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

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• Download the paper

The Earned Income Tax Credit (EITC) provides a refundable tax credit to lower-income working families. In 2011, the EITC reached 27.9 million tax filers at a total cost of $62.9 billion. Almost 20 percent of tax filers receive the EITC, and the average credit amount is $2,254 (IRS 2013). After expansions to the EITC in the late 1980s through the late 1990s—under Democrat and Republican administrations—the EITC now occupies a central place in the U.S. safety net. Based on the Census Bureau’s 2012 Supplemental Poverty Measure (SPM), the EITC keeps 6.5 million people, including 3.3 million children, out of poverty (Center on Budget and Policy Priorities [CBPP] 2014a). No other tax or transfer program prevents more children from living a life of poverty, and only Social Security keeps more people above poverty.

Since the EITC is only eligible to tax filers who work, the credit’s impact on poverty takes place through encouraging employment by ensuring greater pay after taxes. The empirical research shows that the tax credit translates into sizable and robust increases in employment (Eissa and Liebman 1996; Meyer and Rosenbaum 2000, 2001). Thus, the credit reduces poverty through two channels: the actual credit, and increases in family earnings. This dual feature gives the EITC a unique place in the U.S. safety net; in contrast, many other programs redistribute income while, at least to some degree, discouraging work. Importantly, transferring income while encouraging work makes the EITC an efficient and cost-effective policy for increasing the after-tax income of low-earning Americans. Yet a program of this size and impact could be more equitable in its reach. Under the current design of the EITC, childless earners and families with only one child, for instance, receive disproportionately lower refunds. 

In 2014, families with two children (three or more children) are eligible for a maximum credit of $5,460 ($6,143) compared to $3,305 for families with one child. Married couples, despite their larger family sizes, receive only modestly more-generous EITC benefits compared to single filers. Childless earners benefit little from the EITC, and have a maximum credit of only $496—less than 10 percent of the two-child credit. 

Prominent proposals seek to mitigate these inequalities. President Obama’s fiscal year 2015 budget includes an expansion of the childless EITC, a concept outlined by John Karl Scholz in 2007 in a proposal for The Hamilton Project. Notably, MDRC is currently evaluating Paycheck Plus, a pilot program for an expanded EITC for workers without dependent children, for the New York City Center for Economic Opportunity (MDRC 2014). The recent Hamilton Project proposal for a secondary-earner tax credit addresses the so-called EITC penalty for married couples (Kearney and Turner 2013). And the more generous EITC credit for three or more children was recently enacted as part of the American Recovery and Reinvestment Act of 2009, and is currently scheduled to sunset in 2017. 

Considering this broad set of EITC reforms, and recognizing the demonstrated effectiveness of the program as an antipoverty program with numerous benefits, this policy memo proposes an expansion for the largest group of  EITC recipients: families with one child. In particular, I propose to expand the one-child schedule to be on par with the two-child schedule, in equivalence scale-adjusted terms. An equivalence scale captures the cost of living for a household of a given size (and demographic composition) relative to the cost of living for a reference household of a single adult, and is a standard component in defining poverty thresholds. The proposal expands the maximum credit for one-child families to $4,641, from $3,305 under current law, an increase of about 40 percent. The expansion will lead to a roughly $1,000 increase in after-tax income for taxpayers in the bottom 40 percent of the income distribution receiving the higher credit. As this paper outlines, the expansion is justified on equity and efficiency grounds. This expansion is anchored in the equity principle in that the generosity of the credit should be proportional to the needs of families of differing sizes; I use the equivalence scale implicit in the poverty thresholds of the Census SPM as a guide for household needs. This proposal is also supported by efficiency principles given the EITC’s demonstrated success at raising labor supply among single mothers. 

The target population for the proposal is low-income working families with children. Implementing this proposal requires legislative action by the federal government; it is important to note that altering the EITC schedule requires a simple amendment to the tax code, and not a massive overhaul of our nation’s tax system. The revenue cost of the proposal derives from additional federal costs of the EITC, less the additional payroll and ordinary federal income taxes. The private benefits include increases in after-tax income and reductions in poverty. The proposal would also generate social benefits through the spillover effects that the increase in income plays in improving health and children’s cognitive skills (Dahl and Lochner 2012; Evans and Garthwaite 2014; Hoynes, Miller, and Simon forthcoming).

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• Building on the Success of the Earned Income Tax Credit - Full Text

In his state of the union and his budget, the President spoke of the stagnation of middle class incomes. Whatever growth we have had has not been broadly shared.  More than 78% of the growth in GDP between 1979 and 2013 has gone to the top one percent. Even Republicans are beginning to worry about this issue although they have yet to develop concrete proposals to address it.

Slow Growth in Incomes

Middle class incomes were growing slowly before the recession and have actually declined over the past decade.   In addition, according to the New York Times, the proportion of the population with incomes between $35,000 and $100,000 in inflation-adjusted terms fell from 53% in 1967 to 43% in 2013.  During the first four decades this was primarily because more people were moving into higher income groups, but more recently it was because they have moved down the ladder, not up.  One can define the middle class in many different ways or torture the data in various ways, but there is plenty of evidence that we have a problem.

What to Do

The most promising approach is what I call “the second earner solution.”  For many decades now, the labor force participation rate of prime age men has been falling while that of women has been rising.  The entry of so many women into the labor force was the major force propelling whatever growth in middle class incomes occurred up until about 2000. That growth in women’s work has now levelled off.  Getting it back on an upward track would do more than any policy I can think of to help the middle class.

Imagine a household with one earner making the average wage of today’s worker and spending full-time in the job market.  That household will have an income of around $34,000. But if he (or she) has a spouse making a similar amount, the household’s income will double to $68,000. That is why the President’s focus on a second-earner credit of $500, a tripling of the child care tax credit, expanding the Earned Income Tax Credit, and providing paid leave are so important. These policies are all pro-work and research shows they would increase employment.

No Marriage = No Second Earner

One problem, of course, is that fewer and fewer households contain two potential workers.  So it would also help to bring back marriage or at least its first cousin, a stable cohabiting relationship.  My ideas on this front are spelled out in my new book, Generation Unbound. In a nutshell, we need to empower women to not have children before they have found a committed partner with whom to raise children in a stable, two-parent family. Whatever the other benefits of two parents, they have twice as much time and potentially twice as much income.    

Other Needed Responses

Shouldn’t we also worry about the wages or the employment of men?  Of course.  But an increase in, say, the minimum wage or a better collective bargaining environment or more job training will have far smaller effects than “the second earner solution.”  In addition, the decline in male employment is related to still more difficult problems such as high rates of incarceration and the failure of men to take advantage of postsecondary education as much as women have. 

Still the two-earner solution should not be pursued in isolation. In the short-term, a stronger recovery from the recession is needed and in the longer-term, more effective investments in education, research, infrastructure, and in labor market institutions that produce more widely-shared growth, as argued by the Commission on Inclusive Prosperity. But do we really expect families to wait for these long-term policies to pay off?  It could be decades. 

In the meantime, the President’s proposals to make work more appealing to existing or potential second earners deserves more attention.  

This originally appeared in “Insight,” a publication of Grantmakers for Children, Youth, and Families.

For many in the United States, American poverty conjures images of urban blight or remote Appalachian hardship that motivated the War on Poverty in the 1960s. But the geography of poverty in the U.S. has shifted well beyond its historical confines (Kneebone and Berube, 2013). During the first decade of the 2000s, the poor population living in suburbs of the nation’s largest metropolitan areas for the first time outstripped the poor population living in central cities, and poverty continues to grow faster today in the suburbs.¹ This trend has been even more pronounced for those living below twice the federal poverty line—equivalent to $48,500 for a family of four in 2015—which roughly mirrors the population eligible to receive the federal Earned Income Tax Credit (EITC).

Although it was not originally billed as an antipoverty program, in its 40 years, the EITC has become one of the nation’s most effective tools for lifting low-income workers and their families above the poverty line. In 2013 alone, Brookings estimates that the EITC lifted 6.2 million people, including 3.1 million children, out of poverty (Kneebone and Holmes, 2014). What follows is a discussion of the EITC’s growing importance to recipients in light of the new geography of poverty, its role in boosting local economies, and how expanding participation in the program and paying the credit differently could enhance its effectiveness as a local economic stabilizer.

The shifting geography of poverty challenges traditional approaches to combat poverty through investments in place.

When President Johnson declared a War on Poverty in 1964, poverty in the U.S. was primarily urban or rural. This was also the case in 1975 when the EITC was created: Nearly a million more low-income individuals at that time lived in rural areas or big cities than in the suburbs of major metropolitan areas.² Place-based antipoverty interventions dating to the War on Poverty were thus designed with these two geographies—especially cities—in mind. Brookings estimates that today, the federal government spends about $82 billion per year across more than 80 place-focused antipoverty programs, spread across 10 agencies (Kneebone and Berube, 2013). Many are not well-suited to suburban contexts, for several reasons.

First, suburban poverty is more geographically diffuse than urban poverty. Suburban communities tend to be less densely populated than cities and larger in size, and cover more total area. Whereas centralized services might be appropriate in an urban context because they are easily accessible to many in need, it is more difficult to achieve those economies of scale in the suburbs, where residents live farther apart and have limited access to transit. Many competitive federal grant programs allocate points based on population served and population density, implicitly favoring large central cities.

Second, suburban municipalities may lack the experience and administrative capacity needed to sustain services for low-income families and communities. Cities have dealt with poverty longer, and have had more time to develop strategies and structures to support their poor populations. Some of this capacity stemmed explicitly from Community Action Agencies, one of the original War on Poverty programs, which was intended to spur local innovation. Small suburban communities by and large did not have this same experience. Because of their relatively small size, suburban governments may not be able to achieve the administrative scale needed to deliver effective safety-net programs.

Third, many suburban communities lack the economic scale and fiscal structure needed to fund services for low-income residents. Because many small municipalities are limited in how they are permitted to raise revenues—typically through a combination of property and sales taxes—they are especially prone to financial instability caused by the very economic conditions that also generate greater need for services. As poverty suburbanizes, small suburban communities simultaneously face rising demand and falling tax revenues to support those services. Moreover, tax “competition” among many small suburbs within a metro area can further erode the fiscal capacity and political will for these jurisdictions to support people in need.

The new geography of poverty makes direct investments in low-income individuals and families—like the EITC—even more important.

The mismatch between existing place-based antipoverty strategies and the places where poverty is growing fastest heightens the importance of investing directly and effectively in low-income individuals and families through programs such as the EITC. Following its expansion in the mid-1990s, the EITC became the most significant cash transfer program available to low-income working families. The Internal Revenue Service (IRS, 2014) estimates that approximately 79 percent of EITC-eligible taxpayers nationally claim the credit each year—a remarkably strong participation rate among federal safety-net programs.

The high program participation rate and growth over time in EITC expenditures reflects both increases in the credit’s generosity and growing need. In 2000, according to our analysis of IRS Stakeholder Partnerships, Education and Communities (IRS-SPEC) data, total EITC expenditures topped $42 billion (in 2013 dollars). In 2013, they approached $65 billion, equivalent to approximately 80 percent of the amount spent by the federal government on place-based poverty interventions.³

Analysis of IRS-SPEC data further suggests that the EITC’s geographic incidence closely tracks the shifting geography of need. From 2000 to 2013, the number of suburban filers claiming the EITC rose by 62 percent, compared to 33 percent in cities. Changes in the distribution of EITC claims mirrored changes in the location of poor and near-poor populations, particularly growth in the suburbs.⁴ And because lower-income suburban communities (where at least 40 percent of residents are poor or near-poor) are becoming more diverse, too—60 percent of their residents are non-white or Hispanic—the EITC also effectively reduces growing race-based income gaps in suburbs.⁵

EITC dollars support local economies.

The EITC benefits not only low-income families, but also the wider communities in which they live. Although it is widely regarded today as one of the country’s most successful antipoverty programs, the EITC was originally designed to be a temporary economic stimulus measure, in the Tax Reduction Act of 1975 (Nichols and Rothstein, 2015). During the 2000s, more local and state governments made a concerted push to expand participation in the EITC among eligible filers, in part to inject more federal dollars into their local economies (Berube, 2006a).

There are several mechanisms through which the EITC could benefit local economies. California State University researchers categorize the local economic impact of EITC refunds as the sum of direct effects (EITC recipients spending their refunds), indirect effects (business spending in response to EITC recipient spending), and induced effects (changes in household income and spending patterns caused by direct and indirect effects). Together, these effects represent the local “multiplier” effect (Avalos and Alley, 2010). Their estimates for California counties suggest that, in many cases, the credit creates local economic impacts equivalent to at least twice the amount of EITC dollars received.

Direct economic effects result from EITC recipients spending a portion of their refund locally, supporting local businesses and jobs. Consumer surveys show that low-income families spend a relatively large share of their income on groceries and other necessities, which tend to be purchased locally. Analysis of those surveys links tax refund season to increased likelihood of consumer activity as well as larger purchases (Adams, Einav, and Levin, 2009). People spend more, and more frequently, during tax refund season.

The EITC also supports local communities in less obvious ways. The concept of “tax incidence” reflects that the party being taxed, or receiving a tax credit, may not bear its full costs (or reap its benefits) because others shift their behavior in response to the tax. Along these lines, Jesse Rothstein estimates that as much as 36 cents of every dollar of EITC received flows to employers, because by enabling workers to better make ends meet on low wages, the credit effectively lowers the cost of labor. Those lower labor costs may, in turn, allow local employers to hire more local workers (Nichols and Rothstein, 2015).

Finally, emerging evidence suggests that progressive tax expenditures like the EITC can enhance intergenerational income mobility for local children, possibly by counteracting credit constraints that many low-income families face (Chetty, Hendren, Kline, and Saez, 2015). In areas with larger state EITCs, low-income children are more likely to move up the income ladder over time.

The local impact of the EITC depends on how, and how many, eligible filers claim the credit.

The local impact of the EITC also depends on whether eligible workers and families file tax returns and claim the credit. As noted above, the IRS estimates that 79 percent of those eligible to receive the EITC nationally claim it. Given local variation in characteristics associated with uptake, there is likely also considerable local variation in EITC participation (Berube, 2005). Efforts to increase participation locally can thus increase the level of investment communities receive from the program.

Research has identified several factors associated with EITC participation rates among the eligible population. Eligible filers less likely to claim the credit include those who live in rural areas, are self-employed, do not have qualifying children, do not speak English well, are grandparents, or recently changed their filing status (IRS, 2015). One study suggests that communities with moderately sized immigrant populations may exhibit lower EITC participation rates, due perhaps to less robust social networks or more dispersed/heterogeneous populations that may limit awareness of the credit (Berube, 2006b).

Recent research also suggests that EITC participation is higher in areas with more tax preparers, who may promote greater local awareness of the credit (Chetty, Friedman, and Saez, 2012). While individuals who enlist the help of tax preparers are more likely to receive the EITC, they may face significant fees that blunt the credit’s overall impact (Berube, 2006a). Expanding access to volunteer tax preparation services or simple, free online filing could help preserve more of the credit’s value for low-income families and their communities.

To maximize the EITC’s role as a local economic stabilizer, we should consider periodic payment options.

 The EITC already functions as an important antipoverty tool for low-income workers and families, and a boon to local economic stability. Communities should nonetheless be interested in efforts to connect taxpayers to a portion of their EITC throughout the year, rather than only as a lump-sum refund at tax time.

Debt features significantly on the balance sheets of EITC recipients. Recent research finds that about 95 percent of EITC recipients have debt of some kind, and that large shares of refunds are dedicated to debt payments or deferred expenses (such as car repair). Recipients do not use the majority of EITC refunds to pay for monthly expenses, despite the fact that their wages typically cover only two-thirds of those expenses (Halpern-Meekin, Edin, Tach, and Sykes, 2015).

Paying a portion of filers’ anticipated EITC periodically (and directly, rather than through employers like the defunct Advance EITC program) in smaller amounts over the course of a year could help them cope with these spending constraints and avoid taking on debt (Holt, 2008). By enabling families to better keep up with spending on regular items most often purchased locally—rent, food, vehicle maintenance—periodic payments could also support local economies. And by improving families’ liquidity, such payments could reduce reliance on high-cost financial products such as payday loans.

The EITC continues to gain importance as place-based strategies lag behind poverty’s suburbanization, and communities seek ways to maximize public investment in the face of budget constraints at all levels. The program lifts millions of working individuals and families out of poverty each year regardless of their location, and in doing so also supports community financial stability. An expanded EITC—at the federal, state, or local level—with options for periodic payment and better alternatives to high-cost tax preparation could provide even stronger support to low-income families and the places where they live.

References

Adams, W., Einav, L., and Levin, J. (2009). Liquidity constraints and imperfect information in subprime lending. American Economic Review. 99(1), 49–84. Retrieved from http://web.stanford.edu/~jdlevin/Papers/Liquidity.pdf

Avalos, A., and Alley, S. (2010). The economic impact of the Earned Income Tax Credit (EITC) in California. California Journal of Politics and Policy. 2(1). Retrieved from http://escholarship.org/uc/item/2jj0s1dn

Berube, A. (2005). Earned income credit participation—What we (don’t) know. Washington, DC: Brookings Institution. Retrieved from http://www.brookings.edu/metro/eitcparticipation.pdf

Berube, A. (2006a). Using the Earned Income Tax Credit to stimulate local economies. Washington, DC: Brookings Institution. Retrieved from http://www.brookings.edu/~/media/research/files/reports/2006/11/childrenfamilies-berube/berube20061101eitc.pdf

Berube, A. (2006b). ¿Tienes EITC? A study of the Earned Income Tax Credit in immigrant communities, Washington, DC: Brookings Institution. Retrieved from  http://www.brookings.edu/~/media/research/files/reports/2005/4/childrenfamilies-berube02/20050412_tieneseitc.pdf

Chetty, R., Friedman, J., and Saez, E. (2012). Using differences in knowledge across neighborhoods to uncover the impacts of the EITC on earnings (NBER Working Paper Series no. 18232). Retrieved from http://eml.berkeley.edu/~saez/chetty-friedman-saezNBER13EITC.pdf

Chetty, R., Hendren, N., Kline, P., and Saez, E. (2015). The economic impacts of tax expenditures: Evidence from spatial variation across the U.S. Retrieved from http://www.irs.gov/pub/irs-soi/14rptaxexpenditures.pdf

Halpern-Meekin, S., Edin, K., Tach, L., and Sykes, J. (2015). It’s not like I’m poor: How working families make ends meet in a post-welfare world, Oakland, CA: University of California Press.

Holt, S. D. (2008). Periodic payment of the Earned Income Tax Credit. Washington, DC: Brookings Institution. Retrieved from http://www.brookings.edu/research/papers/2008/06/0505-metroraise-supplement-holt

Internal Revenue Service. (2014). Statistics for tax returns with EITC. Retrieved from http://www.eitc.irs.gov/EITC-Central/eitcstats

Internal Revenue Service. (2015). About EITC. Retrieved from http://www.eitc.irs.gov/EITC-Central/abouteitc

Kneebone, E., and Berube, A. (2013). Confronting suburban poverty in America. Washington, DC: Brookings Institution Press.

Kneebone, E., and Holmes, N. Fighting poverty at tax time through the EITC. Retrieved from http://www.brookings.edu/blogs/the-avenue/posts/2014/12/16-poverty-tax-eitc-kneebone-holmes

Nichols, A., and Rothstein, J. (2015). The Earned Income Tax Credit (EITC) (NBER Working Paper Series no. 21211). Retrieved from http://www.nber.org/papers/w21211.pdf

From its modest beginnings in 1975, the Earned Income Tax Credit has grown into one of the nation’s most effective anti-poverty programs. Each year, the EITC supplements low-income workers’ earnings, encouraging work and lifting millions of people out of poverty.¹ It has positive lasting effects for parents, who have shown longer-run earnings increases and better health outcomes. At the same time, their children exhibit a host of benefits, from better school performance and higher rates of college enrollment to more hours worked and higher incomes in adulthood.² 

Moreover, the EITC supports economic stability in communities throughout the country where filers collectively receive millions of dollars in earnings supplements annually.³ These successes stem from a series of targeted expansions—supported by both Republicans and Democrats—over the EITC’s 40-year history, transforming it from a small credit into a significant income supplement for low-income working families.⁴

Yet more can be done to preserve and build on the effectiveness of the EITC, and a growing number of elected officials and policy experts have proposed  strengthening the credit. Three main recommendations have emerged from these proposals.

Preserve two key provisions of the EITC that are set to expire in 2017;

Expand the credit for workers without qualifying children; and

Offer filers options to receive a portion of the credit outside of tax time.

In this brief, we consider the first two recommendations, using our MetroTax model and detailed microdata from the 2014 American Community Survey to estimate the impact of these potential changes on workers and on the metropolitan areas and states where they live.⁵ A new analysis by Steve Holt will take an in-depth look at the issue of periodic payment.

If two key EITC provisions expire in 2017, 7.4 million filers would lose part or all of their EITC.

In 2009, Congress and the Obama administration enacted two targeted, but temporary, expansions to the EITC. The legislation reduced the “penalty” for married couples filing jointly by extending their eligibility for the credit $5,000 beyond that for unmarried filers, and it boosted the credit for families with three or more children (who are more likely to be low-income even when working).

If those provisions expire in 2017, the EITC would shrink for 6.7 million taxpayers, while a little under 700,000 filers would lose eligibility altogether. Two-thirds of filers who would be affected are married couples, 1.8 million of whom are also raising more than two kids (meaning they would be subject to both cuts). The remaining third are unmarried workers with at least three children. Most of these taxpayers (58 percent) have a high school diploma or less, and they are most likely to work in manufacturing, construction, and retail. The typical adjusted gross income of these filers is $28,000 a year, just above the poverty line for a family of four (roughly $24,000 in 2014).

States and metro areas in the Midwest and West would see the steepest cuts if these provisions expire. 

Every state stands to lose millions of dollars if these EITC provisions are not made permanent. States and metro areas with higher-than-average shares of married couples and larger families would be hardest hit. In the Intermountain West, Idaho and Utah could see a 10 percent drop in federal EITC dollars coming into the state (Table 1). The major population centers in those states—including metropolitan Provo and Ogden in Utah and Boise, Idaho—top the list of major metro areas that would experience the biggest cuts if these provisions expire.

While larger states like California and Texas would see their EITC claims drop by smaller percentages, the size of the EITC-eligible population in these states mean that the expiration of these two provisions would translate into a loss of more than half a billion dollars in California ($538 million) and over $400 million in Texas. Taxpayers in the Los Angeles metro area stand to lose an estimated $185 million in EITC receipts, while those in Dallas would forfeit nearly $100 million. (For detailed state and metro data see the appendix.)

Expanding the credit for workers without qualifying children would benefit more than 14.4 million filers. 

The EITC for childless workers is significantly smaller than the credit for families with children. In tax year 2013 (the most recent year for which detailed data are available), workers with qualifying dependents received $2,794 on average through the EITC, compared to the meager $281 claimed by the average childless worker.⁶ In fact, low-wage earning childless adults are the only group of taxpayers actually taxed into (or deeper into) poverty by the federal tax system.⁷

Both President Obama and House Speaker Paul Ryan have proposed expanding the EITC for these workers, as have legislators—including Sen. Patty Murray (D-Wash.), Rep. Richard Neal (D-Mass.), and Rep. Barbara Lee (D-Calif.)—and Republican presidential candidate Jeb Bush.⁸ (Republican presidential candidates Ted Cruz and John Kasich have also called for the EITC to be expanded but have not specified whom that expansion would target.⁹)

The proposals put forward by Obama, Ryan, Lee, and Bush are strikingly similar (although they differ considerably in how they would pay for it). These expansions would double the size of the credit for childless workers and the pace at which the credit phases in and out (Figure 1). They would also lower the minimum age of eligibility from 25 to 21.¹⁰

Together, these changes would boost the value of the credit for 8 million filers and extend eligibility to 6.4 million more taxpayers, increasing EITC dollars for these workers by $6.9 billion.¹¹

The filers who would benefit from these changes are largely unmarried workers (87 percent) who are most likely to be employed in service industries (retail, accommodation and food service, administrative services), health care, and construction. Half of these workers have a high school diploma or less. The typical adjusted gross income for these workers is just $8,300, well below the poverty threshold for individuals and married couples without children (e.g., $12,316 and $15,853, respectively, in 2014).

Several states and large metro areas in the Midwest and Northeast would see the number of childless workers eligible for the EITC more than double if the credit were expanded. 

The District of Columbia and Utah, each of which has above-average shares of the population between 21 and 24, would experience the largest percentage growth in the number of childless workers eligible for the EITC (135 and 134 percent, respectively). However, the bulk of states that would double their pool of eligible filers without qualifying children fall in the Midwest (North Dakota, Iowa, Nebraska, and Wisconsin) and Northeast (Rhode Island, Massachusetts, and Vermont), and tend have higher-than-average shares of one-person households and households without children.

Similarly, while the number of EITC-eligible childless workers in the Provo metro area would more than triple if the credit were expanded, most of the major metro areas that would at least double the number of eligible workers without qualifying children are in the Midwest (e.g., Grand Rapids, Milwaukee, and Toledo) and Northeast (e.g., Bridgeport, Boston, and Springfield) (Map 1).

In this era of partisan gridlock in Washington, it is rare to find a policy with the kind of bipartisan support the EITC has received—a testament to its effectiveness in encouraging work, alleviating poverty, and improving outcomes for workers and their children. By preserving key provisions of the EITC for working families and by making the EITC work better for workers without qualifying children, millions of Americans across the country stand to benefit.

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• State and Metro Data Appendix

Each year, one in five households filing a federal income tax return claims the Earned Income Tax Credit (EITC). Targeted primarily to lower-income workers with children, it is one of many credits and deductions filers take each year on their federal income tax forms. However, unlike typical credits and deductions, the EITC is a refundable credit, meaning that after offsetting what is owed to the government filers receive the remainder of the benefit as a refund.

By supplementing earnings for low- and moderate-income households, the EITC helps bridge the gap between what the labor market provides and what it takes to support a family. It encourages and rewards work and has become one of the nation’s largest and most effective anti-poverty programs. In contrast to other work support and poverty alleviation programs, it achieves this with very little bureaucracy beyond what otherwise exists to administer the tax code.

Although the EITC began in 1975 as a small credit (no more than $400), a number of targeted expansions in subsequent years mean that today the EITC’s assistance can be considerable. In 2015, a single parent with three children working full-time all year at the federal minimum wage ($7.25 an hour) is eligible for a credit of $6,242, a boost of more than 40 percent above her earnings of $15,080 (though combined it still leaves her 12 percent below the federal poverty level).

However, the only way to obtain these substantial benefits is to claim the EITC on the annual federal income tax return. While lump-sum payments have perceived benefits (such as being able to pay off debts, make larger purchases, or force savings), the EITC’s single annual disbursement can present a challenge for the working parent trying to make ends meet throughout the year. It can also be problematic for households wanting to stretch out their refund as an emergency savings reserve.

My 2008 paper, “Periodic Payment of the Earned Income Tax Credit,” proposed an option that would allow a family to receive a portion of the EITC outside of tax time, striking a balance between lump-sum delivery and the need for resources throughout the year. Specifically, half of the credit could be claimed in four payments spread out during the year, while the remaining credit would continue to be paid as part of the tax refund.

Since then, several significant developments have occurred. A little-used option for receiving some of the EITC in each paycheck ended in 2010. In 2014, the federal government initiated a new tax credit advance payment process to subsidize health insurance premiums through monthly disbursement of the Affordable Care Act’s Premium Tax Credit. Other countries providing assistance similar to the EITC have continued to innovate and offer access to benefits during the year. Finally, members of Congress and think tanks have proposed alternatives to a single lump-sum disbursement of the EITC, and others have begun to explore and experiment with alternatives, most notably in Chicago, where a 2014 pilot program made quarterly payments to 343 households.

In light of these developments, this paper reviews the author’s original EITC periodic payment proposal, examines emerging alternatives, and addresses the following key questions:

• What is the demand for periodic payment alternatives?
  
  
• What benefits will accrue from the availability of periodic payment?
  
  
• What risks are associated with periodic payment and how can they be managed?
  
  
• What is the administrative feasibility of periodic payment?

The emerging answers point a way forward for identifying different distribution options that would enhance the EITC’s value to low- and moderate-income working families.

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• Report

The Earned Income Tax Credit (EITC) supports millions of single parents and their children each year. Although the majority of these are single moms, Father’s Day provides a good reminder that single dads are also a significant part of the equation.

Using Brookings’ MetroTax model, we estimate that roughly half (49 percent) of all EITC-eligible tax filers in 2014 filed as head of household—a group that includes many single custodial parents. Of these estimated 13.1 million filers, 8.9 million were women, and 4.2 million were men. These female-headed households included an estimated 14.7 million qualifying children, while their male counterparts included 6 million qualifying children.

Although women head of household filers were more likely to be EITC-eligible (69 percent), male heads of household were not far behind, with an estimated 61 percent eligible to receive the EITC in 2014.

To learn more about the EITC-eligible population, visit Brookings’ EITC data interactive.

The breakthrough therapy designation (BTD) program was initiated by the U.S. Food and Drug Administration (FDA) in 2012 to expedite the development of treatments for serious or life-threatening illness that demonstrate “substantial improvement” over existing therapies. The program has since become a widely supported mechanism for accelerating patient access to new drugs. As of March 2015, FDA has received a total of 293 requests for BTD. However, it has granted just  82 (28%), which indicates an ongoing lack of clarity over what exactly meets the criteria for the designation.

On April 24, the Center for Health Policy at Brookings convened a public meeting to explore the designation’s qualifying criteria and how FDA applies those criteria across therapeutic areas. Panelists used real-world and hypothetical case studies to frame the discussion, and highlighted major considerations for the application process, the FDA’s evaluation of the evidence, and the key factors for acceptance or rejection. The discussion also identified strategies to ensure that qualifying criteria are well understood. Here are the five big takeaways:

1.  The BTD program is viewed positively by drug companies, researchers, advocates, and others 

Across the board, participants expressed enthusiasm for the BTD program. Industry representatives noted that their experience had been extremely positive, and that the increased cooperation with and guidance from FDA were very helpful in streamlining their development programs. Receiving the designation can also raise a drug company’s profile, which can facilitate additional investment as well as clinical trial patient recruitment; this is particularly important for smaller companies with limited resources.

Patient and disease advocates were likewise supportive, and expressed hope that the early lessons learned from successful breakthrough therapy approvals (which have been mostly concentrated in the oncology and antiviral fields) could be translated to other disease areas with less success. However, while BTD is an important tool in expediting the development of new drugs, it is just one piece of broader scientific and regulatory policy landscape. Accelerating the pace of discovery and development of truly innovative new drugs will depend on a range of other factors, such as developing and validating new biomarkers that can be used to measure treatment effects at an earlier stage, as well as establishing networks that can streamline the clinical trial process. It will also be important to develop effective new approaches to collecting, analyzing, and communicating information about these treatments once they are on the market, as this information can potentially be used by FDA, providers, and patients to  further improve prescription drug policy and medical decision-making.

2.  BTD requests far outnumber those that actually meet the qualifying criteria

Since the program began, less than 30 percent of requests have received BTD designation. A substantial majority were denied at least in part due to either a lack of data or problems with the quality of the data, or some combination of the two. For example, some sponsors requested the designation before they had any clinical data, or submitted the request using clinical data that was incomplete or based on flawed study designs. Many requests also failed to meet the Agency’s bar for “substantial improvement” over existing therapies.

One reason for the high denial rate may be a lack of a clear regulatory or statutory bar that could be used as a definitive guide for sponsors to know what is needed to qualify for the designation. BTD denials are also confidential, which means that sponsors effectively have nothing to lose by submitting a request. Going forward, manufacturers may need to exercise more discretion in deciding to request the designation, as the process can be resource- and time-intensive for both sides.

3.  There is no single threshold for determining what defines a breakthrough therapy

About 53 percent of the 109 total BTD denials were due at least in part to the fact that the drug did not represent a substantial improvement over existing therapies. During the day’s discussion, FDA and sponsors both noted that this is likely because the criteria for BTD are inherently subjective. In practice, this means there is no clear threshold for determining when a new therapy represents a “substantial improvement” over existing therapies. Designation decisions are complex and highly dependent on the context, including the disease or condition being targeted, the availability of other treatments, the patient population, the outcomes being studied, and the overall reliability of the data submitted. Given the multiple factors at play, it can be difficult in some cases to determine when a new product is potentially “transformational” as opposed to “better,” especially for conditions that are poorly understood or have few or no existing treatments. In making its determinations, FDA considers the totality of the evidence submitted, rather than focusing on specific evidentiary requirements.

4.  Early communication with FDA is strongly recommended for BTD applicants

Roughly 72 percent of the BTD denials related at least in part to trial design or analysis problems, which led several people to suggest that sponsors engage with FDA prior to submitting their request. Though there are several formal mechanisms for interacting with the agency, informal consultations with the relevant review division could help sponsors to get a better  and much earlier sense of what kind of data FDA might need. This early communication could both strengthen viable BTD requests and reduce the number of frivolous requests.

5.  FDA may need more resources for implementing the BTD program

EXECUTIVE SUMMARY

Parents, educators, government ministers and policymakers in all contexts and countries around the world are concerned with learning and how to improve it. There are many reasons for this, but none is more important than the fact that learning is at the heart of success at the individual, community and global levels. Learning First is the title of this report, with the strong implication that learning should be the foremost goal of education policies worldwide.

The present review seeks not only to explain why this is the case but also focuses on what we need to know—that is, what research is needed—in order to improve learning in the decades to come, particularly among those children most in need. This question is addressed in the following six sections.

1. Learning Goals and Research. The first section begins with a historical synopsis of international education goals put forward in 1990 at the World Conference on Education for All in Jomtien (Thailand), in 2000 at the Education for All conference in Dakar, and later in 2000 as a part of the UN Millennium Development Goals for 2015. In 2011, the Center for Universal Education at the Brookings Institution published A Global Compact on Learning: Taking Action on Education in Developing Countries, which stated that there is a “global learning crisis—which affects children and youth who are out of school with limited learning opportunities and those who are in school but not learning the skills they need for their futures.” The present review of learning research in low-income countries follows from that report. The overall purpose is to explore the most pressing learning issues today that require further research attention in the years to come.
    
2. Learning Definitions and Contexts. This section reviews how the field of education has defined learning over the years. Here, learning is defined as a modification of behavior due to experience—such as in knowledge, skills, attitudes and values. Three main principles of effective learning are suggested: individual active involvement, social participation, and meaningful engagement. As a way to emphasize the importance of learning contexts, three individual stories—Illa, a four-year-old Quechua-speaking girl in Peru; Pawan, an eight-year-old primary school student in urban India; and Rachida, a young illiterate woman in rural Morocco—are provided in order to better explain the importance of learning as a culturally specific phenomenon. These stories help to illustrate a more general learning framework, encompassing the relationship between two dimensions of learning—its processes and contexts. A discussion follows concerning the need to disaggregate learners and their learning contexts—between countries and within countries—as a way to overcome frequent and simplistic generalizations about how the “average” child learns.
    
3. Global Change and the Contexts of Learning. This section considers the issue of global change on how learning and learning contexts are being transformed around the world. For example, researchers need to pay more attention to the impact of migration on children’s learning and on educational systems more broadly. In each instance of translocation, children confront the challenges of adapting to a new environment that may include different languages, dialects or cultures within the nonformal learning contexts of daily life. Similarly, in formal education contexts, student migrants have to cope with contrasts in culture, lifestyle and language of schooling, and demonstrate skills and achievement that may vary dramatically with their culture of origin. Other changes due to globalization include increased multilingualism in schools, growing overcrowding in classrooms, inability to keep up with teacher training, changes in intergenerational learning, and the growing importance of 21st-century skills. Based on these observations, it is suggested that learning contexts and needs should be understood as a shifting target.

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INTRODUCTION

With fewer than three years until the planned end-date of the United Nations Millennium Development Goals (MDGs), attention is rapidly turning to what will follow. The elaboration of the next global development agenda is a complex, multi-pronged process that is academic, political and practical, involving experts from a myriad of social and economic sectors and representing a cross-section of constituencies. While the formal U.N. process is still in the early stages, the ongoing discourse (predominantly occurring in the global north, but not exclusively) has introduced several potential frameworks for this agenda. This paper describes the leading frameworks proposed for the post-2015 global development agenda and discusses how education and learning fit within each of those frameworks. While many within the education community are working to develop a cohesive movement to advance an “access plus learning” agenda, it remains equally important to engage proactively with the broader development community to ensure that education fits within the agreed upon overarching organizing framework.

The frameworks described below represent a snapshot of current thinking in 2012. On the road to 2015, the education community will need to refine and sharpen its thinking with respect to how learning is incorporated into the prevailing framework. The seven frameworks that will be addressed in this paper are:

1. Ending Absolute Poverty
2. Equity and Inclusion
3. Economic Growth and Jobs
4. Getting to Zero
5. Global Minimum Entitlements
6. Sustainable Development
7. Well-Being and Quality of Life

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INTRODUCTION

In an earlier policy brief, Where is the Learning? Measuring Schooling Efforts in Developing Countries, we drew attention to what was labeled “the global learning crisis.” While tremendous progress has been made over the past couple of decades to get tens of millions of additional children to enroll in school, progress in improving learning outcomes has been considerably less impressive. Although, shockingly, comprehensive learning outcome data are not available for most of the developing world, the many small scale, local or, in some cases, national studies that have been done show a dismal picture. For instance, Uwezo, an East African initiative, found that in Tanzania, only 44 percent of students in Grade 4 were able to read a basic story from Grade 2. Similarly, the Annual Status of Education Report (ASER) facilitated by Pratham found that in rural India, less than half of Grade 4 students were able to do basic subtraction. These examples demonstrate the gravity of “the global learning crisis” as students fail to master competencies appropriate for their grade level, hindering the development of life skills and success in further schooling, as well as performance in the labor market.

With about 61 million children in the developing world still not yet in school, it is too early to declare victory on the “enrollment agenda”. But we would do a disservice to the 250 million children around the world who fail to reach Grade 4 or attain minimum learning standards, if we don’t step up efforts to improve learning outcomes.

This policy brief is part of a larger effort to link resources in the education sector with outcome measures. As we have documented elsewhere, few countries systematically collect comprehensive financial data on education, although fortunately an increasing number of initiatives is trying to address this issue by producing, for instance, National Education Accounts (NEAs). When the focus of the sector changes from enrollment to enrollment plus learning, efforts to better grasp the size and use of financial resources should evolve accordingly. For instance, much learning takes place outside of the classroom, especially in the early years. For NEAs to be a useful tool for adjusting the allocation of scarce resources, the “learning” sector should be defined more broadly than the education or “schooling” sector. We will address this and related issues in a subsequent policy brief.

Once our focus becomes enrollment plus learning, we have to broaden our view and look at the entire environment in which a child develops skills, starting with the households in which children are born. It has beenknown for many decades and throughout the world, that among the best predictors of future school performance are some basic household characteristics, such as income and mother’s education level.

Data from international assessments also show a relationship between income and educational performance, exemplified by intra and intercountry results. In Colombia, average Trends in International Mathematics and Science Study (TIMSS) math scores at Grade 8 for the richest quintile of students were close to 100 points higher than those from the poorest quintile. On the other hand, the difference in average scores between the poorest quintile in the United States and the richest quintile in Colombia was about 50 points. Income is not the only predictor of success, as exemplified in Peru, where children whose mothers have completed primary school and whose maternal language is Spanish rather than an indigenous language, have a greater probability of reaching the appropriate school grade for their age. In Kenya, Uwezo found that the higher their father’s educational attainment, the more likely children were able to read a story at Grade 3 or attend extra tutoring sessions.

In addition, the larger environment (such as the village or the urban neighborhood) in which the young child grows up also has a major and lasting impact. In Tanzania, urban students in Grade 3 are three times more likely than their rural counterparts to meet standards in literacy and numeracy. Related to the impact of the larger environment, data from Nigeria suggest that girls are more disadvantaged in school attendance, as parents may be reluctant to send girls to school because of perceived fears for their safety while traveling and concerns about the physical strength required for walking the distance.

Clearly, especially in the early years, most learning takes place outside of the classroom. Consequently, children who grow up in deprived circumstances will start life with a disadvantage leading to a lack of learning in the early grades, which will have lifetime effects.

In the next section, we will summarize the evidence that the early years (ages 0 to 5) are crucial for subsequent learning achievements. From this evidence we conclude that many of the problems with learning outcomes in the developing world (and in many developed countries) need to be addressed well before school age. Before delving into what happens in schools, we explore the relationship between enrollment, learning and dropout. As the crux of this brief is to lay out the evidence on what contributes to learning, we must acknowledge the factors leading to low enrollment and dropout. Next, we turn our attention to what happens in schools and what can be done to improve these activities, as well as try to summarize the evidence about the relationship between specific school-based inputs and learning outcomes. As it turns out, this evidence is, in many cases, rather feeble. Therefore, we will first focus on school-level inputs that are necessary for a good learning environment, i.e. without which we cannot expect any learning to take place. Most of these inputs are rather obvious, but they are worth mentioning. Subsequently, we will discuss additional inputs that have proven to contribute to learning outcomes in some cases, but not in others. Clearly how these inputs are applied matters.

Next, we address factors that contribute to learning outside of a formal environment, after which we review issues in health and nutrition that are closely linked to learning outcomes. We then review the need for the collection and dissemination of learning assessments in order to impact further improvements in these areas and we try to answer the question: what are the building blocks for an education sector that promote learning? Finally we explore needs for future research in learning.

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Globalization has been hugely beneficial to Asia. Japan, South Korea, Taiwan, Malaysia, Singapore, Hong Kong, Thailand, and China have reaped lasting benefits from worldwide investment flows, knowledge exchanges, and rapid economic growth. And while globalization undoubtedly made the rich even richer, the poor also benefitted.

Several Asian economies saw the emergence of a large middle class and the virtual elimination of poverty. The rural poor received higher wages after finding better quality manufacturing jobs in urban centers. And with improvements in technology and expanded trade, there was optimism about job prospects. In ethnically diverse societies such as Malaysia, globalization contributed significantly to the reduction of racial tensions rather than exacerbate them, contrary to what is happening in the West.

There is no question that the West has also benefited from globalization. The United Kingdom and the United States have seen huge gains in the services sector, especially in financial services. However, the accompanying income inequality is of a different hue than in Asia. Younger, better educated workers located in cosmopolitan urban centers such as New York and London have seen a phenomenal increase in their income. On the other hand, older, less educated workers in the rusting industrial belts of northern England and America have lost their jobs to manufacturers overseas. Instead of jobs with good growth prospects enjoyed by several generations in the past, the quality of jobs has deteriorated and there is little hope among the rust belt’s working class that this situation can be turned around. Worst, there is a perception that politicians don’t care. The recent voting patterns in the U.S. and the U.K. are a clear reflection of this despondence.

How did Asia achieve a shared prosperity from globalization with consistent domestic political support while the rich countries have struggled and are suffering the political blowback? 

The answer may lie in the heavy investment made by Asian governments in human capital (education and health) to prepare the workforce to take advantage of the high wage manufacturing jobs created by globalized investment. This was complemented by public investment in infrastructure to continue to attract foreign investment. The fiscal deficits associated with large public investment in human capital and physical infrastructure were tolerated because the political and economic benefits of preparing the workforce for new jobs were considered worthwhile objectives.

Both the U.S. and the U.K, in contrast, have underinvested in infrastructure and in “skilling up” the labor force to make the transition to new and better jobs from the ones lost to lower wage workers in Asia.  In the U.K, it happened under the watch of the incumbent conservative government. While presenting to Parliament the result of the recent referendum to the European Union, Prime Minister David Cameron spoke proudly of leaving behind a sound economy resting on the pillar of a sharp fiscal retrenchment—low taxes and even lower public expenditure. One result of this “sound” economy is that a large number of people are stuck in dead-end jobs and are looking for opportunities to vent their frustration.

In the U.S., the Obama administration has been hemmed in by the recalcitrant Republican Congress. Badly needed public investment in health and education to prepare workers and an overdue upgrade of infrastructure to attract investment have been thwarted by a Congress wedded to fiscal austerity. This has prolonged the pain of transition to new jobs.

The long and painful transition to productive jobs has resulted in the clamor for reneging on globalization commitments. This is misplaced because protecting jobs that are best done elsewhere is not possible without putting curbs on investment. That would be moving towards a world that globalizes misery. There is thus no alternative to a proactive government that eases the transition to new jobs in rich countries.

Of course, Asia had the advantage of preparing its work force for known job streams. Rich countries, on the other hand, have to discover new productive jobs. However, we do know that discovery is more likely if education standards improve, physical infrastructure is cutting edge, and science and research are well-funded.  

Rich countries don’t have to give up on manufacturing as a source of employment. Germany has shown the way to creating high-end manufacturing jobs in a rich-country setting. It has a highly skilled work force that produces technology-intensive products which generate a large trade surplus. There is little support in Germany for reneging on global commitments.

Dying cities, dead-end jobs, and a seemingly uncaring government feed into the perception that living standards will continue to fall. Demagogues exploiting ethnicity point the finger at immigrants and have succeeded in directing rich-country worker ire at them. This is a far cry from the democratic vision rich democracies should aspire to and is not in any away a solution to these problems.  The protest should be aimed, instead, at elected governments to play their role in facilitating the transition to the next generation of jobs.     

The world has paid heavily for Europe’s nationalistic ambitions—colonial subjugation of Africa and Asia and the two world wars are the most egregious examples. The EU is an attempt to tame those impulses by seeking to cooperatively address common challenges instead of competing for narrower nationalistic objectives. The dissolution of the EU and the weakening of other multilateral institutions because of rich countries’ failure to rise up to the globalization challenge would be truly retrogressive. 

Event Information

Seven years ago, New Zealand recognized that if its people did not have sufficient assets as they aged, they would either face economic stress in retirement or place pressure on the government for costly additional benefits, and thus the KiwiSaver program was born. Designed to help citizens build retirement security, it guides individuals with limited financial experience while also giving them complete control of their finances. Benefits of this national automatic enrollment retirement savings plan include a $1,000 kick-start, employer contributions, and an annual tax credit. New Zealand Since its inception in July 2007, KiwiSaver has been deemed a great success, with over half of the eligible population as members, and over 70 percent of 18-24 year olds participating. Although membership continues to grow, it is at a slower rate than that seen in previous years.

Could the success of KiwiSaver mean that a similar program – at either the national or state level – might work here? On July 8^th, Diana Crossan, former Retirement Commissioner for New Zealand, will offer her insights into the KiwiSaver program and its impact on New Zealand saving, retirement security, and financial literacy. Ben Harris and David John, deputy directors of the Retirement Security Project at Brookings, will reflect on the role such a program might play in the U.S.

Email international@aarp.org to RSVP » 

Event Information

On Wednesday, June 2, the Center for Universal Education at Brookings hosted a discussion on the need to refocus the international education dialogue from school enrollment to learning achieved in developing countries. Participants, who included education experts from academia, international organizations and government, assessed the current state of systematic efforts at the global level to measure learning outcomes.

Center for Universal Education Co-Director and Senior Fellow Jacques van der Gaag opened the event by charting the landscape of learning, including education outside the primary school classroom, during early childhood development and the importance of acquiring both cognitive and non-cognitive skills for ensuring learning outcomes.

View the event summary »

Event Materials

• 20100602_education_learning_presentation_clarke
• 20100602_education_learning_presentation_gove
• 20100602_education_learning_presentation_naidoo
• 20100602_education_learning_presentation_savelyev
• 20100602_education_learning_presentation_woessman

INTRODUCTION—

Achieving universal education is a twofold challenge: to get children and youth into school and then to teach them something meaningful while they are there. While important progress has been made on the first challenge, there is a crisis unfolding in relation to learning. Around the world, there have been major gains in primary school enrollment partly due to the United Nations’ Millennium Development Goals and the abolition of school fees by many national governments. However in many countries, students are spending years in school without learning core competencies, such as reading and writing. To address this learning crisis, the global community and national governments need to place a much greater focus on the ultimate objective of education—to acquire knowledge and develop skills.

This shift in focus away from just enrollment to enrollment plus quality learning requires measuring learning outcomes. However, the global education community is not yet systematically using effective instruments for measuring primary school learning in low- and middle-income countries. This policy brief reviews the global efforts among the primary donors to support the measurement of learning outcomes. It then suggests steps needed to transition global education policy into a new paradigm of enrollment plus quality learning, which includes: scaling up the implementation of national education accounts and national assessment systems; increasing attention to monitoring early learning during child development to improve readiness for school; and expanding the systematic use of simple assessments of basic cognitive functions in the early grades to help teachers improve their practice.

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Financial Data as Driving Force Behind Improved Learning

During the past decade, school enrollments have increased dramatically, mostly thanks to UNESCO’s Education for All (EFA) movement and the UN Millennium Development Goals. From 1999 to 2008, an additional 52 million children around the world enrolled in primary schools, and the number of out-of-school children fell by 39 million. In Sub-Saharan Africa alone, enrollment rates rose by one-third during that time, even with large population increases in school-age children.

Yet enrollment is not the only indicator of success in education, and does not necessarily translate into learning. Even with these impressive gains in enrollment, many parts of the world, and particularly the poorest areas, now face a severe learning crisis. The latest data in the EFA Global Monitoring Report 2011 reveal poor literacy and numeracy skills for millions of students around the world. In Malawi and Zambia, more than one-third of sixth-grade students had not achieved the most basic literacy skills. In El Salvador, just 13 percent of third-grade students passed an international mathematics exam. Even in middle-income countries such as South Africa and Morocco, the majority of students had not acquired basic reading skills after four years of primary education. Although the focus on children out of school is fully justified, given that they certainly lack learning opportunities, the failure to focus on learning also does a disservice to the more than 600 million children in the developing world who are already in school but fail to learn very basic skills.

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Despite the notable success in enrolling children in primary school over the past decade, the education agenda is unfinished as millions of children are still excluded from learning opportunities and millions more leave school without having acquired the essential knowledge and skills needed to participate in society.

On January 27, the Center for Universal Education at Brookings hosted a half-day conference that focused on the research examining “what works in education” to achieve improved learning opportunities and outcomes. In addition to hearing from researchers studying the effectiveness of various education strategies, participants discussed how to facilitate a future research agenda that could have the most meaningful impact on learning. Senior Fellow Jacques van der Gaag moderated the discussion.

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Transcript

• Improving Education in the Developing World: Evidence from Randomized Evaluations Presentation (.pdf)
• Sociocultural Gradients for Language Scores by Country Slide (.pdf)
• School Resources and Educational Outcomes in Developing Countries Presentation (.pdf)
• Making Learning for All a Reality Presentation (.pdf)
• Addressing the Global Learning Crisis Presentation (.pdf)

Event Materials

• 0127_improving_education_in_developing_world
• 0127_slide_vandergaag
• 0127_edinptoh
• 0127_king
• 0127_wagner

INTRODUCTION

In an earlier policy brief, Where is the Learning? Measuring Schooling Efforts in Developing Countries, we drew attention to what was labeled “the global learning crisis.” While tremendous progress has been made over the past couple of decades to get tens of millions of additional children to enroll in school, progress in improving learning outcomes has been considerably less impressive. Although, shockingly, comprehensive learning outcome data are not available for most of the developing world, the many small scale, local or, in some cases, national studies that have been done show a dismal picture. For instance, Uwezo, an East African initiative, found that in Tanzania, only 44 percent of students in Grade 4 were able to read a basic story from Grade 2. Similarly, the Annual Status of Education Report (ASER) facilitated by Pratham found that in rural India, less than half of Grade 4 students were able to do basic subtraction. These examples demonstrate the gravity of “the global learning crisis” as students fail to master competencies appropriate for their grade level, hindering the development of life skills and success in further schooling, as well as performance in the labor market.

With about 61 million children in the developing world still not yet in school, it is too early to declare victory on the “enrollment agenda”. But we would do a disservice to the 250 million children around the world who fail to reach Grade 4 or attain minimum learning standards, if we don’t step up efforts to improve learning outcomes.

This policy brief is part of a larger effort to link resources in the education sector with outcome measures. As we have documented elsewhere, few countries systematically collect comprehensive financial data on education, although fortunately an increasing number of initiatives is trying to address this issue by producing, for instance, National Education Accounts (NEAs). When the focus of the sector changes from enrollment to enrollment plus learning, efforts to better grasp the size and use of financial resources should evolve accordingly. For instance, much learning takes place outside of the classroom, especially in the early years. For NEAs to be a useful tool for adjusting the allocation of scarce resources, the “learning” sector should be defined more broadly than the education or “schooling” sector. We will address this and related issues in a subsequent policy brief.

Once our focus becomes enrollment plus learning, we have to broaden our view and look at the entire environment in which a child develops skills, starting with the households in which children are born. It has beenknown for many decades and throughout the world, that among the best predictors of future school performance are some basic household characteristics, such as income and mother’s education level.

Data from international assessments also show a relationship between income and educational performance, exemplified by intra and intercountry results. In Colombia, average Trends in International Mathematics and Science Study (TIMSS) math scores at Grade 8 for the richest quintile of students were close to 100 points higher than those from the poorest quintile. On the other hand, the difference in average scores between the poorest quintile in the United States and the richest quintile in Colombia was about 50 points. Income is not the only predictor of success, as exemplified in Peru, where children whose mothers have completed primary school and whose maternal language is Spanish rather than an indigenous language, have a greater probability of reaching the appropriate school grade for their age. In Kenya, Uwezo found that the higher their father’s educational attainment, the more likely children were able to read a story at Grade 3 or attend extra tutoring sessions.

In addition, the larger environment (such as the village or the urban neighborhood) in which the young child grows up also has a major and lasting impact. In Tanzania, urban students in Grade 3 are three times more likely than their rural counterparts to meet standards in literacy and numeracy. Related to the impact of the larger environment, data from Nigeria suggest that girls are more disadvantaged in school attendance, as parents may be reluctant to send girls to school because of perceived fears for their safety while traveling and concerns about the physical strength required for walking the distance.

Clearly, especially in the early years, most learning takes place outside of the classroom. Consequently, children who grow up in deprived circumstances will start life with a disadvantage leading to a lack of learning in the early grades, which will have lifetime effects.

In the next section, we will summarize the evidence that the early years (ages 0 to 5) are crucial for subsequent learning achievements. From this evidence we conclude that many of the problems with learning outcomes in the developing world (and in many developed countries) need to be addressed well before school age. Before delving into what happens in schools, we explore the relationship between enrollment, learning and dropout. As the crux of this brief is to lay out the evidence on what contributes to learning, we must acknowledge the factors leading to low enrollment and dropout. Next, we turn our attention to what happens in schools and what can be done to improve these activities, as well as try to summarize the evidence about the relationship between specific school-based inputs and learning outcomes. As it turns out, this evidence is, in many cases, rather feeble. Therefore, we will first focus on school-level inputs that are necessary for a good learning environment, i.e. without which we cannot expect any learning to take place. Most of these inputs are rather obvious, but they are worth mentioning. Subsequently, we will discuss additional inputs that have proven to contribute to learning outcomes in some cases, but not in others. Clearly how these inputs are applied matters.

Next, we address factors that contribute to learning outside of a formal environment, after which we review issues in health and nutrition that are closely linked to learning outcomes. We then review the need for the collection and dissemination of learning assessments in order to impact further improvements in these areas and we try to answer the question: what are the building blocks for an education sector that promote learning? Finally we explore needs for future research in learning.

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November's U.S. Bureau of Labor Statistics (BLS) employment report showed continued improvement in the job market, with employers adding 211,000 workers to their payrolls and hourly pay edging up compared with its level a year ago. The pace of job growth was similar to that over the past year and somewhat slower than the pace in 2014. For the 69^th consecutive month, private-sector payrolls increased. Since the economic recovery began in the third quarter of 2009, all the nation’s employment gains have occurred as a result of expansion in private-sector payrolls. Government employment has shrunk by more than half a million workers, or about 2.5 percent. In the past twelve months, however, public payrolls edged up by 93,000.

The good news on employment gains in November was sweetened by revised estimates of job gains in the previous two months. Revisions added 8,000 to estimated job growth in September and 27,000 to job gains in October. The BLS now estimates that payrolls increased 298,000 in October, a big rebound compared with the more modest gains in August and September, when payrolls grew an average of about 150,000 a month.

Average hourly pay in November was 2.3 percent higher than its level 12 months earlier. This is a slightly faster rate of improvement compared with the gains we saw between 2010 and 2014. A tighter job market may mean that employers are now facing modestly higher pressure to boost employee compensation. The exceptionally low level of consumer price inflation means that the slow rate of nominal wage growth translates into a healthy rate of real wage improvement. The latest BLS numbers show that real weekly and hourly earnings in October were 2.4 percent above their levels one year earlier. Not only have employers added more than 2.6 million workers to their payrolls over the past year, the purchasing power of workers' earnings have been boosted by the slightly faster pace of wage gain and falling prices for oil and other commodities.

The BLS household survey also shows robust job gains last month. Employment rose 244,000 in November, following a jump of 320,000 in October. More than 270,000 adults entered the labor force in November, so the number of unemployed increased slightly, leaving the unemployment rate unchanged at 5.0 percent. In view of the low level of the jobless rate, the median duration of unemployment spells remains surprisingly long, 10.8 weeks. Between 1967 and the onset of the Great Recession, the median duration of unemployment was 10.8 weeks or higher in just seven months. Since the middle of the Great Recession, the median duration of unemployment has been 10.8 weeks or longer for 82 consecutive months. The reason, of course, is that many of the unemployed have been looking for work for a long time. More than one-quarter of the unemployed—slightly more than two million job seekers—have been jobless for at least 6 months.  That number has been dropping for more than five years, but remains high relative to our experience before the Great Recession.

If there is bad news in the latest employment report, it's the sluggish response of labor force participation to a brighter job picture. The participation rate of Americans 16 and older edged up 0.1 point in November but still remains 3.5 percentage points below its level before the Great Recession. About half the decline can be explained by an aging adult population, but a sizeable part of the decline remains unexplained. The participation rate of men and women between 25 and 54 years old is now 80.8 percent, exactly the same level it was a year ago but 2.2 points lower than it was before the Great Recession. Despite the fact that real wages are higher and job finding is now easier than was the case earlier in the recovery, the prime-age labor force participation rate remains stuck well below its level before the recession. How strong must the recovery be before prime-age adults are induced to come back into the work force? Even though the recovery is now 6 and a half years old, we still do not know.

Event Information

In 2015, 193 countries adopted the Sustainable Development Goals (SDGs), a new global agenda that is more ambitious than the preceding Millennium Development Goals and aims to make progress on some of the most pressing issues of our time. Goal 4, "To ensure inclusive and quality education for all, with relevant and effective learning outcomes," challenges the international education community to meet universal access plus learning by 2030. We know that access to primary schooling has scaled up rapidly over previous decades, but what can be learned from places where transformational changes in learning have occurred? What can governments, civil society, and the private sector do to more actively scale up quality learning?

On April 18-19, the Center for Universal Education (CUE) at Brookings launched "Millions Learning: Scaling Up Quality Education in Developing Countries," a comprehensive study that examines where learning has improved around the world and what factors have contributed to that process. This two-day event included two sessions. Monday, April 18 focused on the role of global actors in accelerating progress to meeting the SDGs. The second session on Tuesday, April 19 included a presentation of the Millions Learning report followed by panel discussions on the role of financing and technology in scaling education in developing countries.

 Join the conversation on Twitter #MillionsLearning

Video

• Getting millions to learn: What will it take to accelerate progress on meeting the Sustainable Development Goals?
• Scaling quality education: The launch of the Millions Learning report
• Do funders help or hinder scaling in education?
• What role can technology play in scaling education?

Audio

• Getting millions to learn: What will it take to accelerate progress on meeting the Sustainable Development Goals?

Transcript

• Uncorrected Transcript - Day 1 (.pdf)
• Uncorrected Transcript - Day 2 (.pdf)

Event Materials

• 20160418_millions_learning_transcript
• 20160419_millions_learning_transcript

Editor's Note: The introduction to the 2015 Brown Center Report on American Education appears below. Use the Table of Contents to navigate through the report online, or download a PDF of the full report.

TABLE OF CONTENTS

Part I: Girls, Boys, and Reading

Part II: Measuring Effects of the Common Core

Part III: Student Engagement

INTRODUCTION

The 2015 Brown Center Report (BCR) represents the 14^th edition of the series since the first issue was published in 2000.  It includes three studies.  Like all previous BCRs, the studies explore independent topics but share two characteristics: they are empirical and based on the best evidence available.  The studies in this edition are on the gender gap in reading, the impact of the Common Core State Standards -- English Language Arts on reading achievement, and student engagement.

Part one examines the gender gap in reading.  Girls outscore boys on practically every reading test given to a large population.  And they have for a long time.  A 1942 Iowa study found girls performing better than boys on tests of reading comprehension, vocabulary, and basic language skills.  Girls have outscored boys on every reading test ever given by the National Assessment of Educational Progress (NAEP)—the first long term trend test was administered in 1971—at ages nine, 13, and 17.  The gap is not confined to the U.S.  Reading tests administered as part of the Progress in International Reading Literacy Study (PIRLS) and the Program for International Student Assessment (PISA) reveal that the gender gap is a worldwide phenomenon.  In more than sixty countries participating in the two assessments, girls are better readers than boys. 

Perhaps the most surprising finding is that Finland, celebrated for its extraordinary performance on PISA for over a decade, can take pride in its high standing on the PISA reading test solely because of the performance of that nation’s young women.  With its 62 point gap, Finland has the largest gender gap of any PISA participant, with girls scoring 556 and boys scoring 494 points (the OECD average is 496, with a standard deviation of 94).   If Finland were only a nation of young men, its PISA ranking would be mediocre.

Part two is about reading achievement, too. More specifically, it’s about reading and the English Language Arts standards of the Common Core (CCSS-ELA).  It’s also about an important decision that policy analysts must make when evaluating public policies—the determination of when a policy begins. How can CCSS be properly evaluated? 

Two different indexes of CCSS-ELA implementation are presented, one based on 2011 data and the other on data collected in 2013.  In both years, state education officials were surveyed about their Common Core implementation efforts.  Because forty-six states originally signed on to the CCSS-ELA—and with at least forty still on track for full implementation by 2016—little variability exists among the states in terms of standards policy.  Of course, the four states that never adopted CCSS-ELA can serve as a small control group.  But variation is also found in how the states are implementing CCSS.  Some states are pursuing an array of activities and aiming for full implementation earlier rather than later.  Others have a narrow, targeted implementation strategy and are proceeding more slowly. 

The analysis investigates whether CCSS-ELA implementation is related to 2009-2013 gains on the fourth grade NAEP reading test.  The analysis cannot verify causal relationships between the two variables, only correlations.  States that have aggressively implemented CCSS-ELA (referred to as “strong” implementers in the study) evidence a one to one and one-half point larger gain on the NAEP scale compared to non-adopters of the standards.  This association is similar in magnitude to an advantage found in a study of eighth grade math achievement in last year’s BCR.  Although positive, these effects are quite small.  When the 2015 NAEP results are released this winter, it will be important for the fate of the Common Core project to see if strong implementers of the CCSS-ELA can maintain their momentum.

Part three is on student engagement.  PISA tests fifteen-year-olds on three subjects—reading, math, and science—every three years.  It also collects a wealth of background information from students, including their attitudes toward school and learning.  When the 2012 PISA results were released, PISA analysts published an accompanying volume, Ready to Learn: Students’ Engagement, Drive, and Self-Beliefs, exploring topics related to student engagement.

Part three provides secondary analysis of several dimensions of engagement found in the PISA report.  Intrinsic motivation, the internal rewards that encourage students to learn, is an important component of student engagement.  National scores on PISA’s index of intrinsic motivation to learn mathematics are compared to national PISA math scores.  Surprisingly, the relationship is negative.  Countries with highly motivated kids tend to score lower on the math test; conversely, higher-scoring nations tend to have less-motivated kids. 

The same is true for responses to the statements, “I do mathematics because I enjoy it,” and “I look forward to my mathematics lessons.”  Countries with students who say that they enjoy math or look forward to their math lessons tend to score lower on the PISA math test compared to countries where students respond negatively to the statements.  These counterintuitive finding may be influenced by how terms such as “enjoy” and “looking forward” are interpreted in different cultures.  Within-country analyses address that problem.  The correlation coefficients for within-country, student-level associations of achievement and other components of engagement run in the anticipated direction—they are positive.  But they are also modest in size, with correlation coefficients of 0.20 or less. 

Policymakers are interested in questions requiring analysis of aggregated data—at the national level, that means between-country data.  When countries increase their students’ intrinsic motivation to learn math, is there a concomitant increase in PISA math scores?  Data from 2003 to 2012 are examined.  Seventeen countries managed to increase student motivation, but their PISA math scores fell an average of 3.7 scale score points.  Fourteen countries showed no change on the index of intrinsic motivation—and their PISA scores also evidenced little change.  Eight countries witnessed a decline in intrinsic motivation.  Inexplicably, their PISA math scores increased by an average of 10.3 scale score points.  Motivation down, achievement up.

Correlation is not causation.  Moreover, the absence of a positive correlation—or in this case, the presence of a negative correlation—is not refutation of a possible positive relationship.  The lesson here is not that policymakers should adopt the most effective way of stamping out student motivation.  The lesson is that the level of analysis matters when analyzing achievement data.  Policy reports must be read warily—especially those freely offering policy recommendations.  Beware of analyses that exclusively rely on within- or between-country test data without making any attempt to reconcile discrepancies at other levels of analysis.  Those analysts could be cherry-picking the data.  Also, consumers of education research should grant more credence to approaches modeling change over time (as in difference in difference models) than to cross-sectional analyses that only explore statistical relationships at a single point in time. 

Downloads

• Download the report

Tom Loveless, a nonresident senior fellow in Governance Studies, explains his latest research on measuring achievement of American students.

“The bottom line here: the implementation of the common core has appeared to have very little impact on student achievement,” Loveless says. In this episode, he discusses whether the common core is failing our students, whether AP achievement is indicative of student success, and the role of principals as instructional leaders.

Also in this episode: Get to know Constanze Stelzenmüller, the Robert Bosch Senior Fellow in the Center on the United States and Europe, during our "Coffee Break” segment. Also stay tuned to hear the final episode in our centenary series with current and past Brookings scholars.

Show Notes:

The Brown Center Report on American Education

Brookings Centenary Timeline

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