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Education: An Inferior Good?

By Chris | March 16, 2009

Last week, Obama spoke about education and argued that American children don’t go to school long enough.  He said:

We can no longer afford an academic calendar designed for when America was a nation of farmers who needed their children at home plowing the land at the end of each day. Our children…spend over a month less in school than children in South Korea — every year. That’s no way to prepare them for a 21st century economy. That’s why I’m calling for us…to rethink the school day to incorporate more time – whether during the summer or through expanded-day programs for children who need it.

I have to give credit to Obama for advancing a clearly unpopular idea, but I don’t think he is right. Thinking back to my childhood –summers building forts in my backyard, learning HTML, visiting my grandpa’s ranch in Montana– made me hesitant to get behind reform that would cut into the next generation’s time to be a kid.

Each generation our nation is getting wealthier and wealthier.  The scientific and technological advances of the last fifty years not only make us materially better off, but increase the returns to getting a higher education.  A surgeon today can do things that would have unthinkable 20 years ago.  Computers have made professionals from economists to engineers substantially more productive.

What is the rational response?  You might argue that education is more valuable, so students should purchase more education.  But, we don’t live to maximize our wealth.  People value leisure.  Research shows that doctors will actually start decreasing the hours they work when their wage gets high enough.  Leisure is a normal good.  The more money you have, the more leisure you wish to consume.  At a certain point the dollar value of an additional hour of leisure exceeds your hourly wage.

Similarly, education is a substitute for leisure when people are young. Do we want to trade our children’s free time for a little more money when they are older?  Maybe, but the answer isn’t obvious.  Looking back, I wouldn’t have wanted to spend 20 percent more time in school.  If I had, I might be better at math, but I would have missed out on a lot of memories.  At some point, a nation becomes so rich that the benefits of a little more free time as a child outweigh a little more money in increasingly prosperous future.

Of course, such a future is far from certain, particularly for certain subsets of our population.  Certainly, kids with dysfunctional families have a less rosy view of free time.  For others though, time outside of a structured environment is not only fun, but essential to foster creativity and independence.  It seems that the best policy would be to expand school hours the most where the opportunity cost of leisure is the smallest.  Hopefully, this is what Obama has in mind when he says that this aspect of reform is targeted for “those children who need it.”

Topics: Economics, Education, Political Science | 10 Comments »

10 Responses to “Education: An Inferior Good?”

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