Ben Bernanke's Speech on Education and Economic Competitiveness

Lifelong Learning Can Help Us Meet Economic Challenges
In the past, the U.S. education system has responded to the needs of a changing economy, and I believe that as we address such challenges as the retirement of the baby-boom generation, advancing technology, and globalization, our education system will again make an important contribution to the adjustment process.  That means, of course, that we will have to grapple with difficult issues--how to boost educational attainment, particularly for minorities and immigrant youths; how to make more consistent and noticeable progress in raising academic achievement; and how to ensure that older workers have meaningful opportunities to refresh their skills.

What can be done so that our educational system will continue to play a significant role in supporting economic change?  In broad terms, we must begin by recognizing that learning is a lifelong process and that we have opportunities to improve education at every point along the way.  Many of these opportunities lie outside the traditional route of a kindergarten-through-twelfth-grade education followed by four years of college.  I’d like to comment briefly on what economists have found about the benefits of educational investments at different points in the life cycle.

Early Childhood Education
Building the foundation for lifelong learning from the earliest ages is crucial (Heckman, Stixrud, and Urzua, 2006).  Research suggests that the home environment is especially important and that children who start behind find catching up increasingly difficult (Heckman and Masterov, 2007).  Thus, the payoff from high-quality pre-school and home visitation programs is likely very high, especially for children born into poor or otherwise disadvantaged families.  Recent research--some sponsored by the Federal Reserve Bank of Minneapolis in collaboration with the University of Minnesota--has documented high returns from early childhood programs in terms of subsequent educational attainment and in lower rates of social problems, such as crime, teenage pregnancy, and welfare dependency (Burr and Grunewald, 2006).5  But early childhood education is only the beginning.  Positive results from programs such as Head Start dissipate without further high-quality schooling at the elementary and secondary levels (Garces, Thomas, and Currie, 2002).

Elementary and Secondary Schooling
Deciding what and how to teach students from kindergarten through high school and then evaluating our schools’ effectiveness in preparing students for the workforce and a lifetime of learning is a daunting task.  I will make only a few observations on the goals we should keep in mind as we explore ways to improve learning at the elementary and secondary levels. 

First, we should encourage experimentation and innovation.  By my reading, the research on K-12 education has, to date, yielded no easy answers to the questions of how to raise academic achievement and how to ensure that students finish high school well prepared to move on to more advanced study.  A wide range of approaches has been and is being explored:  smaller class size, school choice, charter school programs, accountability standards, flexibility in teacher certification rules, better teacher pay, merit-based pay, year-round schooling--the list is long and probably will get longer.  The size and diversity of our country, together with the fact that state and local policymakers retain significant discretion over how to structure their educational systems, provides us a natural laboratory for assessing the effectiveness of alternative educational strategies.  I view the debate about what works and what doesn’t to be a crucial part of discovering cost-effective ways to improve our educational system.

The business community has an obvious interest in how well our schools prepare students for a future in the workforce and should actively participate in the debate.  But we all have a stake.  Students at the elementary and secondary levels are being prepared not just for work but for life.  Such skills and acquired traits as critical and creative thinking, social ability, persistence, and satisfaction in accomplishment make not only good employees but good citizens as well.  Exposure to the arts and culture and experience in serving the community can help support the development of these broader, harder-to-measure skills, alongside more readily measurable cognitive accomplishments in reading, math, and science.  

Second, teacher quality is critical.  Studies show that student performance depends on putting high-quality teachers in the classroom and retaining them as long as possible (Aaronson, Barrow, and Sander, 2007; Rivkin, Hanushek, and Kain, 2005; Rockoff, 2004).  Indeed, many initiatives focus on linking students, especially disadvantaged students, with high-quality schools staffed by high-quality teachers.  High-quality teachers instill in their young students a desire to stay in school and seek more education later in life, and the evidence suggests that the quality of teaching might have the biggest impact on lower-ability students (Murnane and Steele, 2007; Clotfelter and others, 2006; Hanushek, Kain, and Rivkin, 2004).  Unfortunately, our most disadvantaged communities, the ones most troubled by high dropout rates, have difficulty attracting and keeping qualified teachers.

We must instill a desire among students to stay in school and to seek more education and training over their working lives.  Our elementary and secondary schools must provide students a strong foundation for a life of learning.  Although a wide range of remedial education programs exist, research suggests that they are more costly and less effective than a solid, sustained course of study through high school.  In particular, government training programs for disadvantaged youth have a rather disappointing reputation, particularly those that are less intensive and not well tied to labor market needs (Martin and Grubb, 2001; Heckman, LaLonde, and Smith, 1999).

A number of possibilities for improving the education of disadvantaged students seem worth exploring.  For example, several experiments suggest that smaller schools and smaller classes may help disadvantaged students (although the benefits of such programs for the general student population remain controversial).  Supplemental education, including after-school and mentoring programs such as Big Brothers Big Sisters, have been shown to boost school attendance (Grossman and Tierney, 1998).  Increasing school time--either through longer school hours or summer school--also has found some support (Jacob and Lefgren, 2004). 

CONTINUED

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