THE INSTITUTE FOR FISCAL STUDIES
7 Ridgmount Street, London WC1E 7AE
020 7291 4800, mailbox@ifs.org.uk, www.ifs.org.uk
Embargoed until 13.00 19 th
August 2005.
Contact: Emma Hyman or
Bonnie Brimstone,
020 7291 4800 / 07730 667013.
James Heckman, Nobel Laureate, Henry Schultz Distinguished Service Professor of Economics at The
University of Chicago and Distinguished Professor of Microeconometrics at UCL, will present a paper on
‘Education Policy’ as one of four Institute for Fiscal Studies Lunchtime for Policy Sessions, due to take place 19 – 24 August 2005.
This session will discuss new developments in the economics of education and their implications for education policy. It will examine models and evidence that explain why so few students take advanced schooling when the monetary return is high. In particular, findings show that:
1. Monetary return and cost is only one of the factors determining participation in higher education and is not necessarily the dominant one.
2. Economists and government officials greatly overstate the impact of monetary return and cost on the decision making process and ignore “psychic costs”, which are substantial.
3. “Psychic costs” include factors such as the motivation to work and achieve, discipline, expectation and social ability, all of which are determined by family factors.
4. These factors emerge early in life and relate to cognitive and noncognitive skills. As such, policies directed toward children in their formative years are more effective than finance-related policies, such as subsidised tuition fees, that target adolescents.
5. Conventional methods of measuring “cost” and “return” need to be modified. Non-cognitive skills are very important for education decisions and are a large part of what schools teach their students but policy is still based on the notion that schooling mainly signals cognitive ability.
6. Tuition policy is not an effective way to promote schooling and reduce socioeconomic gaps in schooling attendance. The abilities that are formed early in life are far more important.
ENDS
Notes to editors:
1. James Heckman, Chicago / UCL, will present ‘Education Policy’ from 1pm – 2pm on Friday 19 th
August as part of the
Econometric Society World Congress 2005 in London. Please contact Bonnie Brimstone on 020 7291 4800 to reserve a place.
2. The Institute for Fiscal Studies Lunchtime Policy Sessions are supported by Blackwell Publishing and the ESRC.