The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life (11 page)

A moment later, a voice over the PA system announced the school would be going into lockdown. Over the next hour, police gathered outside, questioning witnesses, while inside the schoolrooms, teachers carried on as usual. Shooting or no shooting, they still had to go over the antebellum period, pre-algebra, and paragraph structures. Could the students possibly pay attention under such circumstances?

For too many students in low-income areas of the United States, getting a decent public education is more a matter of luck than anything else. This is not only tragic but also horribly ironic, given the fact that America is one of the most prosperous countries in the world. Despite the blows delivered by the 2008 financial crisis and subsequent recession, the United States still ranks near the top in
general economic measures—life expectancy, income, the quality of medical care, and the number of technologies that make people’s routine tasks easier and more fun.

It’s no coincidence that this historic prosperity has come hand-in-hand with unprecedented achievements in education. When Thomas Jefferson advocated a public education system at the nation’s birth, the goal was for all Americans to receive a quality high school education. By the time the public education system began to take shape in the last half of the nineteenth century, US policy makers had made a winning bet on improving the country’s level of education. For decades, American primary schools were as impressive as its colleges and universities. In fact, the latter remain the envy of the world, as today thousands of non-Americans arrive at their gates to earn bachelor’s, master’s, and Ph.D. degrees.

Over the past several decades, however, the United States has developed two educational systems for precollege students: one for the haves, and one for the have-nots. Students whose parents can afford to send them to a generously endowed high school receive a well-rounded education (the haves); those who aren’t so fortunate often attend schools where shootings occur, and where half the students fail to graduate (the have-nots). Dropout rates for low-income Americans hover four to five times higher than for students from high-income families. For example, in 2008, 2 percent of high-income students dropped out, compared to 9 percent of low-income students. And dropout rates for inner-city schools often exceed 50 percent.

American taxpayers continue to pour massive resources into the public education system. The country ranks fifth in the world in per pupil spending. Despite this level of investment, the primary system has soured for many children. The average ninth grader in Chicago or New York City Public Schools reads about as well as the average third or fourth grader in better endowed school systems.
Student reading, math, and science scores in the United States have fallen below the top ten in the world. In fact, when it comes to teaching basic grammar and high school math, the United States is considered mediocre at best. The system has gotten so bad that American students’ high school graduation rates have slipped close to those of Mexico and Turkey, countries that spend far less to educate their youth.

Something is obviously very wrong with urban education in America. Many efforts to correct the problem through policy—from the 1954 Supreme Court
Brown vs. Board of Education
ruling to the No Child Left Behind legislation of 2001—have only managed to nibble away at the problem. What policy ideas are even left to try? And can money be redirected to reshape the incentives in the system to lead to better outcomes?

What Works in Education?

We began wrestling with these questions when Ron Huberman, then in his early years serving as the CEO of Chicago Public Schools (and about whom you will read more in
Chapter 8
) invited us to lunch. As we talked about ideas for curbing youth violence and teen pregnancy in the city, he told us the federal government was considering sending him millions of dollars to improve Chicago’s schools. Then he asked a simple question: “If I receive that money, what should I do with it?”

We did not have an answer. Sure, as parents of kids in the public education system ourselves, we could generally recommend spending all that money to increase training and pay for teachers. Maybe some money could go toward an after-school program here or there. Perhaps some could go toward hiring extra tutors and mentors. Some of these options had been tried, and there was evidence to show that some of them worked to improve student outcomes.

But what Huberman was after was a deeper, more holistic solution—one based on solid data that addressed the enormity of the challenges the Chicago Public Schools faced. He wanted to be sure that if he received the money from the federal government, he could uphold his promise to the city to spend it wisely. He wanted to be sure to be able to pin important observable effects to actual policies.

This was music to our ears. We reminded Huberman of how an experiment by Louis Pasteur proved the value of vaccinations. In 1882, Pasteur designated half of a group of fifty sheep as controls and vaccinated the other half. All animals then received a lethal dose of anthrax. Two days after inoculation, all of the twenty-five control sheep were dead, and all of the vaccinated sheep were alive and well, proving Pasteur’s theory. Although what Huberman had in mind was less dramatic, he easily recognized that his job was to “inoculate” inner-city kids against the deprivations of violence, ignorance, and poverty.

When studying education, economists begin by thinking about how different “inputs,” or influencing factors, combine to make certain “outputs,” or results (the jargon term for this is the “education production function”). For example, what inputs are necessary to achieve the desired output of good grades? First, we can think about the various actors involved. The effort of the student herself (one input) is obviously a critical component of the educational process, but the efforts of teachers, school administrators, and parents (other inputs) are also crucial. We also like to think about education by asking questions:
How does the combination of effort on the part of the student, the teacher, and the parent result in better student outcomes such as higher grades? What combination of inputs results in higher test scores, higher graduation rates, and good jobs? And when is increasing student, parent, and teacher effort most effective—during the pre-K years, elementary school, or high school?

You might think that by now the people who study education would have figured out the answer to these questions. After all, arguments about education have been going on since Aristotle, and America has been formally publicly educating its children for more than one hundred years. Yet the truth is that we have not systematically used field experiments in education to figure out what really works, how well it works, and why it works. In short, we have failed to use the thousands of school districts across the United States as laboratories to create an educational policy that relies on science rather than guesswork and anecdote.

The Microcosm

America is peppered with once prosperous manufacturing towns that have fallen victim to offshoring, unemployment, and, too often, despair. Driving through such towns, you will often see rusted water towers and shuttered factories just down the road from small houses with overgrown gardens and ill-repaired broken windows. Across the railroad tracks, you’ll see boarded-up stores and fore-closed homes covered with graffiti. You’ll turn off the main road and see two middle-aged men sitting on milk crates, passing the day with the help of whatever is hidden in the brown bags in each of their hands. You can’t help but think that in better times, they might have been earning a decent living at good jobs, and maybe bringing roses home to their wives.

Chicago Heights, with a population over 30,000, is a town with neighborhoods like this, and as such, it is a microcosm of the toughest educational problems in the United States. A community located thirty miles south of Chicago, it has an average per capita income well below the poverty line. If you are a child in such a community, chances are you often go to bed hungry and you and your parent or parents—or foster parent, as the case may be—live
with an incessant, gnawing, white noise of unpaid-bill stress, with all its attendant furies.

The businessman-turned-superintendent of Chicago Heights District 170, Tom Amadio, manages a system where, he notes, 50 percent of the students are Hispanic and 40 percent are African American. More than 90 percent come from poor families on food stamps; many come from foster homes; and most receive free or reduced-fee lunch. As is the case in other urban schools, roughly 50 percent of the high school students drop out before graduation, many between the ninth and tenth grades.

Amadio is a passionate, straight-talking guy with good business instincts. He may be the only school superintendent in the country who, in a previous life, was a stock trader making a good living. Unlike stereotypical Wall Street traders, though, Amadio cares deeply about the plight of the underprivileged. He rages at the kinds of people who view children from such settings as guaranteed to fail. “These are kids that people assume can’t achieve and won’t achieve,” he says. “You know what I’d like to say to people who want to keep things as they are? ‘Stick it up your ass.’ Give me the same resources that some of the wealthy districts have. Give my kids a chance to be on par.”

When he took over in 2006, Amadio told the school board in no uncertain terms that something radical had to be done in their district to close the achievement gap between poor, inner-city kids and those from wealthier districts. “I told them, ‘Listen, our test scores need help,’” he says. “‘We need to do something drastic. This is America. Our kids don’t have to drop out and grow up to be ditchdiggers. We have our obstacles, but the status quo is unacceptable.’”

Amadio’s pleas did not fall on deaf ears. A Chicago Heights orthopedic surgeon, Dr. William Payne of St. James Hospital, felt motivated to help. Dr. Payne has a deep sense of community pride.
“I’d see high school kids in my office, and I’d ask them about their dreams and aspirations,” he says. “One student’s father worked three jobs to support his family and save up enough money for his son to go to college. The son had decent grades, but his dad still didn’t have the means to send him to a good school, so the kid was stuck with a junior college that focuses on remedial education. He was too smart for that, but he didn’t have a choice because his dad didn’t really know how to go about procuring financial aid or navigating the educational system. Then I started reading about the high dropout rate in our city and wondered what could be done differently.”

Dr. Payne reached out to us in the fall of 2007, asking us to help the kids in Chicago Heights; specifically, he wanted to hear our ideas for keeping students in school. He introduced us to some important decision makers in the community and began to forge partnerships with school administration. We began with a singular goal: to improve the graduation rate among Chicago Heights high school students.

Winning the Lottery

One of the reasons we find high dropout rates so puzzling is that dropping out is like throwing away a winning lottery ticket: the data tell us that for each year of school that a student misses, his or her earning power drops by roughly 12 percent. Indeed, the average annual income for a high school dropout in 2009 was $19,540, compared to $27,380 for a high school graduate.
¹
Multiply that number by twenty years, and you see an earnings differential of $156,800. That’s a real winning lottery ticket—enough to buy a house outright in many parts of the country.

Of course, the decision is a little more complicated than choosing between dropping out and earning enough money to buy a
house, in part because the financial reward of an education isn’t realized until years later. The gratification of all that hard work is long-delayed. Most of us don’t respond well to delayed gratification; we are much more interested in immediate rewards. This is why we procrastinate, fail to save as much money as we should for retirement, eat too much, and exercise too little.

Children have this tendency in spades. Remember when you got sick as a kid, and your parents had to beg and plead with you to swallow tablespoons full of horrible-tasting medicine? You could not really appreciate the future benefit of swallowing the stuff, but you knew well the immediate cost of putting it in your mouth. That’s why pharmaceutical companies work hard to make kids’ medicine palatable. (Think of bubblegum-flavored children’s Tylenol.)

The inability to think about the benefits of future rewards gets worse as children move through adolescence. Teenagers tend to have more of this tendency than others, perhaps because of the immature wiring of their brains.
²
Put differently, teenagers may just be junkies when it comes to immediate gratification. They have no conception of the value of investing in their future. From that perspective, dropping out sometimes seems like a pretty good choice.

Compounding the issue is the fact that many parents do not appreciate the value of teaching their kids noncognitive skills—the importance of investing in their futures, of being patient and trustworthy, and of working well with others. These skills prove invaluable later in life, but most parents underestimate them.

So imagine you are a poor, pimply, hormone-addled teenager whose brain is still under construction. You are living in an inner-city area such as Chicago Heights, walking from sensation to sensation. All you are thinking about is immediate satisfaction: your life in the distant, after-high-school-graduation era is as real to you as the possibility of living on Mars. You want to satisfy your urges
now
.
Is there any way to make a connection between your current state of mind and future rewards?