Human Capital Geography

Why should states and localities care about education? An article in Sunday's New York Times Magazine tells the story of an emerging trend in United States public schools, letting children age a bit more before attending kindergarten ("redshirting"). The perception is that more mature, relatively speaking, children test better resulting in the appearance of an improved state school system:

States, too, are trying to embrace the advantages of redshirting. Since 1975, nearly half of all states have pushed back their birthday cutoffs and four — California, Michigan, North Carolina and Tennessee — have active legislation in state assemblies to do so right now. (Arkansas passed legislation earlier this spring; New Jersey, which historically has let local districts establish their birthday cutoffs, has legislation pending to make Sept. 1 the cutoff throughout the state.) This is due, in part, to the accountability movement — the high-stakes testing now pervasive in the American educational system. In response to this testing, kindergartens across the country have become more demanding: if kids must be performing on standardized tests in third grade, then they must be prepping for those tests in second and first grades, and even at the end of kindergarten, or so the thinking goes. The testing also means that states, like students, now get report cards, and they want their children to do well, both because they want them to be educated and because they want them to stack up favorably against their peers.

If such incentives improve human capital, do states benefit? The NYTM somewhat cynically indicates that states are bumping up the average age of children in kindergarten as an inexpensive way to improve standardized test scores thereby producing schools that appear improved. I'll take that as a hint that states have little intrinsic incentive to invest heavily in education.

I'll describe this issue in another way. If someone living in a region has no children, why would they vote for higher taxes to fund schools? The better educated children are likely to leave the area and the childless voter doesn't stand to benefit from better schools. The pressure on the states to improve schools comes largely from parents upset about the condition of the institutions their children must attend. The concern is not about enhancing regional human capital, or even state human capital. The fuss is mostly about parents looking out for the best interest of their children.

If I wanted a better school for my child, I'd move to a better school district. However, I'd consider the cost first because of what I perceive to be diminishing returns on my investment. Thankfully, I'm mobile enough to make such choices. Some parents are stuck and comprise a captive market. I'd guess school districts with relatively immobile populations are some of the worst in terms of cost efficiencies.

Given the labor mobility in the United States, the scale of funding for public schools is dysfunctional. The return on investment in human capital is nationwide, not local. The American tradition of small scale school politics is quaint and outdated. While I am at it, state subsidies for higher education are also a bad bet.

I write all of the above as a retort to the opinion printed in the Post-Gazette, "In praise of property taxes." The author's point is that there is no social benefit to subsidizing large homes for senior citizens. Why should a senior citizen with no kids living in the area subsidize your child's education? Boil the article down. The author wants senior citizens to move instead of parents with children in school to move, a classic case of one's self-interest pitted against another's self-interest. In that light, I think the author looks quite petty.