Learning Capital: The Economic Idea and Causes of School Quality

In this book, the relative contributions of a school and a pupil in producing cognitive achievement growth are theoretically isolated so that the efficiency of a school can be evaluated more objectively. Using educational psychology and the neo-classical, economic method of constrained optimization, it is argued that a school is responsible for supplying a pupil with a high learning rate while the pupil’s contribution is measured by time-on-task or attention to a lesson. Two surprising inferences are drawn from this model of school quality. The most interesting result is that producing equality of achievement outcomes among pupils increases a school’s ability to offer a maximum average learning rate given any level of expenditures which contradicts present theory. A further implication is that the presumed market failure does not exist since private schools are found to be more equal than state schools. Both of these ideas are empirically supported using the High School and Beyond Data. Incorporating these results into an analysis of a voucher policy suggests that efficiency can be increased by 15% and equality of cognitive achievement by 28% without forfeiting any integration within all schools.