David R. Henderson  

Robert Frank's Narrow View on Schools

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When I posted on Facebook a link to my recent blog post and book review [scroll down to the third page] of Robert Frank's latest book, a George Mason University economist friend wrote, "David, your critique is spot on, but he [Frank] won't engage them, nor will his views reflect them in five years." So far, this friend is right. Of course, five years isn't close to being up yet but Robert Frank has certainly not engaged. And his op/ed in the New York Times today shows no evidence that he has reconsidered one of his most tenuous bits of thinking.

In his NYT op/ed today, he writes:

Why do many middle-class families now struggle to get by on two paychecks, whereas most got by on just one back in the 1950s and '60s?

The answer, according to "The Two-Income Trap," by Elizabeth Warren and Amelia Warren Tyagi, is that many second paychecks today go toward financing a largely fruitless bidding war for homes in good school districts.

Parents naturally want to send their kids to good schools. But quality is relative. Because the best schools tend to be those serving expensive neighborhoods, parents must outbid 50 percent of other parents with the same goal just to send their children to a school of average quality.


Here's what I wrote in my review about two other solutions to the problem. He seems not to have considered either:
Why do people have to buy nice houses to get nice schools? It's because government provides schools. Governments insist, with few exceptions, that the only people allowed to attend schools in a school district are the children who live in that district. Private schools, by contrast, rarely discriminate geographically. A straightforward way to get around this wasteful competition for houses in nice school districts is to get government out of the business of providing schools. But Frank does not consider that option.

Frank states that "school quality is an inherently relative concept." In other words, what matters to parents, according to Frank, is not the absolute quality of the school, but how good it is relative to other schools. But if that's so, then one obvious way to save resources, so that people can have more non-positional goods, is for the government to spend less on schools. Just as a progressive consumption tax would, in Frank's view, make no rich people worse off, a 50 percent cut in school funding should make no students worse off. Yet Frank never considers cutting government spending on schools.



COMMENTS (38 to date)
Andrew writes:

But even if government got out of schooling, wouldn't parents uselessly bid up the price of private school tuition?

David R. Henderson writes:

@Andrew,
Only if the supply curve were vertical. If there’s any elasticity to the supply curve at all, an increase in price would not be useless: it would draw more schools and slots into the schooling industry.

Finch writes:

> Only if the supply curve were vertical. If
> there’s any elasticity to the supply curve at
> all, an increase in price would not be useless:
> it would draw more schools and slots into the
> schooling industry.

While I'm sympathetic to your overall point, I don't follow this.

There's already a fair amount of price competition. Relative standards drive towns to increase their investment in schooling today, just as they'd drive new entrants in your hypothetical world. What's the difference? Towns compete today, standalone schools would compete in your world. Seems slightly more direct, but not qualitatively different. In my town property values flow directly to property taxes, which flow directly to the town budget, which flows directly to the schools. Houses here are roughly $300k more than otherwise-equivalent properties two towns over, almost entirely because of schools. They're public schools in name only.

It's possible that places with county government dilute this effect, but I'm not so familiar with those systems.

Frank's assumption is that relative and not absolute standards apply. Assuming relative and not absolute standards apply, increasing competition and causing innovation and new entrants is not actually helping. If you want to help "society," you want to lower the concern people have about the relative and increase the concern about the absolute. I've no idea how to do that.

John V writes:

Social Democratic thinking...like that of Frank...is so simplistic, dim and one dimensional that I can't even pay attention to it anymore. Social Dems bother me so much more than Conservatives precisely because they seem to have similar aims as a libertarian like me BUT the problem is that the base assumptions and starting point of analysis for their ideas are horribly misguided and wrong.

The education conundrum is one vivid example of this dimness as you so clearly explain.

Justin writes:

Finch is correct. The supply curve for schools is going to be roughly comparable to the supply curve for houses. Abolishing public wouldn't help and it might make things worse. Parents might be driven to living in small apartments in bad neighborhoods to keep little Johnie in all the best private schools.

I think free market libertarians would be well served by reading some ev psych. They really haven't wrapped their heads around the massive demands of sexual competition.

joeftansey writes:

Couple of points,

First, technically you don't have to get government out of schooling. You just have to get government to restructure such that geography no longer determines school choices. There are several ways to do this, from vouchers to full federalization.

Therefore Frank is not considering a whole bunch of very well known options... Suspicious!

Second, if parents really only care about the relative quality of schooling, and that's why they'll always bid up prices to require two incomes, then isn't this their own fault for having such a horrible value system?

These kinds of theories make me feel less sorry for the middle class, which is probably not what their originators intended. That's what happens when you take "the plight of the middle class" as axiomatic.

Justin writes:

Just a quick followup and restatement.

1.The demands of positioning one's offspring on the sexual marketplace are relative, not absolute. And it is very important and inelastic.

2. Thus parents will willingly devote a very high percentage of their resources into positioning their children on the sexual marketplace, including good schools.

3. If that bidding goes through buying houses, then parents will bid up houses. If houses as a middlemen are eliminated, then parents will bid up the cost of schools directly. In fact, getting rid of government schools may make the arms race even more severe, in that parents may sacrifice on housing quality in order to pay for education. At least now the government forces parents to get some decent fundamentals out of it - safe neighborhoods and high quality houses.

Robin Hanson and Tyler Cowen are two quasi-libertarian who have integrated social status and signaling into their world views, but most libertarians, including Henderson, have not. And thus I have to conclude that it is Henderson with the narrow and inflexible worldview.

Brandon Berg writes:

Frank is right, in a sense. The primary driver of school quality seems to be student quality, and student quality correlates strongly with parental income, because children tend to inherit the characteristics that make their parents rich or poor.

Speaking broadly, good schools are the ones that poor parents can't afford to send their children to, and they're good for precisely that reason.

Granted that this is a very blunt instrument. Academic tracking and aggressive expulsion of problem students would probably do the job much better. But these solutions are politically infeasible because of the racially disparate impact they would have.

Finch writes:

Justin,

I'd accept the sexual marketplace argument as plausible if people who went to better schools or earned more money, and thereby ostensibly earned "better" spouses, actually had more children.

As it is, it seems that pursuit of quality schools and additional money and power is self-defeating from a reproductive point of view. This might be changing, but it will take time to tell.

joeftansey writes:

Maybe people want to go to good colleges/sexual marketplaces for ego issues.

Again, this avenue seems more to indict the values of the middle+ class than the system itself.

Justin writes:

Hi Finch,

Evolutionary psych is pretty similar to economics. Milton Freidman pointed out that pool players aren't working with physics models, but that they are acting "as if" they do in order to defend the rationality of consumers. The "as if" reasoning applies to the sexual marketplace. People have an innate drive for power, status, and sex. As a general rule that translates to having more children and higher quality children, but not in the novel evolutionary environment of a world with the birth control pill.

Finch writes:

I'd agree that it seems like our brains aren't well designed for modern America with its unprecedented wealth and magical technology. And I think there are elements of truth in your story. We make sacrifices for sex with condoms. We give welfare to obese people. We have 2.0 children. These things seem pretty crazy, long-term.

But your story requires believing apparently smart people are really quite stupid. Women who pursue PhDs. Anyone who goes to MIT or Harvard when they could have gone to UNC. Lawyers. It suggests IQ is way overrated as a figure of merit.

You might be right, but it's a strong claim, and it requires strong evidence, which I haven't seen. It also doesn't mesh all that well with the fact that the demographic transition largely proceeded good birth control, so a big part of the change is not due to the pill. Also, I think it's an exaggeration to suggest this is a well-accepted conclusion of evolutionary psychology.

Justin writes:

Hi Finch,

But your story requires believing apparently smart people are really quite stupid. Women who pursue PhDs. Anyone who goes to MIT or Harvard when they could have gone to UNC. Lawyers. It suggests IQ is way overrated as a figure of merit.

This is a good discussion, but I think you are looking at education too narrowly - in terms of viewing schools like Harvard as ways to learn career skills. Rather, they are certifications of IQ and their primary purpose is not to prepare their students for a career, but for the marriage market. As you suggest, if all you want is a well paying career then UNC makes a lot more sense. But if you want what Robin Hanson calls a shallow signal of intelligence, then you can't beat Harvard. In that light, I'm placing a much higher value on IQ, or at least shallow signals of IQ, than you are.

Vadim writes:

I personally hate it when evolutionary arguments are brought out to disparage other peoples consumption preferences.

Preferences are what they are, and your personal ones are no better or worse than anyone else's.

Finch writes:

I meant that going to Harvard is a bad marriage market choice when compared with UNC, probably for both men and women. Going there quite likely means a reduction in expected number of descendents, not an increase. So if parents are secretly looking out for their children's marriage market interests, they're doing a lousy job of it when they encourage Harvard.

They ought to tell their children to ease off the studying and maybe pick up a sport. They ought to seek lower IQ peer groups, as IQ seems maladaptive by your theory.

And back to the original post, they ought to avoid elite towns and elite schools in general.

Vadim writes:

@Finch

I meant that going to Harvard is a bad marriage market choice when compared with UNC, probably for both men and women. Going there quite likely means a reduction in expected number of descendents, not an increase.

Maybe, or maybe not. How can we know for sure for any given person? Let's let natural selection sort all that out. In the meantime, we shouldn't ever question peoples personal choices against some evolutionary rubric.

Justin writes:

Hi Fitch,

But your story requires believing apparently smart people are really quite stupid.

Only if you define stupid as "does not maximize one's expected offspring." People have innate preferences for social status and power. What life course will do the best job of satisfying those preferences? (A) Going to Harvard and generally chasing certifications, or (B) going to UNC, marrying young, and having lots of kids?

Clearly option A is the most effective way for them to fulfill their preferences, not B. So I disagree with your contention that smart people do dumb things. Rather, we live in an evolutionary novel world.

Finch writes:

Fine, Vadim, on average it's a bad choice. (I am making a big assumption here - my evidence for low Harvard birth rates is anecdotal combined with broader evidence for low birth rates for the more educated.)

It's possible those parents think they know their own kids well and have figured out that they'll outperform the median Harvard grad. But if so, in aggregate they're wrong.

Is your problem that I am presenting having more descendents as desirable? Personal opinions aside, I'm just working in Justin's framework - that school choice is really a secret marriage market choice. I am expressing doubts about that framework, though admittedly, I don't completely reject it.

Vadim writes:

Finch, I just think its the height of hubris to use evolution to question other's choices. Economics in general doesn't make value judgments on personal preferences and rightly so.

Is your problem that I am presenting having more descendents as desirable?

Maybe it is more desirable, or maybe it's better to have less descendants of higher quality. We really cannot know. That's why it takes incredible hubris to make such arguments.

Steve's disiple writes:

A few things

1. The question to me seems to be why this competition has become more fierce?
2. Are the Returns to education much greater than they were 25, 30, 40 years ago?
3. Have bad schools gotten worse, what caused that?

4.. Another thing this competition doesn't exist everywhere, its mostly in the cities and on the coasts? Why is that? What is different about those populations?

Some Thoughts:
1. Poor white kids do better in school than wealthy hispanic or wealthy black kids.
2. Schools full of poor white kids were never that awful. When I was a kid I went to one. Since there was no disprete impact no one much cared about tracking, and tracking was pervasive. My neighborhood was lower middle class, but plenty of wealthier people lived there for convenience, doctors who had offices in their homes, store owners, etc... All their kids went to school with me and my poorer friends.
3. Parents understood these facts and fought hard against busing, partially because of racism, but also because people who live near our less conscientious citizens have to deal with realities of their behavior, and want to protect their children.
4. America has grown much more diverse in the last 30 years. This wasteful bidding up of housing prices only happens in diverse areas. This is connected and its not racism of the wealthy that is driving that connection.

Finch writes:

Vadim, to the extent that I understand your point - that it is morally wrong to think about people's decisions having consequences for the number of children they'll have - well, I guess I disagree.

I don't think I said anything about values. I didn't mean to. I criticized a strategy Justin proposed for its efficacy in implementing goals he proposed. I said that efficacy criticism made me doubt it's what people are really doing.

People say they make education decisions so they can have fulfilling and remunerative careers, not so they can get better spouses (in an evolutionary sense) as Justin proposed. The effect of their decisions seems to be that they get better careers, but not better spouses. Therefore I conclude they really are trying to get better careers, just as they say.

Ken B writes:

Well I do not accept his premise -- that the school competition is the reason for the two incomes etc -- but even granting his notion that so much is spent on 'positional goods' does not mean that everyone involved loses. I might be more interested in a different good -- even a different 'positional good' whose price is lower because the poor surgeons down the road have spent so much getting into the school catchment they prefer.

GiT writes:

I'm not really sure why this post criticizes Frank's proposed solutions when he doesn't propose any solutions in his NYT piece. He certainly proposed a solution in his book; it's not mentioned in the NYT article.

The NYT article merely describes a problem; a problem it appears as if Henderson agrees exists, since he is offering solutions for it. Frank however, offers no solutions in the NYT.

So it's rather mysterious why Henderson writes that Frank shows no evidence of having reconsidered possible solutions in the NYT article. The NYT article shows consideration of no solutions, which implies nothing in particular about his opinion of either his previously proposed solutions or solutions proposed by others.

mattmc writes:

I am mostly with Brandon Berg on this, people actually can't tell what are good schools without longitudinal data, and just search for the schools for the best students. Frank is obviously of the deluded type of thinking that concludes schools that seem better because they have better students would be better schools without the better students.

The two-income trap is basically nonsense, but will continue as long as we are forced to pretend that all students are of the same ability- even when some of them arrive at kindergarten reading novels and some have never seen a book.

Justin writes:

I think my last comment got lost in the moderating ether. I sent it yesterday, so I'm going to assume that it got lost. If not, then please forgive the double post.

But your story requires believing apparently smart people are really quite stupid.

But again, people have an innate drive for social status, power, and sex. People who succeed in the first two things have historically tended to have more children than those who do poorly. It's only in the novel evolutionary environment of a world with the birth control pill that things have changed.

Option A: satisfy your preferences
Option B: don't satisfy your preferences, because you have an intellectual belief that the only point of having preferences is to have more offspring.

I don't think it's stupid to go for option A!

Glen S. McGhee writes:

"Why do many middle-class families now struggle to get by on two paychecks, whereas most got by on just one back in the 1950s and '60s? The answer, according to The Two-Income Trap by Elizabeth Warren and Amelia Warren Tyagi, is that many second paychecks today go toward financing a largely fruitless bidding war for homes in good school districts."

This insight is giving me nightmares, literally.

Bidding wars are not limited to just McMansions, but apply to virtually everything since WW2.

Khrushchev was right, not Nixon. Consumer expansion occurs at the upper levels, just as wealth stratification. Think of the accumulation of useless advanced degrees in the same way, in terms of status competition, and suddenly all this expansion looks more like a house of cards.

At the end of WW2, housing was limited to Levitown, and only Cadillac occupied the upper reaches of the consumer hierarchy. Life was simple, comparatively speaking. Consumption choices were limited to nylons, Life magazine, and cigarettes.

This is what gives me nightmares. Stratification changes are now only in the upper reaches of post-WW2 consumer choice, what used to be considered luxury items. Veblen, right?

This suggests that "innovation" isn't only about collective benefit (cell phones are a good example -- they are replacing cigarettes, something you hold in your hand -- without which, you run the risk of looking naked; cigarettes themselves were a major pre-WW2 innovation).

No wonder it is so hard to pin down "below the poverty line". Poverty is a social construction, constructed by statisticians, policy makers, liberals and conservatives, and people themselves. But the whole edifice is in flux, morphing upward, adding more and more kibble all the time.

OH Libertarian writes:

One point that all seem to miss is that while most state constitutions require the provision of education, an underlying assumption is that the state must be the owner of the schools and support systems as well.

This is simply not true. As long as the states fund education (to the degree their constitutions require), the entire physical system can be privatized.

e.g. the federal GI Bill had no constraints on its use regarding public or private colleges/trade schools. State and local funding should be voucherized. Parents, to the degree they wish, should be allowed to self-fund as needed to purchase education from higher end schools. This is no different than varying price levels for cars, houses, medical care, restaurant food,etc

Privatizing all schools (and support services such as busing and maintenance) will introduce much needed competition that exists at the collegiate and tech school level into the elementary/middle/high school levels.

James McClure writes:

Frank's error in this as in many cases is an old one: He has a hammer and he is going to damn well use it. People do care about relative standing, but that is not all they care about. The burden is on those who assert that relative standing solely drives this or that to persuade that absolute levels of this or that do not matter. Frank does not do this, he merely asserts that relative standing is what counts and moves on; anyone who disagrees is not worth engaging. This is sophistry.

Seth writes:

"...that many second paychecks today go toward financing a largely fruitless bidding war for homes in good school districts."

Even if the bidding war/"two-income trap" link is true, why is it 'largely fruitless'? It seems like its self-evident that it largely bears fruit, otherwise the bidding war or the two-income trap would not exist.

Tom West writes:
Thus parents will willingly devote a very high percentage of their resources into positioning their children on the sexual marketplace, including good schools.

Well, in this neck of the woods, all the top tier private schools for both boys and girls are unisex.

So much for placing your children in the sexual marketplace :-).

Tom West writes:

The biggest problem with any widespread privatization of education is that

(1) it will likely increase the educational stratification between layers of society and

(2) lay bare the fact that there exists a small but significant section of modern society that cannot be effectively educated due to lack of inclination, poor home environment, lack of intellectual ability, etc.

I don't think that society is particularly ready to handle either of these at this time.

Justin writes:
Well, in this neck of the woods, all the top tier private schools for both boys and girls are unisex.

I'm assuming that this comment is tongue-in-cheek, but it did get me thinking that perhaps single sex education and discriminating against women was efficiency enhancing. Social norms against female education meant that the status-seeking arms race was cut in half because only boys participated.

Tom West writes:

it did get me thinking that perhaps single sex education and discriminating against women was efficiency enhancing.

Well, I have to say that I disagree with your thesis, since we're talking about high schools and most of the parents I know would be perfectly happy if their children stayed out of the boy/girl game altogether during that time. (Mostly because they thought it deleterious to educational outcomes and likely their child's happiness (especially for girls).

More to the point, I'd say that most parents choose single sex schools because they believe it achieves higher educational outcomes, *especially for girls*.

Status may play a role, but I think you're pushing it *way* too far to explain parental behaviour with regard to high schools (I'm from Canada, so the bizarre American elite university system may well have different rules.)

Justin writes:

Hi Tom,

I'm talking about single sex schools back in the 50's, when the quality was unequal. In today's time, single sex schools can also be part of the marriage market game. Parents don't send their children to high status schools so that they'll get married young (they hope the opposite, wisely), but to get them on the path that leads to Harvard.

eric writes:

As a school teacher, let me say that I don't think the "schools" are the real issue, because the quality of the school is much less important than--or are almost wholly determined by--the student population. What Frank is really talking about is the peer group. Parents today are increasingly worried about schools because they want their kids to be hanging out with and going to school with kids who will be among the winners in our very unequal society. In that sense, quality is relative--AND, the key thing that Frank doesn't always make clear: the relativity is even more important as our society becomes more unequal. In a society that more equal, parents would be more free to care about what kind of education their kids got, because they wouldn't be so afraid of falling behind. My students are all incredibly anxious about getting into the right colleges, largely, I think, because they feel, rightly or wrongly, vulnerable to a fall from their privileged position. I remember hearing a multimillionaire father telling his highly stressed daughter that she had to work very hard, because the competition was intense, and the country was full of poor people, and he didn't want her to end up poor. I wondered whether he would count me (with my fancy college degree) as poor...

Anyway, I wonder if privatizing education would just allow the sorting by class to be more explicit!

Glen S. McGhee writes:

Seth wrote:

Even if the bidding war/"two-income trap" link is true, why is it 'largely fruitless'? It seems like its self-evident that it largely bears fruit, otherwise the bidding war or the two-income trap would not exist.

Comment: Yes, fruitless, because you are talking about McMansions, SUVs, Lexus, and conspicuous consumption, whose value is ceremonial and not instrumental (Veblen).

Steve's disciple wrote:

1. The question to me seems to be why this competition has become more fierce?
2. Are the Returns to education much greater than they were 25, 30, 40 years ago?

Comment: Good question. Stratification of markets at the upper levels. For cultural reasons that have nothing to do with ROI.
A good example is law school. http://www.nalp.org/2008jansalaries

Tom West writes:

As a Canadian, I have to ask - is the American obsession with elite universities a fabrication built on insecurity or is their some basis for this monomania? (Or is the obsession massively overblown by blogs/magazines?)

I understand that if you want to be part of the 0.01%, then Harvard, etc. are probably necessary to build the appropriate social network, but is an elite university education really a near necessity to be doing well (top 10-20%)?

I can't really believe it, but at least from the blogs, you get the impression that many/most American parents believe that it's impossible to do well unless you attend an elite university. Is this really the case?

Aggie writes:

The system we call education actually has nothing to do with education. Formal schooling in institutions, both public and private, is designed to sort children into winners and losers. There has been little innovation in learning or teaching for at least 100 years.

If parents would take the blinders off, they would realize that the best way to promote their children's intellectual and social development would be to teach them themselves.

One of the worst aspects of formal schooling is compulsory attendance. Compulsory attendance is why schools, and the society they promote, resemble the kind of social behavior seen in prisons.

Read some of John Holt's books, including How Children Learn and How Children Fail.

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