Normal View Dyslexic View
Personal Reflection
The English education system: undervalued and over-measured
Anna Vignoles*†
avignoles@leverhulme.ac.uk
Abstract
The economic value of education is widely known. However, policymakers, despite recognising its economic benefits in theory, in practice treat education spending and school funding as a cost. In the English context, this has led to a shortfall in investment in education, training and skills. The prevailing characterisation of education as a cost obscures its genuine societal and economic value, and there is a particular need for better measurement of its social benefits, including human capital, in terms of health, civic participation, and well-being. This article explores the consequences of downplaying the investment role of education, which include cuts in real-terms education spending despite trying to pursue an economic growth agenda, and increases in educational and income inequality. The current (burdensome) accountability system then adds to the problem of underinvestment, measuring as it does only a narrow range of academic outcomes. Its high-stakes approach also appears to be undermining the desirability of teaching as a profession, which will be detrimental to education quality. This article discusses potential solutions, advocating for a comprehensive and long-term approach to education planning and measuring outcomes beyond traditional academic metrics. It urges a paradigm shift in perceiving education as a sustained, lifelong investment, necessitating strategic systemwide planning, cross-party consensus and, above all, a commitment to valuing the education system and its workforce. The article arises from a British Academy Lecture delivered in November 2022.
Keywords
educationinequalityschool fundinginvestmenthuman capital An effective education system is vital for our health, wealth and indeed happiness. As an economist of education, I argue that we need to not only engage more fully with the notion of education as an investment in our future but also become far smarter in the way that we measure its benefits. Further, while policymakers acknowledge the economic benefits of education in theory, their practical treatment of education spending as a cost has resulted in a shortfall of investment in education, training and skills in the English context. As we see nurses, doctors and teachers leaving their respective professions in the face of high workloads and low pay, it is evident that the last few years have put an enormous strain on our public services and our education system is no exception. There is also a related and longer standing problem with the English state education system, namely that we undervalue education while simultaneously our accountability system over-measures it, or more precisely does not measure the right things. While this perspective from an economist of education is not unfamiliar, it is one that, in my experience, bears reflection and elaboration.
Undervaluing our education system
Most people value education for intellectual development, enjoyment and our ability to participate culturally, politically and socially. But education holds a wider social benefit beyond that experienced by the individual: it is a public good, an externality in economic parlance. This is why the state needs to invest. The public discourse that frames education as ‘cost’ rather than ‘investment’ undervalues education in both senses of the word.
There is of course a potential contradiction here. In recent decades, English schools and universities have been repeatedly told how important it is for students to get a good job with decent pay. Many educators have argued that we have in fact become overly focused on education as an investment, paying too much attention to its role in preparing the nation’s workforce and ignoring its wider benefits (British Academy 2021). Most politicians acknowledge the economic value of education in their rhetoric, and indeed regularly cite economic evidence on the impact of education on earnings and growth.1 However, in practice state spending on education is not actually treated like the decades-long investment that it actually is, and wider impacts from education beyond earnings are largely ignored. This is one reason why we struggle to improve our economic position and fail to tackle some social ills. Further, in the public debates about the need to foster research and development (R&D), improve productivity and boost growth, the mantra that ‘skills are important’ does not always translate into long-term sustained investment.
The theory of education as an investment is well established (Smith 1776; Becker 1962; Schultz 1962). A more skilled and productive workforce should lead to economic growth. The empirical evidence broadly supports this view (Hanushek & Woessmann 2012), although measuring human capital and its causal impact on productivity is undoubtedly difficult (Abraham & Mallatt 2022). Empirically, differences in education and skill levels (human capital) explain on average around half of the difference in earnings between countries (Deming 2022). So from a national perspective, the level of human capital is clearly important, even if determining a precise causal estimate of its impact on productivity and growth is challenging. For the individual, the return on investment in education is generally estimated at 5 per cent higher earnings or more per year of study, and this return has remained sizeable despite expansion of the numbers accessing higher education (Psacharopoulos & Patrinos 2018). Education remains a good investment for the individual.
Not all schooling gives you the same level or type of skill and not all qualifications are equally valued in the labour market. In the UK the returns to education vary by level and type of qualification, and by subject area. This applies as much to apprenticeships as to degrees (Britton et al. 2019, 2022; Cavaglia et al. 2020; McIntosh & Morris 2021). There is also good evidence that what matters economically is the skill level of individuals rather than their qualifications per se (Hanushek & Woessmann 2008), though the two are of course related. So different courses, even those leading to the same type of qualification, may yield different skills and hence a different return on investment. Further there are synergies between different types of skills affecting a range of outcomes. For example, the impact of music on mathematics skills is well documented, and participation in arts education has been found to have positive impacts on other academic and non-academic outcomes (see Akın 2023; Education Endowment Foundation 2021; Hallam 2010).
Investment in human capital is also not sufficient on its own to guarantee economic growth.2 Capital investment, R&D and an array of other favourable institutional factors are needed to generate growth, and there is interesting work being done by The UK Productivity Commission and The Productivity Institute (Chadha 2023) to explain the UK’s sluggish productivity. What is clear is that a country will struggle to boost productivity if its workforce lacks skills. Further, R&D, which is so essential for progress on the many global challenges we face, such as climate change, requires a skilled population. To do better on skills requires investment by the state in initial education and adult learning and by firms in developing the skills of their employees. Yet in the UK, firms have significantly reduced their investment in training over recent decades, an acute problem that is exacerbating skills shortages (Farquharson et al. 2022; Mason 2020). Without sufficient state investment, however, it is unlikely that firms will opt for a high-skill model of production and invest in their workforce. These two forms of investment are complements not substitutes.
Education also matters for the nature of economic growth. As Goldin & Katz (2010) explained, if education and skills grow in tandem with technological innovation, this can boost productivity and grow the economy in a way that ensures that the earnings benefits are more equally distributed across the workforce. Without investment in education and skills, we can end up with technological change driving rising inequality. The skilled attract ever larger salaries whilst the lower skilled are replaced by technology and left behind in low-wage jobs (Autor 2014; Autor et al. 2006; Brewer & Wren-Lewis 2016; Goos et al. 2014). In the face of the coming impact of artificial intelligence technologies on the structure of our labour market, this should be of significant concern to us.
This body of evidence has persuaded most policymakers to agree on the economic importance of skills. But policy still struggles to connect the goal of developing a highly skilled population with what is actually taught in our classrooms, colleges and universities. It fails to recognise that the shortage of mathematics and physics teachers is not just a problem for our young people; it is a barrier to economic success. If our early-years professionals, primary teachers, secondary teachers and lecturers are not in good shape, this will lead to insufficient supply of skilled people in the workforce, and limited progress.
A broader view of education
I also argue we need to take a far broader view of the benefits arising from education. Education provides non-pecuniary benefits for the individual, such as health, and it benefits wider society (for example, by encouraging higher levels of civic participation). Proving the causal impact of education on these outcomes has been even more challenging, but there is a growing robust and compelling literature on the non-pecuniary benefits of education (e.g., Clark et al. 2021; Dolan et al. 2008; Oreopoulos & Salvanes 2011). There is good evidence that education provides knowledge and skills that help people navigate many different aspects of life, like health, relationships, culture or politics.
Some of these non-economic outcomes from education also have implications for the role of the state. For instance, investing in education does appear to improve health, which whilst beneficial for the individual, will also be vital if we are to manage the demands on our health services (Marmot 2020; Marmot et al. 2010). A nice example is that spending on early-years programmes has been found to have a positive causal impact the health of the child in adulthood (Cattan et al. 2021). Thus, lower spending on education will increase the burden on our social services and health systems.
Not all outcomes improve with more education: the relationship between education and well-being is mixed and here establishing a causal relationship is very difficult (Dolan et al. 2008). Likewise, much of the positive effect of education is through its impact on earnings. Certainly higher earnings also allow greater participation in cultural and other activities with substantial non-pecuniary benefits. Still the fact remains: individual and societal benefits of education are significantly underplayed in policy decisions.
The consequences of underplaying the investment role of education
When times get hard we regularly cut real-terms education spending. If we valued education as a long-term investment, we would be more wary of budget cuts in the face of a temporary economic downturn, at least not without acknowledging the long-term impact on our growth.
UK expenditure on education is not the lowest compared to competitor countries, at around 4.5 per cent of national income in 2021. However, public spending choices after 2008 have hit the education sector hard, whilst inflation has undermined the 2021 Spending Review intention of restoring spending per pupil to 2010 levels. Although spending on schools was protected to some degree post-2008, other areas of spending in education, such as Further Education (FE), suffered deep cuts (for example, FE experienced an 11 per cent fall in per pupil funding from 2010 to 2020 (Sibieta 2021)). Half of young people study in FE colleges post-16 and they are on average from less advantaged backgrounds, so these cuts disproportionately affected poorer students. Given that most international comparisons suggest that the UK’s deficiency in basic and intermediate skills is holding us back (Farquharson et al. 2022), reducing investment in FE makes even less sense.
The education system has also arguably had to do more heavy-lifting over the last decade, putting even more pressure on shrinking budgets. The needs of children have become greater as real household incomes have declined and other public services have experienced cuts in real terms. The literature is convincing: the home learning environment and household poverty are major drivers of children’s development and academic achievement (Britton & Vignoles 2017; Cooper & Stewart 2021; Duncan & Murnane 2011). As child poverty has worsened, so too will children’s educational outcomes, demanding an even greater investment in schooling to remedy this.
A second consequence of ignoring the investment value of education is that we see rising educational inequality. The achievement gaps between rich and poor children emerge strikingly early and it is hard to help poor children catch up (Francesconi & Heckman 2016; Goodman & Gregg 2009). Figure 1 illustrates the cognitive test score gap between those from different quintiles of the household income distribution at different ages, estimated from a number of different UK longitudinal studies (Goodman & Gregg 2009). The gap in cognitive skill between rich and poor children emerges early, widens through primary and into secondary, and is entrenched by age 14 (see also Crawford et al. 2017). So education investment in children needs to start in the pre-school period. There are also critical periods of child development, so that particular phases of schooling are important for different aspects of a child’s development. For example, the early years are particularly important for some cognitive processes, including language acquisition and adolescence for peer relationships (Blakemore & Mills 2014; Francesconi & Heckman 2016). Consistent, cumulative long-term investment in education is crucial.
One of the positive aspects of state education spending in England is that it is progressive. Yet our system has become less progressive over the last decade. Figure 2 shows spending on primary school, indicating the ratio of spending on poorer students relative to richer ones. In the late 2000s, pupils in the poorest most deprived quintile of the population were funded at a level that was around 1.35 times more than pupils in the most advantaged quintile (Farquharson et al. 2022). This has declined to just over 1.2 times. More positively, the UK does invest in the early years. Three and four year-olds are entitled to differing amounts of funded childcare depending on whether their parents are in work. Two year-olds in low-income families are entitled to a part-time place in nursery too. However, a declining proportion of children are eligible for free nursery places at the age of two. In 2014, 38 per cent of children were eligible for a place and this has declined to just 27 per cent (Farquharson 2023). Another indicator is that 45 per cent of support for early years was ringfenced for low-income families in 2007 and that is now down to 19 per cent (Cattan et al. 2022: 1). We have therefore invested relatively less in our most disadvantaged children during a period in which things have got harder for the poorest families. No coincidence then that this is also a period during which the gap in achievement between rich and poor students widened.
Figure 2.
Spending per primary school pupil by quintile of eligibility for free school meals, relative to least deprived quintile (Farquharson et al. 2022).
The outcome of the different home and school environments experienced by different children is evident in Figure 3, which shows that whilst 33 per cent of the cohort as a whole get to degree level just 17 per cent do in the most deprived quintile of households. The figure for privately educated students is 71 per cent (Farquharson et al. 2022). These figures predate the additional damage done to the poorest children’s achievement by the pandemic (Blundell et al. 2022; DELVE Initiative 2020; Major et al. 2020; Montacute 2020; Sibieta 2021; Sievertsen & Burgess 2020). Further, these data describe just one facet of disadvantage, namely low income. Yet it has long been recognised that disadvantage is intersectional, and recent analysis of achievement in England at age 16 suggests that low-income White British and Black Caribbean students have markedly lower achievement than average, more so for boys (Bhopal & Preston 2012; Phoenix & Pattynama 2006; Strand 2014, 2023; Vincent et al. 2012). The inequalities are stark.
A third consequence of underplaying the investment role of education is that we underinvest in the one part of our education system that we know can yield better outcomes, namely the teacher workforce. Education is a complex, people-based, cumulative process. Most changes in school policy, whether curricular or pedagogical, will make only a small difference to pupil achievement. However, evidence suggests that the quality of teaching has a major impact on achievement (Allen & Sims 2018; Britton & Vignoles 2017; Hanushek & Rivkin 2010; Rivkin et al. 2005; Slater et al. 2012; Staiger & Rockoff 2010). Teaching quality also disproportionately benefits low-income children, in terms of their outcomes, and yet in England poorer students are more likely to have unqualified, less experienced or out-of-subject teachers (Allen & Sims 2018).
These findings should guide investment. We need to ensure that teaching is an attractive profession, and that we can retain experienced teachers. Yet teacher turnover is high and recruitment is problematic (Doherty 2020; STRB 2022). This is partly explained by a decade of declining teacher pay, which even before the recent bout of inflation was down 9 per cent in real terms over the period 2010–21 (Sibieta 2022). FE teachers experienced an even greater decline. All this against a backdrop of ongoing concerns about teacher workload and autonomy. The decline in real pay over the last decade will take much to restore it and, if pay increases have to come out of existing school budgets, the consequence will be increased pupil–teacher ratios. This in turn may lead to even more problems with workload and teacher drop out. Reframing this issue as one of investment may help us see the value of our teaching workforce.
The risks
Some will doubt the wisdom of talking about education as an investment. Does focusing on earnings as an outcome produce too narrow a definition of what a good education looks like? Indeed it can. We surely do not want to imply that studying a particular subject is not valuable, even if the student does not go on to a high-earning job. Nursing is a noted example: we clearly need more people to undertake nursing qualifications and the social value of their education will far exceed any monetary gain. That said, unless we genuinely commit to the idea of investing in people, of building their human capital in the broadest sense, education risks being classed as a cost to be minimised rather than a long-term investment for the future of society. I would also argue that the investment model is useful to convey the importance of giving the next generation the skills they will need to navigate a more complex world and a more challenging labour market.
To make this investment paradigm work, we need to better measure the outcomes from education that we care about, from well-being to civic participation, from higher earnings to better health. We should not focus purely on an individual’s qualifications or indeed their earnings as the sole metrics by which we judge the education system.
Which brings me to why I think we over-measure the education system and fail to measure the right things.
Over-measured
If we agree that education is an investment that can yield a broad range of valuable outcomes, then we need an accountability system that ensures this. The question is whether our measurements and accountability systems are fit for purpose.
There is no doubt that the UK really does like to measure its public services. We have been at the vanguard of developing metrics-based accountability systems, and directly linking our funding of public services to those metrics. The English education system is measured extensively, from early years to university, with an accountability system that places great weight on the test score and qualification outcomes of students. Over and above these metrics, we have bodies such as OFSTED and the Office for Students that have their own distinct regulatory frameworks and additional metrics.
Measuring the outcomes from our education system is important. National and international standardised test scores are potentially useful indicators both of how well the system is doing overall and of how different groups of pupils are faring within it. There is also robust evidence that using such tests for accountability purposes can have a positive impact on student outcomes (Burgess & Greaves 2021). For example, Burgess et al. (2013) show that removing published school performance tables in Wales negatively affected school effectiveness. However, metrics-based accountability has also led to well-documented problems (for a summary, see Figlio & Ladd 2020). In the UK context there is an extensive body of work by the late great Harvey Goldstein (Goldstein & Spiegelhalter 1996) and others highlighting the challenges of trying to hold a school system accountable using test scores (see also Dearden & Vignoles 2011). The wrong application of these metrics led to the system being gamed in various different ways. For example, schools coming under pressure to manipulate admissions processes to admit pupils who are easier to teach and to enrol students in sub-optimal qualifications to improve their league table positions. There was also too much emphasis on single metrics, such as ‘5 A*–C grades at GCSE’, leading to excessive focus on students near the C–D threshold.
We have, however, developed better metrics over time and taken steps to prevent some of the gaming that occurred in response to the introduction of school league tables in the 1980s. For example, value-added measures at GCSE were introduced to allow for the fact that some children enter the school with lower/higher levels of prior achievement. Certainly any effective accountability system needs to recognise that the child’s economic circumstances, their peers and their own effort all affect their achievement. Crude outcome measures or even some value-added measures cannot fully take this into account (Britton & Vignoles 2017; Burgess et al. 2015). Holding schools to account for factors outside their control is not a desirable feature of any accountability system. One can argue that we should not lower expectations of children from poor backgrounds and hence we should ask schools to ensure that there is no gap in achievement between rich and poor students. However, empirical evidence would suggest that even in highly effective schools and education systems, the socio-economic circumstances of children continue to play a role in their success at school (and indeed beyond in the labour market). Ignoring this does not help us do better for such children and does not address the additional resources that schools need if they are to overcome the barriers faced by disadvantaged children.
We have also made less progress on measuring what we seek from our education system. What about the other outcomes that we value, from health to civic participation, from job quality to well-being? They are largely absent from our school or university metrics, despite the availability of outcome measures in administrative datasets, such as health or an individual’s subsequent use of other public services. These outcomes are likely to be correlated of course, with schools that do well for students in terms of academic outcomes often doing well for them in terms of other outcomes. However, there is an important principle here. If we care about these outcomes, we should measure them, as only then can we properly assess the value that state investment in education generates for the economy and wider society.
I am not suggesting holding schools accountable for children’s health. Rather, that in order to judge the impact of investing in education, we should have sufficient measures in place to assess a far broader range of outcomes than just qualifications or earnings. A broad set of outcome measures also avoids the temptation for schools to overly focus on a single metric, potentially leading to both gaming and a narrowing of the student’s experience. It is also worth noting that Jackson (2018) found that the impact of teaching on test scores and other student behavioural outcomes (absence, exclusions) was only weakly correlated. Further, the teacher effects on student behaviours had a more positive impact on long-run outcomes, such as graduating from high school. This implies that, if we only focus on test scores as a measure of success of either teachers or schools, we are missing part of the picture and in the Jackson study at least, it appears that teaching that leads to higher test scores does not always engender these other positive outcomes.
One might argue that regulators (OFSTED, for example) do attempt to assess some broader outcomes from education. There is a large literature critiquing the role of OFSTED in education which I will not rehearse here, but I will note that it is hard to determine empirically what OFSTED does assess. Recent evidence suggests that OFSTED quality measures do not correlate highly with academic achievement, nor with broader outcomes such as school engagement and student well-being (Von Stumm et al. 2021). Specifically Von Stumm et al. found that only 4 per cent of the variation in pupils’ GCSE achievement could be accounted for with the OFSTED rating of their school and even less (1 per cent) when full account was taken of prior school performance and socio-economic background. Perhaps this is not surprising given that OFSTED focuses heavily on process measures (what schools do rather than their outcomes). As any school leader will acknowledge, schools spend a lot of time and effort on whatever OFSTED is (or is believed to be) most concerned with in terms of policies, pedagogy, curriculum, etc. This leads to gaming of a different type, as teachers undertake activities deemed to be desirable by OFSTED rather than necessarily those that are likely to positively impact student outcomes. This is costly in terms of teacher time and morale.
Given the problems we face today in teacher recruitment and retention (Doherty 2020), the over-measurement and poor measurement of our education system should worry us far more than it does. The system grinds on: teachers and headteachers continue to bemoan the administrative burden and workload associated with accountability systems, yet the burden (in teacher time) of the accountability system is taken as a given, without challenging whether the costs of our current system exceed the benefits. There is also a lack of confidence in our regulatory system. Only one in ten teachers think that OFSTED is a reliable indicator of quality, according to large-scale surveys conducted by TeacherTAPP (https://teachertapp.co.uk/). Regulation is, of course, essential and often not appreciated by those being regulated, but it does need to be proportional, particularly with resources becoming scarcer.
The way forward
So what is the way forward? We need to acknowledge that education is a sustained investment that pays back over decades, far longer than the political cycle. We need to make decisions today whilst recognising that the gains are a generation away. However difficult to achieve, building cross-party consensus and long-term planning are the only options here. This is not a trivial ask: various ideas have been floated to no effect in the past, such as an independent Education Commission. Note, however, that other countries have longer term and more consensus-based planning, involving a broad range of stakeholders. This surely benefits their education systems and should be a priority for any government. We might also reflect that as a nation we have managed to plan investment in physical infrastructure over decades (think more Elizabeth Line and less HS2) and we should strive for similar vision for our education system.
Education is not a panacea for our low productivity, but it is a vital component and without it, our economic future looks bleak. We need consensus across government on this point, including from HM Treasury. Resources are always scarce and government budgets need to be tightly managed, but the investment required in education is no less important than the investment in our railways or health system. We cannot just hope that we will find talented researchers or doctors when we need them. Rather, we need to recognise that our education and skills system is the bedrock on which our future economic and societal plans rest.
We need to prioritise investment for the whole population and workforce, not just for those on the graduate route. We need to do better in terms of ensuring everyone gets the breadth of skills and experiences needed for the outcomes we want, including the skills needed for the labour market. This will require some reform of qualifications and agreement from the education sector that part of its role is to prepare the next generation for work. We also need to invest from the earliest years: the more we improve the skills of our youngest children, the easier their subsequent learning will be. The better we equip our teens, the easier (and cheaper) it will be for them to retrain later. This needs the longer term strategic planning discussed above rather than a short-term budget-to-budget approach.
Schools cannot do everything and in recent years they have had to try to do more with less against a backdrop of greater social and economic challenges in many communities. Schools regularly report having to take care of the physical needs of children, such as providing clothing, food and other equipment needed in school (Lucas et al. 2023). However, teachers report that the bigger concern is the challenge of trying to support children who have mental health problems or Special Educational Needs and Disabilities (SEND) with insufficient resource (OFSTED 2019). This has impacted teacher well-being, recruitment and retention, further worsening the problem. Low levels of pupil achievement and high levels of educational inequality have their origins in structural problems outside the school system. Any reduction in the stark inequalities in childhood experience is likely to improve the skills of the most disadvantaged and narrow the gap in outcomes.
In summary, a serious attempt at longer term planning of the education system, combined with efforts to improve the socio-economic circumstances of our poorest children, should lead to less wasted resources and better outcomes. And in case long-term planning and reducing child poverty appear illusive, what should policymakers do in the short term with limited resources? Focus more on making teaching a more desirable occupation. Ensure there is less policy churn on issues like school governance and curricula, as this constant change is costly in terms of teacher and headteacher time and unlikely to do much to improve outcomes. Ensure our accountability system helps not hinders and that the regulatory burden is proportionate. Start measuring what we really care about in terms of the outcomes from education: use a constellation of metrics, including but not restricted to test scores and earnings, to judge the performance of the education system as a whole. Construct a less costly (in all senses of the word), more supportive and evidence-based accountability system to judge individual school performance. In sum, we need to ensure we value our education system and guide it with a light touch.
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1
Politicians from both sides of the political divide tend to emphasise the economic value of education and its role in growth. See, for example, Rishi Sunak’s speech on the importance of mathematics (Prime Minister’s Office 17 April 2023) or Michael Gove’s 2023 speech at The Convention on the North on levelling up (PolicyMogul 25 January 2023) or equally, Rachel Reeves’ speech on ‘securonomics’ on 24 May 2023 at the Peterson Institute, Washington DC (Labour 24 May 2023).
2
There has been much valid criticism of the growth agenda, not least in relation to how we measure economic growth (Coyle 2015) and indeed debate about whether economic growth should be an objective per se given the environmental constraints that we are facing as we battle climate change and other issues (Raworth 2017). Even accepting this, however, we will still need a range of skills to drive the technological innovation needed to achieve a broader conception of ‘growth’.
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DOI: 10.5871/jba/012.a21
Published on: 22 May 2024
Volume: 12
Issue: Issue 1 & 2
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Vignoles, A. (2024), ‘The English education system: undervalued and over-measured’, Journal of the British Academy, 12(1/2): a21 https://doi.org/10.5871/jba/012.a21Crossref
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July 2023
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20 March 2025
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