Academic journal article New England Economic Review

Education in the 21st Century: Meeting the Challenges of a Changing World

Academic journal article New England Economic Review

Education in the 21st Century: Meeting the Challenges of a Changing World

Article excerpt

During the twentieth century, the United States was a world leader in raising the educational attainment of its population. This important achievement contributed to national productivity growth and extended economic opportunity to formerly disadvantaged groups in society. Now, at the beginning of the twenty-first century, U.S. institutions of higher learning retain an excellent reputation for quality. Less confidence exists, however, in the educational system's ability to meet broad economic and social objectives adequately. This uncertainty stems in part from the shifting global economy and the evolving nature of employment. These doubts also reflect the legacy of widening income inequality over the past quarter century. These concerns have sparked both federal and state legislation to reform elementary and secondary schooling.

The Boston Fed's 47th annual conference brought together experts from a variety of perspectives to analyze current institutional and financial arrangements in the area of education, with the goal of identifying the nature of the shortcomings and appropriate ameliorative actions. Although the primary focus was on the U.S. educational system, the Bank welcomed international perspectives. The experience of other nations provided evidence on the degree to which educational challenges are being driven by changes in the worldwide economy, and offered insights on the strengths and weaknesses of alternative educational systems.

Conference Themes

A central theme of the conference was that the U.S. educational system is in the process of being restructured. The key debate is no longer about funding for education. It is about how to change institutions and incentives so as to bring about better educational outcomes.

Dissatisfaction with the current education system in the United States was ubiquitous among conference participants. To varying degrees, all claimed that the performance of the average student should be improved, that the educational attainment of low-income and minority students must be raised from currently unacceptable levels, or that greater attention should be placed on developing high-end talent. As a result of their concerns, participants generally welcomed the greater emphasis that public and private officials are placing on improving schools.

Conference participants agreed that education is increasingly important in determining individuals' earnings potential. They also agreed that the total benefits to society from education are greater than the sum of what individuals earn as a result of their increased educational attainment. Participants reached a consensus that these links between personal and social wellbeing and education need to be better communicated to the U.S. populace.

Relative to foreign populations, the U.S. population, on average, is highly educated in terms of years of schooling. However, the average U.S. high school or middle school student does not score highly on international standardized tests. As a response, some participants would concentrate on increasing academic achievement for a given number of years of schooling. Others would focus more on increasing the fraction of the population that completes secondary and higher education, especially since gains in educational attainment have slowed among younger cohorts.

Recent education-related reforms in the United States have had two key thrusts. "Standards-based reforms" involve establishing performance benchmarks for students and schools and holding them accountable for their performance. "Choice" involves providing expanded alternatives to traditional public schooling, such as in the form of vouchers and charter schools. In addition, over the last several decades, states have implemented a variety of changes in school financing in response to voter and legislative actions and judicial decrees. …

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