Mapping the Field of Economic Foundations of Education

• In Event: Educational Foundations: A Book Symposium

Abstract

Although several extensions and criticisms have been put forward, human capital theory (Becker, 1962) continues to be the cornerstone of the economics of education. The powerful idea of education as an investment good which is needed, at the micro level, for improving labor market prospects and living conditions and, at the macro level, for enhancing economic growth, has become deeply rooted in the way we think about educational issues.
It is no exaggeration to claim that the economics of education is currently living a golden age. The expansion of the discipline has not only been quantitative, but also qualitative. This presentation reviews its recent evolution and discusses some of the current and possible future developments.
During the first two decades of the 2000s, major efforts were made in the analysis of the education production function and in understanding the effectiveness of educational policies (Hanushek & Woessmann, 20212). Education economists have unveiled that individual, family and school level characteristics affect academic performance. The development of international large-scale assessments was an inflection point in terms of international comparability. Measuring the impact of these factors and policies has led to the development of new tools. Theoretically, experiments may provide the neatest estimations. There are however budgetary and ethical issues which restrict the possibility of applying them on a large scale. Therefore, economists have developed increasingly sophisticated quasi-experimental techniques (Schlotter et al., 2011).
A great deal of effort has been put into assessing the effectiveness of determinants of education and policies. This does not mean that education economists have forgotten their initial interest in assessing the efficiency of policies. Studies assessing the internal efficiency of the educational system have often applied, besides the parametric analysis of the educational production function, non-parametric techniques such as data envelopment analyses and value-added models. The efficiency vs equity debate has become dated as evidence shows that the most efficient educational systems are usually the most equitable too.
Regarding the external efficiency of the educational system, education and labor economists continue to assess the monetary and non-monetary returns to education (Lochner, 2020; Psacharopoulos & Patrinos, 2019).
The expansion of this discipline has been closely linked to the development of econometric techniques, the availability of computational power and rich databases and its hybrid and interdisciplinary nature. All this gives the economics of education an expansive propensity, and the rapid shifts introduced in the education systems, in their attempt to answer to the new socioeconomic challenges. Following this logic, we may identify some topics where education economists are likely to focus their attention in the near future. Identifying which cognitive and non-cognitive skills are needed to successfully tackle the 4.0 Industrial Revolution; measuring the impact of technological developments; evaluating the effects of the destruction of jobs for low-skilled workers; improving the design and understanding of lifelong learning processes; identifying the heterogeneous impacts of educational policies; assessing new forms of education provision; or extending the use of experimental techniques will probably be among these topics.

Author

• Álvaro Choi, Fundació Bosch i Gimpera CIF G08906653