Home > Economics - General > 50 per cent

50 per cent

April 28th, 2004

One of the most pleasant aspect of being a Research Fellow is guest lectures. I give guest lectures in a number of different courses, ranging over several faculties and sometimes different universities. This gives me all the things I like about teaching, including (since a change is as good as a holiday) generally attentive audiences, and a chance to present material that’s not the standard textbook, but not new or rigorous enough to justify an academic seminar. On the other hand, all the unpleasant stuff – booking rooms, litigious students complaining about their grades, administrators trying to promote customer-centric shareholder value in a dynamic enterprising university, and so on – is taken care of for me.

I tend to do most of my guest lectures around mid-semester, since this is what fits the standard course structure best, and I’ve got quite a heavy load (by my very relaxed standards) this week. I’m just between lectures, then rushing off to a seminar in town[1], but I thought I’d pass on the reaction to my lecture today on the economics higher education.

I started with the human capital and screening theories. I’m a violent partisan of human capital theory and opponent of screening theory, and didn’t try to hide this, but my success rate in convincing the students was, based on a small sample, only 50 per cent.

One student came up to me at the end and said “Thank you. I learned a lot”. Another came up to the lecturer responsible for the course and asked “Will this be on the exam?”.

fn1. For those interested, it’s The US-Australia free trade agreement: folly or our future? at a meeting of the Australian Institute for International Relations from 6-7.30pm, April 28 at 46 George Street, Brisbane. For details, contact Colin Kennard (telephone 3371 2454, email [email protected]).

Categories: Economics - General Tags:
  1. Tom Davies
    April 28th, 2004 at 19:07 | #1

    In your paper on Human Capital, I was interested by the sentence “Maglen’s attack on the human capital model has been used to justify … a switch to narrowly vocational training”.

    Wouldn’t HCT suggest that education should be narrow — no point in investing in something which won’t get used — while screening theory would see the actual subject matter taught as irrelevant?

  2. James Farrell
    April 29th, 2004 at 14:44 | #2

    Tom: I didn’t see any problem there. Everybody who does skilled work needs training one way or another, almost by definition, so it’s hard for anyone to argue against it. Therefore the real question is whether education of the more general kind has a substantial and measurable impact on GDP. If you doubt this, you will advocate a reallocation of expenditure in favour of the vocational. On the other hand, anyone who knows anything about the ‘education’ system in the Soviet Union, and its consequences, won’t doubt it.

    John: The last sentence of you paper was a huge relief. And, in addition to cultural wealth and social cohesion, we need to take into account the direct effect of education on individual utility. Imagine, for example, if you and Ken Parish had been properly educated about opera.

    By the way, John, you’re welcome to send that second student down here. I have a deep pit reserved for the likes of him.

  3. Don
    April 30th, 2004 at 19:33 | #3

    There’s something I find frustrating about the debate between proponents of the human capital and screening model – it’s the conflation of two distinct sets of positions – the position a person takes on the HCD and screening model debate, and the position they take on the size of government. There can be big government screening theorists and small government HCD theorists.

    And it’s is possible to argue that university education is CAPABLE of developing human capital but that in practice it often fails to do so. And there is nothing in the HCD model that implies that universities cannot, at the same time, serve a screening function (eg by providing a signal about a student’s level of motivation to work in a particular profession).

    More government funding to universities would not necessarily end up improving the human capital of students. It could end up employing promising researchers who have little ability (and no training) as teachers or be ploughed into bidding wars over high profile professors as part of some kind of battle for prestige. Surely what’s done with the existing level of funding matters just as much as how much is spent.

    And even if you acknowledge that univerity education does develop human capital it doesn’t follow that you will support more government funding. It may be that you’d start by arguing for more flexiblity in offering fee playing spots to Australian students, a position which could pit you against meritocratic screening theorists (who think it’s queue jumping).

  4. John Quiggin
    April 30th, 2004 at 19:54 | #4

    Some good points, Don. I agree that it’s far from certain that any particular piece of university education does any good and hard to test this. Note, however, that this makes any mixture of human capital and screening models (a common position for hard-pressed advocates of screening) impossible. If universities have a lot of trouble signalling their actual contribution, the idea that they are used as signalling devices for something else (native ability) becomes even less plausible.

    I read your point as showing that acceptance of human capital theory is not sufficient for support of government funding. But I think acceptance of screening theory is entirely inconsistent with support for public funding. If you buy screening theory, you should favor more extensive testing of high-school graduates. Even if this cost thousands of dollars per student, it would be far cheaper than university.

Comments are closed.