Undercover Economist

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.