Education gaps create 'permanent recession,' report says

A new report calculates how much money the US has lost by not meeting its education goals.

By , Staff writer

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    Counting up: Third graders at McDonogh 15 Charter School in New Orleans sing a song to illustrate a math problem in this 2007 photo. African-American and Latino students continue to lag behind white students in academic achievement. If that gap had been closed during the past 25 years, the US economy would have grown by $310 billion to $525 billion, a new report says.
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Educational achievement gaps are typically measured in terms of test scores – across lines of race and income, or even across state and national borders. But what if they were measured in dollars?

A report released today estimates how much better off the economy would have been in 2008 had achievement gaps been closed between 1983 and 1998 – the 15 years following a landmark report on education, “A Nation at Risk.”

Achievement gaps in the United States impose “the economic equivalent of a permanent national recession,” the report concludes.

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It suggests that US economy would have gained:

- $400 billion to $670 billion – or 3 to 5 percent of gross domestic product (GDP) – if students from homes with incomes below $25,000 had risen academically to the level of those above $25,000.

- $310 billion to $525 billion – or 2 to 4 percent of GDP – if African-Americans and Latinos had caught up academically with whites.

- $425 billion to $700 billion – or 3 to 5 percent of GDP – if below-average states had performed at the average level.

- $1.3 trillion to $2.3 trillion – or 9 to 16 percent of GDP – if the US performed at the level of top-performing nations on PISA, an international test of 15 year olds.

By comparison, in the current deep recession, the US economy is falling about $1 trillion short of its output potential, notes the report, published by McKinsey & Company, an international consulting firm with an office in Washington.

From President Obama to governors to parent groups, a growing chorus of voices is linking education to the nation’s economic future.

“We are wasting enormous amounts of human potential every day, and that can’t help but cost the nation lots of money,” says Amy Wilkins, vice president for government affairs at The Education Trust in Washington, which works to close achievement gaps. “Maybe quantifying this economically will add some fuel to the fire for greater equity for kids.”

Latinos and African-Americans are roughly two to three years behind their white counterparts on measures of reading and math skills such as the National Assessment of Educational Progress, the report notes. Low-income students are roughly two years behind higher income groups.

For some observers, the sounding of the alarm over American school achievement is growing tiresome, particularly when it comes to international comparisons, because it’s difficult to draw useful conclusions between vastly different societies.

“We get hit over the head with one report after another like this,” says Clifford Adelman, senior associate at the Institute for Higher Education Policy in Washington. “The kind of analysis McKinsey [and some others] offer are these big categories that don’t tell you where to go to fix the problem,” he says.

While this report doesn’t claim to offer solutions to the gaps it quantifies, it does suggest some areas to be explored.

For one, the level of achievement gaps varies widely between states, districts, and schools – even those with similar demographics. Latinos in Ohio outperform white students in 13 states on eighth-grade reading. Texas’s students have average national test scores significantly higher than California’s, even though Texas spends less per pupil.

The report suggests that systemic policies can go a long way toward narrowing the gaps.

“For far too long we’ve pretended that this achievement gap was somehow resistant to significant and meaningful change,” says Joel Klein, chancellor of New York City schools. “There are different states [and districts] getting very different outcomes ... and that really puts the responsibility on school systems.”

Data from New York City schools show how boosting student achievement in the early grades can pay off in higher graduation rates, which generally lead to higher lifetime earnings. Students who had low test scores in third grade but improved by eighth grade were much more likely to graduate with honors than those who did not improve early on, according to the report.

Chancellor Klein says his district is narrowing achievement gaps in part by changing how teachers are recruited and assigned, to improve minority and low-income students’ access to experienced teachers.

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