Academic journal article Journal of Economics and Economic Education Research

Economic Education as Public Policy: The Determinants of State-Level Mandates

Academic journal article Journal of Economics and Economic Education Research

Economic Education as Public Policy: The Determinants of State-Level Mandates

Article excerpt

ABSTRACT

This paper presents an empirical examination of the factors that influence a state's decision to mandate the teaching of economics within the K-12 curriculum. 38 states currently require some form of economics instruction within their approved curriculum. A binary choice probit model was estimated to determine the relationship between a variety of socioeconomic, political and policy environment variables in the decision to implement and maintain an economic education mandate. The results indicate that the number of university-based centers for economic education and the number of parents belonging to state parent-teacher associations positively affect the mandate choice. The incidence of poverty was found to be negatively associated with a state's requirement to include economics within the curriculum. These and other results highlight the need for additional research into the aggregate effects of required investments in economic human capital.

INTRODUCTION

Most academic economists share the belief that formal training in the discipline and the "economic way of thinking" are valuable investments in human capital for the individual and for society. It is widely argued that economic literacy results in the ability of individuals to make better choices --whether in the marketplace or in the polling booth. More than 30 years ago, Nobel laureate George Stigler (1970) reasoned that economically literate citizens are better able to make decisions about educational investments, job opportunities, personal finances, and politics, and that better individual decisions ultimately result in stronger societal outcomes. The National Council on Economic Education (NCEE) and its network of state councils and local centers have advocated arguments based on this theme since its conception in 1949. (1) Although the efforts of the NCEE and other advocacy groups have increased the degree and quality of economics education available in our nation's schools, recent studies indicate a startling degree of economic illiteracy still exists among the general public (Dahl, 1998). For example, the Federal Reserve Bank of Minneapolis conducted a national survey concerning basic economic concepts with respondents answering correctly only 45% of the time (Federal Reserve, 1998). Results such as this suggest that many schools may not yet provide an adequate degree of instruction in economics.

At any point in time, it is difficult to determine the overall extent of economics instruction within the curriculum of the nation's K-12 schools (Bragaw & Hartoonian, 1983; Walstad, 2001). In general, the states' central educational authority (usually a state Department of Education) constructs and issues an approved framework for the curriculum leaving local school boards and administrators only minor discretionary choices. Each state's central educational authority is held accountable by state legislators and other officials elected statewide; and local school boards are usually directly elected or appointed by locally elected office holders. Currently, 38 states mandate the teaching of economic concepts within their approved K-12 curriculum (up from only 28 states in 1991). (2) Only 13 of these states formally require a course in economics for high school graduation (Dempsey, 2000; Walstad, 2001). To date, economists have failed to evaluate the long-run effect of required economics instruction on individual outcomes such as income, educational attainment and employment. There is, however, some evidence to suggest that mandated economic education is important at the aggregate level. Grimes and Lee (2000) report that states with mandated economic education courses experienced significantly greater rates of growth in their gross state product than states without a mandate over the 1982-1997 time period. This observed association should be viewed with caution as the limitations of currently available data make it impossible to isolate and directly measure the effects of specific investments in economic education on aggregates of economic growth. …

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