo Blanden and by Paul Gregg and Lindsey Macmillan of the University of Bristol, underlines this. We know that “income persistence” is high in the UK – that is, parents wealthier than average have kids who also grow up to be wealthier. In other words, social mobility is low. We also know that education seems to play a strong role in this: countries such as Denmark have egalitarian schools and low income persistence. Blanden, Gregg and Macmillan have found that you can predict much of this income persistence simply by looking at exam results at age 16. Higher education is the icing on the cake.
The real problem in British education starts very early indeed. Subsidising tuition fees for relatively prosperous students is not the solution. Subsidising poorer kids to stay on at school after 16 might help – although even that is too late for many – but this is a policy which the coalition government is set to scrap. It’s the three- and four-year-olds from poor families who have for decades been let down by this country’s education system. But toddlers don’t take to the streets in protest, no matter how right their cause might be.
Also published at ft.com.
5 Comments
Pete says:
“Cameron’s family was hardly poor. He did well enough out of his Oxford education. Is it really outrageous to suggest that he, rather than taxpayers, should have paid for some of it?”
Tim, you’ve missed the point. Cameron should be paying for his education, indeed many times over, through a significantly higher rate of income tax and capital gains tax.
The notion that using income tax to fund HE has to mean that this comes from the poor is to totally misrepresent a progressive income tax system. Use income tax, and make sure that no-one earning under £25k ends up paying anything from their income tax towards HE. There will still be plenty enough.
11th of December, 2010Robert says:
Shouldn’t we be looking at the marginal effect of raising the tuition fees? Couldn’t it be that most of that estimated 6% who don’t go to university will be from those who are more poor, thus making the system even more biased towards the well-off?
It seems to me that a fair system would be one that ‘taxes’ the incomes of those who attend college to pay for their education. You could simply say that the students who attended, say, Oxford in 2010, collectively owe a certain sum, which will be collected in the form of an N% surcharge on their income until the debt is repayed with interest. Thus, university still remains free of upfront costs, and presumably the surcharge is less than graduates’ increased earning power. Because the possibility of default is efectively eliminated by the pooling (barring economic catastrophe), the interest rate can be almost as low as that at which the government borrows.
11th of December, 2010Ruben says:
If the point of the article was to highlight the deficiencies in the primary and secondary education in the UK there was no need to write nonsense about university education. I say nonsense because that is the only way you can classify passages like:
12th of December, 2010“In short, a university education is a valuable product, largely consumed by the sons and daughters of well-off families, which plays a major role in ensuring that the sons and daughters are themselves well off – and, helps them to marry each other. This is the perk that students demand that the taxpayer should provide”.
Maybe if you look outside Oxford you will understand the real value of university education. There are many sons and daughters of middle-class families that prospered thanks in great part to university education. They prospered and they made their country prosper. What demonstrators are saying is: “there is a positive externality in university education, so fund part of it”.
Brendon says:
good to see this point (the first one) being made; I’ve been wittering on about the same thing for the past few weeks, and have gotten several bad looks from people misconstruing me to be an evil tory.
In terms of thinking about the relative progressiveness of the current (pay-up-front) and future (pay-later) funding schemes, I haven’t seen too much written about the fact that wealthier individuals are more mobile, and hence more likely to migrate (internationally) post-university and not pay their fees. It may even give individuals (ex-post) incentives to do so. This makes the future scheme relatively more regressive, as the wealthier will have a lower (ex-ante) expected cost of university, hence the marginal tim-nice(/loaded)-but-dim will be more likely to attend university than his working class marginal counterpart.
12th of December, 2010Alastair Lindsay says:
A very thought provoking article. It is dreadful to encourage young people to take on a massive debt when the employment prospects are uncertain to say the least. Why has successive governments strived to increase the percentage of school leavers to go to univ ersity? What is the purpose of a university education? I was brought up in a council house and was fortunate to go to a fine local school and then on to my local university as most of friends did in those days. It helped me to get a good interesting job and led to a satisfying working life. It did not make me rich however and my university friends did not become rich either. In fact the most successful of my chums did not go to the university. He joined a chartered accountancy firm and studied in the evenings to become a chartered accountant. I am still not sure what benefits accrue from a university education. Tony Blair, Gordon Brown and Margaret Thatcher all went to university and they amply demonstrated how thick they could be.
14th of December, 2010