Education and economic growth – the two sides of the same coin

2013-11-21 22.53.34The link between education and economic growth was the topic of a conference organized by the European Liberal Forum, the Friedrich Naumann Foundation for Freedom and Alternative Libérale on November 21st. The round table, held in Aix en Provence, gathered experts and politicians from across Europe to discuss the impact of education systems on the economy and the well-being of the citizens.

In a context of economic downturn and skyrocketing unemployment, in which risks of social exclusion, poverty and the resulting cost for society are high, the issue at stake was to discuss best practices in the field of education that could boost the economy. Of course, possible reforms of the education systems in crisis-ridden countries are not the remedy to all economic difficulties, but they are one component of a long-term solution to increase European competitiveness.

2013-11-21 21.27.11
Dr. Oliver Falck

Dr. Oliver Falck, professor at the Ludwig Maximilian University in Munich and researcher at CESifo, started his presentation by demonstrating the correlation between the performance of the education system and economic growth. While he pointed out that there has been a strong correlation between the average performance of students and economic growth over the past 50 years, he also showed that best performing students have a positive impact on growth too. For our policy makers this means that “countries should care both about educating future rocket scientists as well as raising the average performance of students”.

2013-11-21 22.39.08
Dr. Pierre Garello

Dr. Falck concluded his presentation by giving some advice on what works in the field of education. According to data gathered from across OCDE countries, spending alone does not improve the quality of education. France and Finland for example, spend the same yearly amount of public funds per student, however, there is an average difference of competences of 50 points in the PISA test, which amounts to about 2 years of schooling. Dr. Pierre Garello, professor of economics at the Université Aix-Marseille, said “the good news is that we can do better with less money”. What is needed is institutional reform focused on three main aspects: accountability, autonomy of schools and choice of the citizens. Dr. Falck underlined that the best system offers standardized tests (accountability) allowing citizens to compare (choice) the quality of education offered in different schools which compete against each other (autonomy).

Improved educational achievement is thus crucial for growth. The question remains how to shape the system. Our panelists discussed different practices across Europe, focusing on France, Germany and Sweden. Dr. Garello lamented that the French education system is blocked and elitist and therefore does not support social mobility. His remedy for the French system would start with a progressive liberalisation of the system, which would allow introducing competitiveness between educational models, for example by introducing education vouchers.

2013-11-21 22.10.59
Sibylle Laurischk & Christer Nylander

In Germany, the question of equal opportunities and social mobility is at the heart of the debate too, underlined Sibylle Laurischk, former member of the German Bundestag. “Ensuring that every child has the same chances is a profoundly liberal goal”, she declared. The recipe, according to Ms Laurischk, would thus be a pragmatic approach combining quality public education with private schools. Data presented by Dr. Falck showed that systems with early childhood education and late tracking achieve better results in the field of equal opportunities. France is a good example of a system where children go to pre-school from age 2-3 and students are separated according to their achievement only very late. In this sense, Ms Laurischk underlined that France could be an example for Germany, where efforts towards “de-tracking” are ongoing.

In Sweden too, reforms are ongoing. Christer Nylander, member of the Swedish Riksdag, explained how the biggest education system reform since the 1950’ is currently being implemented. In spite of the expected positive effects of reform, he warned that the weaknesses of the previous system continue having effects for many years, reducing the positive impact of change. Summing up the debate, Mr Nylander identified four main challenges to be met in Europe. Firstly, striking a balance between increasing the competitiveness of the European education systems, while at the same time avoiding exclusion from the system. Furthermore, it might prove to be difficult to break barriers in the dual labour markets, such as Spain, Italy and France, in which employees are highly protected, while job seekers face big barriers to enter the labour market. A third challenge might be to reconcile the aim of promoting free-thinkers with the aim to prepare skilled workers adapted to the demand of the labour market. Finally, Mr Nylander stressed that “in times of economic crisis and budgetary restraint, it is important to focus on institutional reform and not merely on spending”. Let us hope that our education systems have (or will) produced the innovative and freethinking minds we need to design these reforms and that our politicians will have the courage to push them through.

Julie Cantalou

Pictures, source: fnf-europe