The 20th century is often called “The American Century”, reflecting the broad influence of the United States of America on world affairs during the past 100 years. Claudia Goldin and Lawrence F. Katz, authors of The Race between Education and Technology, argue that a major factor in America’s becoming the richest and most influential nation in the world was the egalitarianism and quality of our educational system (1). Rapid technological change pervaded the 20th century, and that technological change could best be assimilated and used to advantage by well educated people. Goldin and Katz see education as an investment in human capital-an investment that has paid off handsomely for many years for individuals and for our entire society.

Goldin and Katz document in detail the positive influence of a strong educational system on higher levels of technology, productivity, and economic growth. They point out that education of all citizens also contributes to broader, more equitable distribution of wealth. Only educated workers can make effective, efficient use of improved technologies. If education is not broadly distributed, then those who can afford to educate themselves and their progeny reap most of the benefits and the gap between haves and have-nots widens. The better the match between education and technology is the stronger economic growth is and the more equitably that growth is distributed. Education is in a race with technological innovation: for best results the two need to keep pace with each other.

According to Goldin and Katz, the United States educational system has fallen behind in that race during the last three decades: “The supply of educated Americans increased greatly and almost unceasingly from 1900 to around 1980. … But after around 1980 the supply of educated Americans slowed considerably.” For example, the fraction of the U.S. population that graduated from high school was highest in the world in the 1970s but only seventh in the world in 2000. Norway, Japan, Canada, Sweden, Finland, and Switzerland had passed us. A graph of fraction of the population completing high school in the U.S. is linear with a slope of about 0.1 per decade from 1910 to 1970, but the graph levels off and even declines somewhat after 1980. In 2004 the U.S. four-year college completion rate lagged behind the rate for 12 other nations.

Goldin and Katz argue further that not only the quantity but the quality of U.S. education is falling behind. They cite the fact that in the 1995 TIMSS (Trends in International Mathematics and Science Study) 14 of the 20 countries exceeded the U.S. scores in general mathematics and in the 2003 PISA (Program for International Student Assessment) U.S. 15 year olds ranked 24th out of 29 countries in mathematics literacy and problem solving. Clearly there are problems, but what are the problems and what should we be doing about them?

Goldin and Katz identify two main problems: lack of readiness to handle college work on the part of high-school dropouts and some high-school graduates; and, for many students who are qualified to attend college, inability to pay for higher education. They argue that many failing schools are failing particular classes of students: poor, inner-city, often minority children. This is likely a consequence of what in the past was a strength of the American system: independent school districts that could choose how much to spend and how to spend it. Freedom of parents to move to a district that provided better education led to competition among such districts that encouraged most of them to improve quality. Unfortunately, such freedom to choose better education is not available to those who cannot afford higher housing costs. Moreover, the advantages of education in terms of economic returns to the better educated are not obvious to those with few or no role models who have succeeded through educational achievement. Similarly, reduced resources for higher education are felt most keenly by those least able to afford anything beyond necessities.

Goldin and Katz argue strongly that changes in policies are needed if the American educational system is to catch up with technological change and again make major contributions to our economic future. They support better access to quality pre-school and K-12 education for children from disadvantaged families. At the post-secondary level they prescribe more generous financial aid that is easy for students to find and use. Their 350-page book cites study after study whose findings show the entire nation would benefit from greater investment in educational infrastructure, but of course the benefits would be long-term, not immediate.

With the current economic downturn there has been a lot of talk about stimulating the economy with funding for infrastructure projects and almost as much talk about choosing only projects where there are immediate returns. Stimulating our educational infrastructure seems to me at least as important and even more likely to benefit our society, and I think that money could be spent on this right away. I hope that President-elect Obama will consider Goldin and Katz’s proposals, which could begin immediately and would have major long-term benefits. I hope that you will read this book and, if you agree with them, press for adoption of the educational changes it espouses.

Literature Cited

1. Goldin, Claudia; Katz, Lawrence F. The Race between Education and Technology, Belknap Press of Harvard University Press: Cambridge, 2008.

National Center for Education Statistics