House Republicans recently approved the “Death Tax Repeal Act of 2015.”  If we care about our debt obligations, social mobility, or equality of opportunity, we should consider doing just the opposite: raising the tax and applying it to more of the super-wealthy.

Currently, the estate tax doesn't touch the first $5.43 million of an individual’s assets and the first $10.86 million of couples’ assets. The tax kicks in after that amount, eventually rising to a top rate of 40 percent.  

Proponents of repeal make a number of claims to make their case. Let’s examine the most common.

1. The estate tax affects a significant portion of Americans. Only about 5,400 estates will pay any estate tax this year. That’s about 0.2% of all estates – that’s right, just two tenths of one percent.  That’s a fortieth of the 1970’s share. Americans worried about the Estate Tax have nothing to fear but fear itself. 
2. The estate tax hurts small farms and businesses. In fact, the estate tax touches virtually no small farms or businesses. The Urban-Brookings Tax Policy estimated how many farm and business estates worth under $5 million paid any tax in 2013. Twenty did. Twenty small farms and businesses paid any estate tax in 2013. And those 20 estates faced an average tax rate of 4.9%. Only 660 farm estates—of any size—paid the tax in 2013, and 100 of those farms had assets worth over $20 million. The USDA estimates that 0.6% of all farm estates owed federal estate tax in 2013. This is because families who farm for a living have access to generous deductions: up to $1 million for continuing to farm the land for the next 10 years and up to $500,000 for adopting conservation easements. They can also delay payment and lighten their tax liability by gifting their land to heirs. Small businesses have similarly generous carve-out.
3. Repealing the estate tax doesn't affect the budget, because it’s a small share of federal revenue. In 2014, the estate tax represented 0.6% of federal collections, or roughly $20 billion annually, according to the Joint Committee on Taxation. But part of the reason that’s so low is because Congress has increased the exemption and lowered the rate in recent years; in 2001, the top rate was 55% and the exemption was only $675,000. Still, even today, repealing the tax is costly. The JCT estimates that repeal would cost the government $269 billion over the next decade.
4. The estate tax represents double taxation. Well, maybe. It is true that people  pay taxes on their income when earned and then may have to pay again when they pass it on to their heirs.  However, because the super-wealthy keep much of their assets as unrealized capital gains (55% for those estates worth over $100 million), the estate tax is the only way, right now, to tax these capital gains. In that sense it can be viewed as a partial corrective within our funhouse of a tax system. Some capital gains, to be sure, are the fruits of hard work and entrepreneurial creativity but a lot are simply the result of gains among those wealthy enough to participate in speculative ventures. 

One thing is true: repeal would mean a large tax break for the wealthiest 0.2% of the population. The 1,336 families with estates worth more than $20 million would get almost three-fourths of the benefit from the repeal and enjoy an average windfall of $10 million each, according to the Center on Budget and Policy Priorities. The 318 families with estates worth more than $50 million would see an average windfall of $20 million each.

These facts are often obscured by our penchant for individual stories. One Washington Post story for example, acknowledges many of the statistics above, but then goes on to give two examples of farmers who had to sell land to meet their tax burden, one of which is several decades old, when the exemption was much lower. Elected officials love these kinds of stories and tell them often. Are they unaware of the generous special provisions for this group?  Do they truly believe that very wealthy families are the ones we should be helping? Or are they thinking about who is going to finance their next campaign?

The estate tax is one of the most progressive aspects of our tax system. In a time of increasing inequality, it provides a way to counteract the formation of a “permanent ownership class.” If anything, we should consider raising the rate and lowering the exemption to pay down debt and invest in opportunities for the unlucky children at the bottom of the wealth ladder. We could start by closing the stepped-up basis loophole and raising the estate tax to Clinton-era levels. We could do so in a way that protects real farmers and small business owners. Wealthy heirs, meanwhile, will still do very well, much better than the rest of America. A serious estate tax would allow us to come closer to our national ideal, in which no child is born a prince, and every child can become as rich as a king.

Note: An earlier version of this post said that the estate tax only applies to assets in excess of the exemption, which is incorrect. The estate tax is levied on the entire estate but is offset by a credit equal to the tax on the first $5.43 million. This version is corrected.

       

       

In December 2009, the Saban Center for Middle East Policy conducted a day-long simulation of the diplomatic and military fallout that could result from an Israeli military strike against the Iranian nuclear program. In this Middle East Memo, Kenneth M. Pollack analyzes the critical decisions each side made during the wargame.

The simulation was conducted as a three-move game with three separate country teams. One team represented a hypothetical American National Security Council, a second team represented a hypothetical Israeli cabinet, and a third team represented a hypothetical Iranian Supreme National Security Council. The U.S. team consisted of approximately ten members, all of whom had served in senior positions in the U.S. government and U.S. military. The Israel team consisted of a half-dozen American experts on Israel with close ties to Israeli decision-makers, and who, in some cases, had spent considerable time in Israel. Some members of the Israel team had also served in the U.S. government. The Iran team consisted of a half-dozen American experts on Iran, some of whom had lived and/or traveled extensively in Iran, are of Iranian extraction, and/or had served in the U.S. government with responsibility for Iran.

Read more »

Downloads

• Download

      

       

       

       

       

       

       

       

       

       

       

       

       

       

Over the past two decades, the Puget Sound area’s innovation-driven economy has become a magnet for highly educated people from across the country and around the world. Drawn to the region by some of the nation’s most innovative companies—Microsoft, Boeing, Nintendo, Amazon, Genentech and the Fred Hutchinson Cancer Research Center, to name a few—the Puget Sound region ranks well on measures of educational attainment. Of the nation’s largest 100 metro areas, the Seattle-Tacoma-Bellevue area is 11th in bachelor’s degree holders and 17th in graduate degree attainment.

But for all its brainpower, the region has fallen behind in terms of cultivating homegrown talent, particularly in less affluent school districts located in South Seattle and South King County. Starting from an early age, low-income students and children of color in these communities tend to lag behind on important indicators of educational success. The effects of this achievement gap worsen with time, putting these students at a serious disadvantage that often affects their ability to find jobs and their earning potential. 

In an effort to address this achievement gap, the Community Center for Education Results has teamed up with the city of Seattle, the University of Washington, the Seattle Community Colleges District, the Puget Sound Educational Service District, the Bill & Melinda Gates Foundation and others to form the Road Map Project, a coalition working to double the number of South Seattle and South King County students pursuing a college diploma or career credential by 2020.

What’s innovative about the Road Map Project is its focus on collective action and community engagement. By bringing together key stakeholders to collaborate on shared goals, the project is creating a new model for efforts to reduce inequality in educational attainment. Its cradle-to-college-and-career approach aims to improve student outcomes beginning with access to prenatal care and kindergarten readiness all the way through to elementary and secondary schooling and beyond. Through a combination of community outreach and partnership building, data-driven goal-setting and performance management, the project supports area organizations working to boost student success and close the achievement gap in South Seattle and South King County.

In December, the Project released its baseline report, which provides a detailed snapshot of student achievement in the Road Map region during the 2009-2010 school year. With this initial data in hand, the project will be able to work with area organizations to encourage and track progress on a wide variety of indicators, ranging from birth weight and full-day kindergarten enrollment to proficiency in reading, math, and science, parent engagement to graduation rates and postsecondary enrollment. “Demographics should not determine the destiny of children in this region,” says Mary Jean Ryan, executive director of the Community Center for Education Results. “The children who grow up here deserve as good of an education as the people who show up here.”

      

       

The Girls’ Education Imperative

In 1948, the world’s nations came together and agreed that “everyone has a right to education,” boys and girls and rich and poor alike. This vision set forth in the Universal Declaration of Human Rights has been reinforced over the decades and today the girls who still fight to be educated are not cases for charity but actively pursuing what is rightfully theirs. In recent years, girls’ education has also received attention because, in the words of the United Nations, “education is not only a right but a passport to human development.” Evidence has been mounting on the pivotal role that educating a girl or a woman plays in improving health, social, and economic outcomes, not only for herself but her children, family, and community. Educating girls helps improve health: one study published in The Lancet, the world’s leading medical journal, found that increasing girls’ education was responsible for more than half of the reduction in child mortality between 1970 and 2009. The economic benefits are clear: former chief economist at the World Bank and United States Secretary of the Treasury Lawrence Summers concluded that girls’ education “may well be the highest-return investment available in the developing world” due to the benefits women, their families and societies reap. And because women make up a large share of the world’s farmers, improvements in girls’ education also lead to increased agricultural output and productivity.

Progress in Girls’ Education

Given the importance of girls’ education, for girls’ own dignity and rights and for a broad sweep of development outcomes, it is no surprise that global agendas have focused heavily on it. For more than two decades, girls’ education has been recognized as a global priority and incorporated into development targets, which has rallied governments, nongovernmental organizations (NGOs), foundations and international organizations. From the 1990 Education for All (EFA) Goals to the 1995 Fourth World Conference on Women in Beijing and to the 2000 Millennium Development Goals (MDGs), girls’ education has been a priority, particularly in international development communities. Perhaps the most influential of these has been the MDGs, which reinforce parts of the EFA goals by focusing two of their eight goals on education, namely on achieving universal primary education and achieving gender parity in both primary and secondary school.

Progress in enrolling children, especially girls, into primary school is seen by many as a development success story. Indeed there is much to celebrate. Since 1990, the number of girls in low-income countries enrolling in primary school has increased two-and-a-half times, from 23.6 million to nearly 63 million in 2012. This has translated into a large increase in the girl-boy ratio in low-income countries, from 82 to 95 girls per 100 boys in primary school. For low- and lower-middle-income countries combined, the number of girls enrolled reached over 200 million girls in 2012, an almost 80 percent increase, and globally two-thirds of countries have near-equal numbers of boys and girls enrolled at the primary level. 

In 1990, in South and West Asia, there were only 74 girls enrolled in primary school for every 100 boys, but by 2012 the region had achieved equal numbers of boys and girls in school.

This progress was largely made by the leadership of developing country governments that prioritized expansion of primary schooling opportunities and by the global community’s support of governments focused on reaching the MDGs. Some of the biggest gains have been in regions struggling the most. In 1990, in South and West Asia, there were only 74 girls enrolled in primary school for every 100 boys, but by 2012 the region had achieved equal numbers of boys and girls in school. Similarly, sub-Saharan Africa, which had the lowest levels of girls in school in 1990, has experienced marked improvement, with the girl-boy ratio increasing from 83 to 92 girls per 100 boys in primary school.

The focus on getting girls into school has helped close gender gaps in relation to other factors too, such as wealth and location of residence. The fact that family income and urban or rural locality are now the most likely indicators of school enrollment is a big victory for girls’ education. The World Inequality Database on Education (WIDE) shows that in India, for example, 38 percent of girls and 25 percent of boys of primary school age were not in school in 1992. By 2005, that gap had narrowed to 24 percent of girls and 22 percent of boys. However, today the gap between the richest and poorest children’s attendance is much starker—37 percent of children from the poorest 20 percent of families versus just 11 percent of the richest 20 percent are out of school. And in many areas, girls actually outpace boys, especially at higher levels of education. In one third of countries, there are now more girls than boys enrolled in secondary school. Also, girls often do better once in school, with boys making up 75 percent of grade-repeaters in primary school.

Downloads

• Download the paper (PDF)

       

       

       

       

       

       

       

       

       

       

       

       

Education is at a critical juncture in many nations around the world. It is vital for student learning, workforce development, and economic prosperity. For example, research in Turkey has found that raising the compulsory education requirement from five to eight years increased the percentage of women having eight years of school by 11 percentage points, and had a variety of positive social consequences.

Yet despite the emergence of digital learning, most countries still design their educational systems for agrarian and industrial eras, not the 21st century. This creates major problems for young people who enter the labor force as well as teachers and parents who want children to compete effectively in the global economy.

In this paper, Darrell West examines how mobile devices with cellular connectivity improve learning and engage students and teachers. Wireless technology and mobile devices:

• Provide new content and facilitate information access wherever a student is located
• Enable, empower, and engage learning in ways that transform the environment for students inside and outside school
• Allow students to connect, communicate, collaborate, and create using rich digital resources, preparing them to adapt to quickly evolving new technologies
• Incorporate real-time assessment of student performance
• Catalyze student development in areas of critical-thinking and collaborative learning, giving students a competitive edge

Downloads

• Download the paper

       

Super PACs and other lightly regulated political organizations are dumping hundreds of millions of dollars into American elections. What should be done about it? Unlike many candidates for federal or state office, so-called independent expenditure groups face no restrictions on how much individuals and groups can give to them. And thanks to several federal court decisions, including Citizens United v. Federal Election Commission, independent groups can spend unlimited amounts to influence elections. The public understandably worries about the political clout of wealthy groups—especially since donors often can hide their identities.

Reformers have proposed various remedies: disclosure rules, the appointment of a liberal Supreme Court justice to reverse Citizens United, even a constitutional amendment to overturn that decision. Those long-shot strategies, however, are unlikely to create the kind of small-donor democracy that many reformers seek. Money, like water, will inevitably flow into the political system. Laws can’t do much to reduce the amount of money in politics; what they can change is where the money goes.

An easier path to improving politics

In our new Brookings paper, The State of State Parties, we suggest an easier path to improving politics—one that is right under our nose. Strengthening state political parties can help offset the clout of super PACs.

Our study, based on a survey of 56 state-party organizations plus detailed interviews with 15 of their leaders, points to the distinctive and constructive role that state parties play in American politics. In an era when politics seems to be spinning out of control, party organizations are among the few actors that seek to integrate and balance interests—for instance, by recruiting candidates with broad appeal, by playing honest broker among contending partisan factions, and by building coherent strategies among campaigns up and down the ticket. Party organizations also generate a lot of grassroots activity to mobilize volunteers and voters.

How regulations on parties increase super PAC spending

State parties are among the most heavily regulated entities in American politics, a situation that diminishes their influence relative to non-party groups. For instance, the vast majority of state parties face restrictions on the source and size of donations, and some contribution limits are unrealistically low. In Massachusetts, no donor can give more than annual aggregate of $5,000 to all local and state parties. That’s a paltry sum in statewide elections that can easily cost $55 million, including $20 million in independent expenditures.

Super PACs and other groups naturally fill the vacuum because they do not have to contend with limits on raising and spending money. Often, outside groups effectively drown out the parties. In our survey, only half the parties said they advertise on TV and radio sometimes or often, usually because they lack the resources to do more.

The figure below shows that parties’ independent spending is miniscule compared to the growing expenditures of non-party groups over the past five election cycles. In the 2014 election cycle, the parties accounted for just six percent of total independent spending in the states for which we had good data.

An especially significant finding is that restraints on political parties seem to amplify the activities and influence of outside groups. As illustrated in the table below, 65 percent of respondents in states with contribution limits to parties said that independent groups sponsor more than half or almost all political ads, compared to only 23 percent in states without contribution limits. 

In other words, independent spending is significantly lower when parties are not limited. These differences translate into electoral clout. In states with contribution limits, 65 percent of respondents said independent spending is often a key factor in gubernatorial elections, while fewer than half said the same in states with no limits.

Correlation does not prove causality, but our findings provide strong circumstantial evidence that when you restrict the parties, you get more independent expenditures by non-party groups.

It’s not hard to strengthen state parties

We recommend changes to strengthen state parties and restore them to a place of prominence in campaigns. First, state governments should raise or eliminate contribution limits so the parties can acquire sufficient resources to compete with outside actors. This would allow state parties to serve as clearinghouses for campaign money, which would bring more “dark money” toward accountability and transparency.

Second, parties should be allowed full freedom to coordinate their activities with their candidates and allied groups. This would make them more valuable to candidates and would allow the parties to perform their irreplaceable role of supporting candidates across the party ticket.

We also suggest giving parties favorable tax treatment so that donors are more likely to give to parties than candidate-sponsored super PACs or interest groups. We also recommend other regulatory changes that would encourage parties to do more grassroots work with voters.

Loosening the constraints on state parties would not stop the flow of money into politics (nothing can do that), but would channel more of the money to accountable actors. That’s why we think of this solution as building canals, not dams. And the incremental steps we propose require no sea-changes in public opinion or heroic legislation. In fact, they command support in both parties’ establishments, making them a good starting point for reform. That’s why we conclude that strengthening state parties is a realistic path toward a better balanced, more effective, and more accountable political system.

       

       

      

Executive Summary
In order to realize the world’s commitment to ensuring education for all by 2015, important innovations and reforms will be needed in the governance and financing of global education. In 2008, Presidential Candidate Barack Obama committed to making sure that every child has the chance to learn by creating a Global Fund for Education. Secretary of State Hillary Clinton has recently called for a new architecture of global cooperation that requires institutions to “combine the efficiency and capacity for action with inclusiveness.” A new Global Fund for Education should be an independent and inclusive multi-stakeholder institution that builds upon existing institutions and supports country-driven solutions. It must be capable of mobilizing the approximately $7 billion annually still needed to achieve education for all, while holding all stakeholders accountable for achieving results with these resources.

None of these objectives will be achieved without a major rethinking of the global education architecture and an evolution of current mechanisms for financing education. More than 75 million children remain out of primary school, and only 53 of the 171 countries with available data have achieved gender parity in primary and secondary education. Achieving these two Millennium Development Goals, and the broader Education for All Goals set out by 164 countries, will require more capable international institutions. A Global Fund for Education that links funding to performance, that ensures a greater share of resources reach schools and that coordinates the efforts of diverse stakeholders is essential to putting these goals within reach.

In order to realize President Obama’s vision for creating a Global Fund for Education, significant leadership by the United States on global education will be needed in the coming year. A clear commitment by the United States to leverage the contributions of other nations and work together to support country-driven strategies through a Global Fund for Education could catalyze unprecedented international energy around achieving education for all.

Policy Brief #169

Learning from Existing and Innovative Mechanisms

The Global Fund for Education should reflect an evolution of the successful elements of existing multilateral mechanisms. Seven years ago, the Fast Track Initiative (FTI) was launched as the primary financing vehicle for achieving education for all. Working with key donors and international institutions, the FTI was supposed to mobilize the resources needed to close the massive education-financing gap. Housed within the World Bank, the FTI has not yet been able to build a strong public brand, engage the support of a number of leading donors or mobilize adequate resources from major donor countries.

The FTI has not been capable of generating resources on a scale consistent with its founding vision of achieving universal education for all. Although the FTI initially focused on expanding bilateral investments in education, in 2003 it created a multilateral Catalytic Fund to mobilize additional resources with an early focus on countries without major bilateral donors. In 2006, the FTI’s multilateral Catalytic Fund represented approximately 2% of aid commitments to basic education. Although the number of countries contributing to the Catalytic Fund has increased in recent years, many of the biggest donors are still not participating, and just three countries accounted for over 70% of total pledges in 2008. As a result, the FTI faces a shortfall of $1.2 billion for the coming year, which is more than all the money it has received from donors in the last six years. Although many countries endorsed by the FTI have experienced increases in bilateral basic education funding, their share of overall assistance focused on basic education has not increased, a fact that makes it hard to rule out the possibility that overall aid trends were largely responsible for that growth.

The FTI has recently undertaken a set of internal governance reforms designed to improve its performance, but these changes alone are unlikely to overcome some of the structural challenges it still faces. Without independent capacity for action, more inclusive governance, greater attention to conflict-affected countries and stronger accountability for results the FTI will not be able to mobilize sufficient resources or deliver the results that it was set up to achieve. At the same time, the FTI’s model of requiring and supporting the development of comprehensive national education strategies and seeking to align donor funding around these strategies should be incorporated in any evolution to a Global Fund for Education. Similarly, the FTI’s ambition of aligning bilateral flows along with multilateral funding remains an important objective to ensure that all types of donor funding are being fully leveraged.

A Global Fund for Education should also draw on the successful experience of other innovative global development financing mechanisms. Among the most successful of these new institutions is the Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFATM). Since its inception, the GFATM has generated commitments of over $20 billion and is now the leading source of external financing for tuberculosis and malaria. One of the keys to the GFATM’s success in resource mobilization has been the strong engagement of both civil society and developing countries as full partners with donors in its governance. Civil society representatives and developing countries have equal standing in decision-making at the global level within the GFATM. As a result, civil society stakeholders have been at the center of the largely successful drive for resource mobilization for the Fund and partner countries are more invested in its success.

Toward a Global Fund for Education

The core mission of the Global Fund for Education should be to mobilize the financing needed to achieve universal quality education. Linking successful early learning with meaningful opportunities for secondary education, the Global Fund for Education should maintain a focus on achieving universal quality basic education for all while also supporting early childhood learning and secondary schooling as part of a comprehensive approach to education. The GFE should be guided by a set of core principles, focused on key objectives, and reflect an evolution of existing mechanisms:

1. Independent Capacity for Action

Independence from any other international institution will be essential to establish the public profile necessary to succeed in this resource mobilization challenge. The independence of the Global Fund to Fight AIDS, Tuberculosis and Malaria has been a key to its success, while the lack of independence of the FTI has been a primary obstacle to its ability to mobilize sufficient resources. An independent Global Fund for Education should still leverage the expertise and commitment of other international institutions, such as UNESCO, UNICEF and the World Bank. Technical experts from these institutions can play an important role in supporting countries both in the development of national strategies and in the effective implementation of these strategies.

2. Inclusive Governance

Inclusive governance will be critical to building a multi-stakeholder constituency that is committed to mobilizing resources. Developing countries, civil society and donor countries should be equal partners in a system in which there is equal representation and the support of each constituency is necessary for major decisions. Such a requirement in the governance structure of the GFE will not only strengthen the internal decision-making process by subjecting it to the scrutiny of diverse perspectives but will also provide external legitimacy and increase the effectiveness of its implementation efforts. Without such inclusiveness, the Global Fund for Education will not be able to succeed in either mobilizing donors to make education a top priority nor in ensuring that these resources are being well-spent in partner countries.

3. Country-Driven Solutions

Developing countries should set the agenda for the best approach for themselves through the development of comprehensive national education strategies. The Global Fund for Education should build on the FTI’s ambition of aligning donor investments around comprehensive national education plans that reflect country-driven solutions. In order to ensure that strategies are truly national—not simply government plans—the Global Fund for Education should mandate that civil society and other non-governmental stakeholders are full partners in the development of these strategies at the national level. Just as inclusive participation at the global level supports effective resource mobilization, ensuring full participation at the national-level supports effective implementation by diverse stakeholders.

4. Accountability for Results

Accountability must be central to the design of the Global Fund for Education. Systems to ensure financial accountability and that money actually reaches the school level and helps students learn are essential to the effectiveness of the Fund. Performance-based disbursement, which connects continued funding with demonstrated results, is the best way to create incentives for recipient countries to deliver on promised results. In addition, key indicators including gains in enrollment, gender equity and student learning outcomes should be included among performance measures. Utilizing improved measures for assessing student learning will be critical to improving completion rates and maximizing the development gains from education. In order to ensure some reasonable predictability of financing, countries that show strong performance should be eligible for extensions of funding over significant periods.

5. Focus on Low-Income and Conflict-Affected States

Given the inevitable limits on the resources of the Global Fund for Education, it is important to establish an allocation principle for distributing funding. First, the eligibility for funding should be limited to low-income countries, or those countries that are eligible for funding under the World Bank’s IDA window. Second, there should be special attention to the challenges of states currently experiencing or emerging from conflict and mechanisms to ensure support for education in these states. Third, the GFE should prioritize those countries categorized as least-developed and that have the most limited national resources. Finally, funding should generally be linked to the level of effort by national governments in supporting education.

6. Leverage and Align Donor Resources

The Global Fund for Education holds enormous promise for mobilizing funding from a diverse array of donors. Just as the Global Fund to Fight AIDS, Tuberculosis, and Malaria has leveraged a two-to-one match of U.S. resources from the rest of the world, the Global Fund for Education could similarly leverage global resources for education. In order to ensure adequate incentives for countries to contribute their fair share, donor board seats should be allocated and adjusted with reference to donor contributions. In addition, there should be a regularized replenishment process built into the initial design that is linked to the overall resource needs for universal education and that encourages long-term commitments by donors. The GFE should also be committed to providing multiple channels for donor assistance, both bilateral and multilateral, as long as these funds are truly aligned with national strategies. While there is a clear need to expand multilateral financing for education far beyond what has been possible to date, it is also important that ongoing bilateral commitments are much better integrated with the objectives of national education strategies.

A Global Fund for Education holds the key to delivering on the world’s commitment to education for all by 2015. Evolving current mechanisms into a more independent, inclusive, and accountable institution can catalyze the resources and performance needed to achieve universal education. Since education is one of the most leveraged of all development investments, establishing a Global Fund for Education would make a major contribution to reducing global poverty, empowering women, and promoting economic growth in low-income countries around the world.

Downloads

• Download

      

Policy Brief #174

A nation’s education system is a pillar of its economic strength and international competitiveness. The National Bureau of Economic Research analyzed data from 146 countries, collected between 1950 and 2010, and found that each year of additional average schooling attained by a population translates into at least a two percent increase in economic output. A 2007 World Bank policy research working paper reported similar results. Based on these findings, if the United States increased the average years of schooling completed by its adult population from the current 12 years to 13 years—that is, added one year of postsecondary education—our gross domestic product would rise by more than $280 billion.

The story also can be told by focusing on the returns to education for individuals. The difference in income between Americans who complete high school and those who drop out after 10th grade exceeds 50 percent. Large income differentials extend throughout the continuum of education attainment, with a particularly huge gap occurring between an advanced degree and a four-year college degree.

Although education clearly pays, the education attainment of the nation’s youth has largely stagnated, falling substantially behind that of countries with which we compete. In 1960, the United States led the world in the number of students who graduated from high school. Today young adults in many countries, including Estonia and Korea, exceed their U.S. counterparts in education attainment.

	RECOMMENDATIONS
	America’s economic productivity and competitiveness are grounded in education. Our public schools and our higher education institutions alike are falling behind those of other nations. Four policy proposals offer substantial promise for improving American education, are achievable and have low costs: Choose K–12 curriculum based on evidence of effectiveness. Evaluate teachers in ways that meaningfully differentiate levels of performance. Accredit online education providers so they can compete with traditional schools across district and state lines. Provide the public with information that will allow comparison of the labor market outcomes and price of individual postsecondary degree and certificate programs.

The problem of low education attainment is particularly salient among students from low-income and minority backgrounds. The graduation rate for minorities has been declining for 40 years, and majority/minority graduation rate differentials have not converged. Hispanic and black students earn four-year or higher degrees at less than half the rate of white students.

The economic future of the nation and the prospects of many of our citizens depend on returning the United States to the forefront of education attainment. Simply put, many more of our students need to finish high school and graduate from college.

At the same time, graduation standards for high school and college must be raised. Forty percent of college students take at least one remedial course to make up for deficiencies in their high school preparation, and a test of adult literacy recently given to a random sample of graduating seniors from four-year U.S. institutions found less than 40 percent to be proficient on prose and quantitative tasks.

Barriers to Innovation and Reform

Our present education system is structured in a way that discourages the innovation necessary for the United States to regain education leadership. K-12 education is delivered largely through a highly regulated public monopoly. Outputs such as high school graduation rates and student performance on standardized assessments are carefully measured and publicly available, but mechanisms that would allow these outputs to drive innovation and reform are missing or blocked. For example, many large urban districts and some states are now able to measure the effectiveness of individual teachers by assessing the annual academic growth of students in their classes. Huge differences in teacher effectiveness are evident, but collective bargaining agreements or state laws prevent most school district administrators from using that information in tenure or salary decisions.

Further complicating K-12 reform is the fact that authority for education policy is broadly dispersed. Unlike countries with strong national ministries that can institute top-down reforms within the public sector, education policy and practice in the United States are set through a chaotic network of laws, relationships and funding streams connecting 16,000 independent school districts to school boards, mayors, and state and federal officials. The lack of central authority allows the worst characteristics of public monopolies to prevail—inefficiency, stasis and catering to interests of employees—without top-down systems’ offsetting advantage of being capable of quick and coordinated action.

The challenges to reforming higher education are different. The 6,000-plus U.S. postsecondary institutions have greater flexibility to innovate than do the public school districts—and a motive to do so, because many compete among themselves for students, faculty and resources. However, while output is carefully measured and publicly reported for public K-12 schools and districts, we have only the grossest measures of output for post secondary institutions.

Even for something as straightforward as graduation rates, the best data we have at the institutional level are the proportion of full-time, first-time degree-seeking students who graduate within 150 percent of the normal time to degree completion. Data on critical outputs, including labor market returns and student learning, are missing entirely. In the absence of information on issues that really matter, postsecondary institutions compete and innovate on dimensions that are peripheral to their productivity, such as the winning records of their sports teams, the attractiveness of their grounds and buildings, and their ratio of acceptances to applications. Far more information is available to consumers in the market for a used car than for a college education. This information vacuum undermines productive innovation.

Examining Two Popular Reforms

Many education reformers across the political spectrum agree on two structural and governance reforms: expanding the public charter school sector at the expense of traditional public schools and setting national standards for what students should know. Ironically, the evidence supporting each of these reforms is weak at best.

Charter schools are publicly funded schools outside the traditional public school system that operate with considerable autonomy in staffing, curriculum and practices. The Obama administration has pushed to expand charter schools by eliminating states that don’t permit charters, or capping them, from competition for $4.35 billion in Race to the Top funding. Both President Obama and Education Secretary Arne Duncan have proposed shuttering poorly performing traditional public schools and replacing them with charters.

What does research say about charter schools’ effects on academic outcomes? Large studies that control for student background generally find very small differences in student achievement between the two types of public schools.

For example, on the 2005 National Assessment of Educational Progress (the “Nation’s Report Card”), white, black and Hispanic fourth graders in charter schools performed equivalently to fourth-graders with similar racial and ethnic backgrounds in traditional public schools. Positive findings do emerge from recent studies of oversubscribed New York and Boston area charter schools, which use lotteries to determine admission. But these results are obtained from children whose parents push to get them into the most popular charter schools in two urban areas with dynamic and innovative charter entrepreneurs.

What about common standards? Based on the belief that high content standards for what students should know and be able to do are essential elements of reform and that national standards are superior to individual state standards, the Common Core State Standards Initiative has signed up 48 states and 3 territories to develop a common core of state standards in English-language arts and mathematics for grades K-12. The administration has praised this joint effort by the National Governors Association and Council of Chief State School Officers, made participation in it a prerequisite for Race to the Top funding, and set aside $350 million in American Recovery and Reinvestment Act funding to develop ways to assess schools’ performance in meeting common core standards.

Does research support this approach? The Brown Center on Education Policy at Brookings examined the relationship between student achievement outcomes in mathematics at the state level and ratings of the quality of state content standards in math. There was no association. Some states with strong standards produce high-achieving students, such as Massachusetts, while other states with strong standards languish near the bottom in terms of achievement, such as California. Some states with weak standards boast high levels of achievement, such as New Jersey, while others with weak standards experience low levels of achievement, such as Tennessee.

Four Ideas

For every complex problem there is one solution which is simple, neat, and wrong. — H. L. Mencken

I will avoid Mencken’s approbation by proposing four solutions rather than one. Although education has far too many moving parts to be dramatically reformed by any short list of simple actions, we can start with changes that are straightforward, ripe for action and most promising, based on research and past experience.

Link K-12 Curricula to Comparative Effectiveness

Little attention has been paid to choice of curriculum as a driver of student achievement. Yet the evidence for large curriculum effects is persuasive. Consider a recent study of first-grade math curricula, reported by the National Center for Education Evaluation and Regional Assistance in February 2009. The researchers randomly matched schools with one of four widely used curricula. Two curricula were clear winners, generating three months’ more learning over a nine-month school year than the other two. This is a big effect on achievement, and it is essentially free because the more effective curricula cost no more than the others.

The federal government should fund many more comparative effectiveness trials of curricula, and schools using federal funds to support the education of disadvantaged students should be required to use evidence of effectiveness in the choice of curriculum materials. The Obama administration supports comparative effectiveness research in health care. It is no less important in education.

Evaluate Teachers Meaningfully

Good education outcomes for students depend on good teachers. If we have no valid and reliable system in place to identify who is good, we cannot hope to create substantial improvements in the quality of the teacher workforce.

A substantial body of high-quality research demonstrates that teachers vary substantially in effectiveness, with dramatic consequences for student learning. To increase academic achievement overall and address racial, ethnic and socioeconomic achievement gaps, we must enhance the quality of the teacher workforce and provide children from poor and minority backgrounds with equitable access to the best teachers.

Despite strong empirical evidence for differences in teacher performance—as well as intuitive appeal, demonstrated when we remember our own best and worst teachers—the vast majority of public school teachers in America face no meaningful evaluation of on-the-job performance. A recent survey of thousands of teachers and administrators, spanning 12 districts in four states, revealed that none of the districts’ formal evaluation processes differentiated meaningfully among levels of teaching effectiveness, according to a 2009 report published by The New Teacher Project. In districts using binary ratings, more than 99 percent of teachers were rated satisfactory. In districts using a broader range of ratings, 94 percent of teachers received one of the top two ratings, and less than one percent were rated unsatisfactory. In most school districts, virtually all probationary teachers receive tenure—98 percent in Los Angeles, for example—and very small numbers of tenured teachers are ever dismissed for poor performance.

Conditions of employment should be restructured to recruit and select more promising teachers, provide opportunities for them to realize their potential, keep the very best teachers in the profession, and motivate them to serve in locations where students have the highest needs. The precondition for these changes is a valid system of evaluating teachers.

The federal government should require school districts to evaluate teachers meaningfully, as a condition of federal aid. Washington also should provide extra support to districts that pay substantially higher salaries to teachers demonstrating persistently high effectiveness and serving in high-needs schools. But, because many technical issues in the evaluation of on-the-job performance of teachers are unresolved, the federal government should refrain, at least for now, from mandating specific evaluation components or designs. The essential element is meaningful differentiation—that is, a substantial spread of performance outcomes.

Accredit Online Education Providers

Traditional forms of schooling are labor-intensive and offer few economies of scale. To the extent that financial resources are critical to education outcomes, the only way to improve the U.S. education system in its current configuration is to spend more. Yet we currently spend more per student on education than any other country in the world, and the appetite for ever-increasing levels of expenditure has been dampened by changing demographics and ballooning government deficits. The monies that can be reasonably anticipated in the next decade or two will hardly be enough to forestall erosion in the quality of the system, as currently designed. The game changer for education productivity will have to be technology, which can both cut labor costs and introduce competitive pressures.

Already, at the college level, online education (also termed “virtual education” or “distance learning”) is proving competitive with the classroom experience. Nearly 3.5 million students in 2006—about 20 percent of all students in postsecondary schools and twice the number five years previously—were taking at least one course online, according to a 2007 report published by the Sloan Consortium.

In K-12, online education is developing much more slowly. But, the case for online K–12 education is strong—and linked to cost control. A survey reported on page one of Education Week (March 18, 2009) found the average per-pupil cost of 20 virtual schools in 14 states to be about half the national average for a traditional public school.

Local and state control of access to virtual schooling impedes the growth of high-quality online education and the competitive pressure it contributes to traditional schooling. Development costs are very high for virtual courseware that takes full advantage of the newest technologies and advances in cognitive science and instruction—much higher than the costs for traditional textbooks and instructional materials. These development costs can only be rationalized if the potential market for the resulting product is large. But, states and local school districts now are able to determine whether an online program is acceptable. The bureaucracy that may be most disrupted by the introduction of virtual education acts as gatekeeper.

To overcome this challenge, K-12 virtual public education would benefit from the model of accreditation used in higher education. Colleges and universities are accredited by regional or national bodies recognized by the federal government. Such accrediting bodies as the New England Association of Schools and Colleges and the Accrediting Council for Independent Colleges and Schools are membership organizations that determine their own standards within broad federal guidelines. Once an institution is accredited, students residing anywhere can take its courses, often with the benefit of federal and state student aid.

Federal legislation to apply this accreditation model to online K-12 education could transform public education, especially if the legislation also required school districts to cover the reasonable costs of online courses for students in persistently low-performing schools. This approach would exploit—and enhance—U.S. advantages in information technology. We are unlikely to regain the international lead in education by investing more in business as usual; but we could leapfrog over other countries by building new, technology-intensive education systems.

Link Postsecondary Programs to Labor Market Outcomes

On a per-student basis, the United States spends two and one-half times the developed countries’ average on postsecondary education. Although our elite research universities remain remarkable engines of innovation and are the envy of the world, our postsecondary education system in general is faltering. The United States used to lead the world in higher education attainment, but, according to 2009 OECD data, is now ranked 12th among developed countries. We have become a high-cost provider of mediocre outcomes.

Critical to addressing this problem is better information on the performance of our postsecondary institutions. As the U.S. Secretary of Education’s Commission on the Future of Higher Education concluded in 2006:

Our complex, decentralized postsecondary education system has no comprehensive strategy, particularly for undergraduate programs, to provide either adequate internal accountability systems or effective public information. Too many decisions about higher education—from those made by policymakers to those made by students and families—rely heavily on reputation and rankings derived to a large extent from inputs such as financial resources rather than outcomes. Better data about real performance and lifelong working and learning ability is absolutely essential if we are to meet national needs and improve institutional performance.

Ideally, this information would be available in comparable forms for all institutions through a national system of data collection. However, achieving consensus on the desirability of a national database of student records has proved politically contentious. One of the issues is privacy of information. More powerful is the opposition of some postsecondary institutions that apparently seek to avoid accountability for their performance.

The way forward is for Congress to authorize, and fund at the state level, data systems that follow individual students through their postsecondary careers into the labor market. The standards for such state systems could be recommended at the federal level or by national organizations, to maximize comparability and eventual interoperability.

The public face of such a system at the state level would be a website allowing prospective students and parents to compare degree and certificate programs within and across institutions on diverse outcomes, with corresponding information on price. At a minimum, the outcomes would include graduation rates, employment rates and average annual earnings five years after graduation. Outcomes would be reported at the individual program level, such as the B.S. program in chemical engineering at the University of Houston. Price could be reported in three ways: advertised tuition,average tuition for new students for the previous two years, and average tuition for new students for the previous two years net of institutional and state grants for students eligible for federally subsidized student loans. These different forms of price information are necessary because institutions frequently discount their advertised price, particularly for low-income students. Students and families need information about discounts in order to shop on the basis of price.

Many states, such as Washington, already have data that would allow the creation of such college search sites, at least for their public institutions. The primary impediment to progress is the federal Family Educational Rights and Privacy Act (FERPA), which makes it very difficult for postsecondary institutions to share data on individual students with state agencies, such as the tax division or unemployment insurance office, in order to match students with information on post-graduation employment and wages. Congress should amend FERPA to allow such data exchanges among state agencies while maintaining restrictions on release of personally identifiable information. To address privacy concerns, Congress also should impose substantial penalties for the public release of personally identifiable information; FERPA currently is toothless.

Creating a higher education marketplace that is vibrant with transparent and valid information on performance and price would be a powerful driver of reform and innovation. Easily addressed concerns about the privacy of student records and political opposition from institutions that do not want their performance exposed to the public have stood in the way of this critical reform for too long. America’s economic future depends on returning the United States to the forefront of education attainment. Simply put, many more of our students need to finish high school and graduate from college. Investments in improved data, along with structural reforms and innovation, can help restore our leadership in educational attainment and increase economic growth.

Downloads

• Download Policy Brief

      

Policy Brief #181

The new normal for local, state and federal governments is fiscal austerity. Although President Obama supported education during his State of the Union address and in his budget proposal to Congress, cash-strapped localities and states—which foot most of the bill for educating America’s children—may have to balance their budgets with cuts to schools and teachers. The recession exposed a long-developing structural imbalance between public expenditure versus raising the revenue for public services. Especially on education, reality has set in, with a vengeance.

Cutting public expenditure is not necessarily a bad thing. There are, however, some activities that have become so fundamentally governmental and so critically important to the nation’s future that they require special care during a period of severe budget trimming. Education is one such example.

The Brown Center on Education Policy at Brookings has recently developed proposals to ensure that federal investments in education have impact. These proposals present the dual advantage of low costs of implementation at the federal level coupled with the promise of considerable leverage at the state and local level. Two of those proposals are presented in this brief: increasing digital and virtual education and expanding consumer information on higher education.

	RECOMMENDATIONS
	One important path to individual opportunity is higher levels of educational attainment. The U.S. economy is marked by an increasing economic divide between those who are educated and those who are not. In a time of fiscal austerity, every federal dollar invested in education must have a return. Congress should: Increase digital and virtual education. In reauthorizing the No Child Left Behind Act, provide that parents of economically disadvantaged students who are eligible for federal Title I funding should be able to direct that the funding associated with their child be spent to cover the costs of enrolling their child in virtual courses or in a virtual school.   Expand consumer information in higher education. Amend the Higher Education Act (HEA) to require that states that receive federal funds for statewide longitudinal data systems provide information on completion rates, employment levels, and annual earned income for each degree or certificate program and for each degree-granting institution that operates in the state. This information could be disseminated on the Internet.

Downloads

• Download full policy brief

       

We are kicking off the new Millions Learning video series with a spotlight on Teach For All, one of the 14 case studies examined in the Millions Learning report. Teach For All is an international network of local, independent partner country organizations dedicated to improving educational opportunities for children and youth around the globe. From China to Bulgaria to Peru to Ghana, each partner organization recruits and trains recent top-performing graduates and professionals to teach in their country’s underserved communities for two years, with the ultimate goal of developing a cadre of education leaders, both inside and outside of the classroom.

In this video, Wendy Kopp, CEO and co-founder of Teach For All, discusses Teach For All’s unique approach to building a pipeline of future “learning leaders and champions” and the role that a supportive policy environment plays in enabling this process. Kopp then explains how Teach For All grew from the original Teach For America and Teach First in the United Kingdom to an international network of 40 partner countries, sharing her own lessons learned along the way.

To learn more about Millions Learning, please visit our interactive report, Millions Learning: Scaling up quality education in developing countries, and/or visit our webpage.

Video

• Getting millions to learn: Interview with Wendy Kopp of Teach For All

       

Extreme poverty around the world has decreased from around 2 billion people in 1990 living under $2 per day to 700 million today. Further, nine out of 10 children are now enrolled in primary schools, an increase over the last 15 years. Progress in both areas since 2000 has been part of the United Nations Millennium Development Goals, which set targets for reducing extreme poverty in eight areas, and which were the guiding principles for global development from 2000 to 2015. Today, the global community, through the UN, has adopted 17 Sustainable Development Goals to continue these poverty reduction efforts. 

In this new episode of Intersections podcast, host Adrianna Pita engages Brookings scholars Laurence Chandy and Rebecca Winthrop in a discussion of how digital technologies can be harnessed to bring poverty reduction and education to the most marginalized populations.

Listen:

Chandy, a fellow in the Global Economy and Development program at Brookings, says that the trends in getting people digitally connected "are progressing at such speed that they’re starting to reach some of the poorest people in the world. Digital technology is changing what it means to be poor because it’s bringing poor people out of the margins.”

Winthrop, a senior fellow and director of the Center for Universal Education at Brookings, says that "I think [education] access is crucial. And I do think that’s almost the first wave because without it we could work on all the ed tech—fabulous apps, great language translated content—but if you do not have the access it’s not going to reach the most marginalized."

Listen to this episode above; subscribe on iTunes; and find more episodes on our website.

Chandy was a guest on the Brookings Cafeteria Podcast in 2013; Winthrop has been a guest on the Cafeteria a few times to discuss global education topics, including: access plus education; investing in girls' education; and getting millions learning in the developing world.

       

       

       

Event Information

The Risk Evaluation and Mitigation Strategies (REMS) program has become an important tool of the U.S. Food and Drug Administration (FDA) in ensuring that the benefits of a given medical product outweigh the associated risks, and has enabled FDA to approve a number of products that might not otherwise have been made available for patient use. Since the implementation of the REMS program, however, concerns have been raised regarding its impact on patient access to products and the associated burden on providers and health care systems. In an effort to address these concerns—and as part of its commitments under the Prescription Drug User Fee Act reauthorization of 2012—FDA has undertaken efforts to standardize and improve the effectiveness of REMS, and to better integrate REMS programs into the health system. As part of this broader initiative, the Agency is currently assessing the feasibility of integrating accredited continuing education (CE) programs and activities into REMS programs that have been developed for a single drug.

Under a cooperative agreement with the FDA, the Center for Health Policy held an expert workshop on May 18, titled “Incorporating Continuing Education into Single-Drug REMS: Exploring the Challenges and Opportunities”. This workshop provided an opportunity for pharmaceutical manufacturers, regulators, CE providers, accreditors, and other stakeholders to explore the ways that CE can be a valuable addition to the REMS toolkit, discuss potential barriers to the development and implementation of REMS-related CE for single products, and identify strategies for addressing those barriers.

Event Materials

• Bio sheet
• REMS CE Meeting Agenda
• REMS_CE_Meeting_Discussion_Guide_Final
• REMS CE Meeting Summary

      

The Risk Evaluation and Mitigation Strategies (REMS) program has become an important tool of the U.S. Food and Drug Administration (FDA) in ensuring that the benefits of a given medical product outweigh the associated risks, and has enabled FDA to approve a number of products that might not otherwise have been made available for patient use. Since the implementation of the REMS program, however, concerns have been raised regarding its impact on patient access to products and the associated burden on providers and health care systems. In an effort to address these concerns—and as part of its commitments under the Prescription Drug User Fee Act reauthorization of 2012—FDA has undertaken efforts to standardize and improve the effectiveness of REMS, and to better integrate REMS programs into the health system. As part of this broader initiative, the Agency is currently assessing the feasibility of integrating accredited continuing education (CE) programs and activities into REMS programs that have been developed for a single drug.

Under a cooperative agreement with the FDA, the Center for Health Policy held an expert workshop on May 18 titled, “Incorporating Continuing Education into Single-Drug REMS: Exploring the Challenges and Opportunities”. This workshop provided an opportunity for pharmaceutical manufacturers, regulators, CE providers, accreditors, and other stakeholders to explore the ways that CE can be a valuable addition to the REMS toolkit, discuss potential barriers to the development and implementation of REMS-related CE for single products, and identify strategies for addressing those barriers.

Downloads

• Download discussion guide