|PROFESSOR COLM HARMON - SCHOOL OF ECONOMICS|
|THE ECONOMICS OF EDUCATION:HOW TO INCREASE THE RETURN|
In the age of Gonski, the My Schools website and high-stakes national testing regimes such as NAPLAN, there have been increased public efforts to raise education standards across Australia. But what is the value of an educated public, and how can we measure a return on investment that will allow our governments to justify their spending in this sector? Professor Colm Harmon, Head of the School of Economics, believes these questions are worth asking if we hope to achieve effective social policy.
“Education is the great policy ‘superpower’ on a range of fronts,” says Professor Harmon, “and is rare amongst policy choices in promoting equity for individuals and generating returns for society more generally.”
A variety of ‘returns’ on an investment into education can been identified, the most significant measurable one being a person’s rise in earnings, which increases by as much as 8-10% per year of
“The job you get will be better, you will be healthier, more socially engaged, and happier... education has perhaps the best rate of return to any investment you can make,” says Professor Harmon.
He has found that the investment pays off the most when directed towards early education, as this will have the most effect, regardless of social class. Professor Harmon argues that early education can actually work to “level the playing field” between the social classes.
“It raises social engagement, lowers the chance of ‘bad’ outcomes like falling into crime, and is actually the policy most likely to encourage people to choose to go into higher levels of education later in their adolescence.”
The fallacy in policy terms is that spending more money - or giving more money to families through welfare to spend on education - will encourage more participation in education. “The decision not to stay in education,” he argues, “is actually a question of how individuals value the present over the future - a much much tougher issue to deal with.”
Professor Colm Harmon joined the University of Sydney in July 2012, after having worked at a number of the world’s premier educational institutions, including University College Dublin in his home country of Ireland, as well holding visiting positions at Princeton University, University of Chicago and University College London.
Having appointments far and wide has allowed Professor Harmon the vantage point to witness economic education factors in different economies. So, what has he learnt from the Australian case?
“For Australia, the lessons to learn from other countries is to invest and be consistent in that investment - ‘stop-start’ is a terrible plan, and investing in early years while then not following through into later education levels is also a mistake,” he says.
In an election year when education is high on the national agenda, research such as that being undertaken by Professor Harmon is incredibly timely. Given that he passionately believes that universities should be actively involved in the public debate, he plans to get his message of the
economics of education to the right ears. And this is what he plans for much of the critical research being undertaken in the School of Economics.
“Australia has a relatively low visibility of economists from the Academy in public debate - the exceptions are very good but very few,” he explains.
“However, when I see what academic economists produce, I see it all has relevance.”