Would more public funding for schools drive higher GDP?

It was an unusual message for this group to hear, a blend of libertarians, free-enterprisers and outright conservatives.

At its 11th annual dinner on Oct. 15, members and leaders of the Caesar Rodney Institute, Delaware’s free enterprise think tank, heard renowned Stanford economics professor Eric Hanushek of the Hoover Institution make the case that increased public funding for public education would drive Delaware GDP growth.

“Better teachers will make you richer,” Hanushek told the group of about 100 people, “and getting and keeping better teachers will cost you more!”

In a bit of governance, John R. Toedtman was named executive director of the Caesar Rodney Institute (CRI), succeeding Ron Russo, who also has headed education policy for the organization. David T. Stevenson continues in his role as policy director for energy policy, Dr. John E. Stapleford for economic policy and Dr. Chris Cascells for health-care policy. Dr. Stapleford also chairs the institute’s Board of Directors.

In economists’ chart-after-chart, and graph-after-graph, Dr. Hanushek told the story and made the case that better teachers led to better teaching, which in turn led to better educated students, which in turn led to better economic outcomes for the host community, even after accounting for labor mobility.

And getting and retaining better teachers means that they need to be paid more, as he demonstrated in performance-based measures among states.

And that will make Delaware’s Blue State policy-makers – long “in harness” with DSEA, the First State’s teachers union – applaud and celebrate.

But here’s the rest of Hanushek’s story, which will cause them just as quickly to sit back down again, but which generated cheers from the audience.

The key variable to getting better teachers is NOT to pay them for advanced degrees, or years of teaching service, which becomes irrelevant after a teacher has taught for a few years. 

Rather, it’s to put the teachers in a “pay-for-performance” system where better teachers over time are paid more and poorer teachers over time are weeded out. Given traditional standards of governance, it means to expand the charter school movement – which recently has run into tougher sledding here – or to completely reform and reinvent Delaware’s public education.

“In all our research, we found no correlation between better educational outcomes and whether a teacher had an advanced degree,” said Hanushek. “In all our research, we found no correlation between years of service – after the first few years of teaching – and better educational outcomes.”

Like many communities, most of Delaware long has anchored its teachers’ compensation on a pay scale that pays teachers more for each year they teach and for each advanced degree they get.

“Delaware is competing internationally with the rest of the world,” he said. “Delaware is not just competing with New Jersey and Pennsylvania. Delaware beats out Spain and Italy, but it’s behind Ireland. Other countries are producing students with more education and better education.”

Some of policy-makers’ prospective goals that he described could be …

• “Bring Delaware up to the best state, Minnesota.”
• “Bring Delaware up to the best in the geographic region, Virginia.”
• “Bring all students up to the basic level, equaling Canada.” 

“It’s too hard to change so we will stay with current policies,” he said. “But we have the potential for very different economic futures based on today’s actions. Improvement is possible but not easy.”

“But here are two simple lessons,” he said. “State economic growth depends on the quality of the labor force. And higher individual skills imply higher income [and adaptability].” 


Do you agree with Hanushek? Please let us know in the comments section or by sending your thoughts to [email protected].

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