The Functions of Government

Positive Externality: a side-effect which is associated with a market, whereby production benefits parties other than the producer and yet the producer is not compensated. In other words, when the consumption of a good or service creates benefits that spill over to third parties, the marginal social benefit is greater than the marginal private benefit (MSB>MPB). Each type of externality can be further classified in terms of the producers and consumers.

There are two types of positive externalities:
a) Positive Production Externality: occurs when a firm's production increases the well-being of others but the firm is not compensated by those others. For example, the provision of roads and highways by the government benefits the motorists, automobile-producers, and gasoline companies. The provision of roads and highways does not provide monetary benefits to the government. There are some questions as to what exactly a positive production externality can be. Why would producers want to produce a good that is only beneficial to the consumer? Producers usually will find ways to get the full benefit back from their production and charge their customers.
Example: We all know someone who rigs a satellite for free cable. This is a positive production externality, even though it is morally wrong. The cable provider would be very upset to see this happening. This is why they will charge rates to keep people from have the spill over benefits and keep the profits for themselves.
Copying people's ideas can sometimes lead to positive externalities. If there is a designer of clothes that forgets to get a patent for the designs, then anyone who is able can make a counterfeit of the design and sell it as well, which in turn leads to a lower cost of that good for the consumers.

If a positive externality exists in the provision of education when education is provided in a perfectly competitive market without government intervention, then at the market equilibrium level of education net gains to society are possible by raising the level education.

b) Positive Consumption Externality: occurs when an individual's consumption increases the well-being of others but the individual is not compensated by those others. Some examples include the flu shot, bicycling,
education, and volunteering.

(Public Finance and Public Policy, Second Edition. Jonathan Gruber. Chapter 5. Page 127.)

Positive Externalities from the Flu Shot
The flu shot is an interesting positive externality if you think about it. At first, getting a shot does not seem to benefit anyone else other than the person that gets it. BUT! The flu can spread viruses to a number of people just from one person being infected. When a person receives the flu shot, they are reducing the chances that others will get sick. The benefit of not getting sick from the flu is spread to more than just the person who received the shot, thus creating a positive externality.

Positive Externalities from Biking
Human health, transportation, and global warming are all issues in today's society. What could be made to create benefits to more than just the producer? The answer: BICYCLES!!! Cycling can lead to a healthier person, less deaths in car accidents, and reduce the gases that affect global warming. Cities are looking at adding more biking lanes on roads in order to increase the number of bikers. Around the world the idea of having bicycles to rent and ride has become a big attraction. This however could lead to the free-rider problem. People could see the benefit of stealing the bikes for personal gain.

Positive Externalities from Educationa) Individuals that are more educated are usually more productive workers.
b) Educated citizens are more informed and usually more active voters.
c) Families have access to financial assistance through education grants and loans.
d) Pubic education helps with redistribution. All families, no matter their income level, can provide education to their children.
e) Having public schools that provide mandatory education gives every child the chance to learn and become to leaders of our future, a huge positive externality for society.

(Public Finance and Public Policy, Second Edition. Jonathan Gruber. Chapter 11. Page 287-289.)
"A stable and democratic society is impossible without a minimum degree of literacy and knowledge on the part of most citizens and without widespread acceptance of some common set of values. Education can contribute to both. In consequence, the gain from the education of a child accrues not only to the child but also to other members of the society"
(Friedman, 1962:86)

Positive Externalities from Volunteering
Volunteering can create positive externalities in a number of different ways. People who volunteer to clean up public parks create a positive externality by providing a cleaner public park for adults and children to exercise and play. People who volunteer to be crossing guards provide safety for children walking to school.

Primary/Secondary Education
Compared with students internationally, American students perform at about "up to par" in the subject areas of science, math, and reading. This may not be a bothersome statistic on its own. However, when one considers the fact that almost no other nation in the world spends as much money per pupil on education as the U.S. does, then it may be cause for concern. Providing public education eats up a sizable portion of state and local government budgets, sizable meaning about 30%. Exactly how much more does the U.S spend per student? And why is the U.S. paying more for the same outcome? More alarming than America's expenditure on public education and results, is the fact that students from significantly poorer countries are scoring higher in multiple subject areas. For example, students from these countries are currently scoring higher on math tests than are American students of the same age.

Federal Involvement
This pretty much signals that there is a problem with the U.S.' education system. Needless to say, a fair share of disagreement exists regarding how to fix it. Hoping to improve the status of education in America, students' and schools' academic performance, the United States' government attempted to create and administer a standardized test to measure student achievement and enforce teacher accountability. President George Bush and the current administration passed the No Child Left Behind Act. This act emphasizes accountability, both on the schools and on the teachers. It requires students in grades 3 through 8 to take examinations reflecting their age group's proficiency level in certain subjects. For the schools of low performing students, there are consequences such as loss of federal funding, loss of students to different schools, and, in extreme cases, being closed down by the government. This piece of legislation marks one of the biggest examples of federal government involvement in education, an area that has historically been left up to state and local governments. As a result, the federal government's action has been highly criticized and generated much controversy.

(Public Finance and Public Policy, Second Edition. Jonathan Gruber. Chapter 11. Page 285-292.)

No Child Left Behind

external image NCLB.jpg

A popular topic in most political elections, it is reasonable to assume that most people support the improvement of education. This is due in part to the large amount of benefits, both spillover and private, that education creates for society. In support of the betterment of American education, the federal government has sought to raise the bar for both students and teachers. One primary tool it has used to attempt this has been the implementation of the No Child Left Behind Act. Below is a description of the act's major provisions

Major Provisions of the No Child Left Behind Act
a) Accountability For Results
  • Calls for the creation of state assessments that test a child's knowledge in reading and math from 3rd to 8th grade
b) Creating Flexibility at the State and Local Levels And Reducing Red Tape
  • Creates provisions that allow schools to have more influence in how federal funds are used in their districts
c) Expanding Options For Parents Of Children From Disadvantaged Backgrounds
  • Allows parents to transfer their children to better performing public schools if theirs are deemed as failing
  • Earmarks federal title funds for supplemental education services such as tutoring or summer school programs
  • Increases opportunities for communities to create charter schools
d) Ensuring Every Child Can Read With Reading First
  • Increases federal funding for reading, while linking this with scientifically proven instruction methods
e) Strengthening Teacher Quality
  • Requests states have highly-qualified teachers in every public school classroom
  • Simplifies the process for recruiting and retaining excellent teachers
  • Allows school districts to use up to 50% of specific federal funds to increase teacher pay, improve teacher training, etc.
f) Confirming Progress
  • Requires a small sample of students to be evaluated by a national reading and math assessment, used by the U.S. Department of Education to verify student progress and statewide performance.
g) Promoting English Proficiency
  • Consolidates bi-lingual programs in an attempt to streamline the process Limited English Proficient (LEP) students must go through
  • Intended to help LEP students to learn English as efficiently as possible
  • Requires LEP students to be tested in reading and language arts after attendance in a U.S. school for three years

The Following website goes into greater detail under each topic:
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The Controversy of Federal Involvement
Many people are of the opinion that the current problems with national education are the result of the federal government overstepping its constitutional boundaries. Government's intentions for educational improvement have caused major issues to surface regarding No Child Left Behind and Affirmative Action. Many also feel state and local concerns about these controversial federal programs, have not been effectively remedied at the national level. Traditionally, the area of education has been a state matter, due mostly to the overwhelming variations in the needs of children and their communities. The result has been constant increasing centralization, causing school districts and state education administrations to become much larger and increasingly more involved. Eventually, the federal government's involvement increased as well. The cornerstone of federal involvement in national education was the creation of the Department of Education in 1979 (McCluskey, School's Out: The Failure of No Child Left Behind). The powers delegated to the federal government are enumerated in Article I Section 8 of the constitution. Almost no powers are provided to the federal government in the area of education. The sole exception is the 14th amendment, which mandates that states not discriminate in how they provide public education. As a result, it is widely believed that the federal government's establishment of a regulatory agency like the Department of Education is grossly unconstitutional.

Advocates of the No Child Left Behind Act, argue that the "promoting the general welfare" clause of the constitution is the empowering provision. However, as with any case of constitutional interpretation, there are individuals who believe quite the opposite. James Madison refutes this concept of empowerment in Federalist Paper 41, saying: "For what purpose could the enumeration of particular powers be inserted if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase and then to explain and qualify it by recital of particulars" (Madison). According to James Madison, this constitution clause does not give the federal government any additional power, but rather explains why the founding fathers gave the federal government specific powers.

Supporters find themselves asking the questions, What if specially enumerated powers are not enough? What should the federal government do if it is not capable of handling a problem, given the powers it has been specific delegated by the founding fathers? James Madison would most likely direct these individuals to the Bill of Rights, where the 10th amendment provides: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or to the people" (Coulson, "NCLB Should Be Abolished).

Most are of the opinion that education is a matter to be left to the states, and that the specifically enumerated powers of the federal government should prevent federal intervention. Others are in support of federal action and the No Child Left Behind Act simply because they believe some education reform is better than none. Despite differences in opinions, there is a generally consensus that education reform could use some improvements. Most parents are concerned about their child's education, but it has proven nearly impossible to get everyone on-board with a uniform progressive solution.

Article This is an article published in April of 2007 by the New York Times, illustrating the controversy over No Child Left Behind.

(Coulson, Andrew J. "NCLB Should Be Abolished." "TX GOP & AFT!" Cato-at-Liberty. 15 July 2008. 2 Aug 2008.

(McCluskey, Neal, Andrew Coulson, and Scott Garrett. "Policy Forum." Cato Institute. School's Out: The Failure of No Child Left Behind, 05 Sept. 2007, Washington, D.C. School's Out: Left Behind, Washington,
D.C.: Cato Policy Report, 2007.)

Failure of the No Child Left Behind Act

Lower Test Scores and Slowed Learning
Unfortunately, No Child Left Behind has been unable to raise public education to the level desired. The act is not only missing its proposed goals, but creating negative effects in schools. Test scores have not increased; in fact they have dropped. According to The New Republic's (A Journal of Politics and the Arts) "scores for U.S. students are down across grades, across subjects, and across tests based on the PIRLS (Program on International Reading Literacy Survey) and PISA (Program for International Student Assessment) results since NCLB (No Child Left Behind) was passed" (Coulson, NCLB Should Be Abolished). Clearly this is not an advancement. Consistent with the National Assessment of Educational Progress ("NAEP"), "the rate of improvement [for grades forth and eighth] actually slowed" (McCluskey, End It, Don't Mend It-What to Do with No Child Left Behind). Not only are students showing less improvement, they are improving at a slower pace than they were before NCLB was signed into law. In June of 2006, Jaekjung Lee, a professor at the State University of New York, worked with Harvard professors to release a study of test score trends from 1990 to 2005. Lee found the following:

  • "NCLB does not appear to have had a significant impact on improving reading or math achievement"
  • "Average achievement remains flat in reading and grows at the same pace in math as it did before the NCLB was passed"
  • "NCLB does not seem to have helped the nation and states significantly narrow the achievement gap"
  • The racial and socioeconomic achievement gap in NAEP reading and math persists after NCLB"

From: (McCluskey, End It, Don't Mend It-What to Do with No Child Left Behind).

In keeping with these findings, another survey, the Northwest Evaluation Association ("NWEA") found that "...students learned less in a year after NCLB's passage than they did before [its passage], a result that held true for every ethnic group analyzed and for both mathematics and reading" (McCluskey, End It, Don't Mend It-What to Do with No Child Left Behind). Based on the finding of these studies, it appears to many that the federal government's attempt to boost education was a federal flop, missing the mark by miles.

No Child Left Behind is not only damaging the education of the nation, but may also be degrading the United States' global status as a nation among nations. In 2000, the Program for International Student Assessment (PISA) was administered to fifteen-year old children world-wide, in the subjects of reading, mathematics, and sciences. The United States "...earned an overall math score of 493 on the 1000 point scale, seven points below average, placing us 18th out of the 27 participating countries" (Coulson, All Americans Left Behind). After the PISA test in 2006, the United States' math score was 474, ranking it as 25th out of 30 participating countries. From 2000 to 2006, the United States' science score dropped from 499 to 489 and it's ranking fell from 14th out of 27 countries to 21st out of 30 countries.

(Coulson, Andrew J. All Americans Left Behind. Publication No. Center for Educational Freedom, Cato Institute. Washington D.C.: Cato Policy Report, 13 December 2007.)

(Coulson, Andrew J. "NCLB Should Be Abolished." "TX GOP & AFT!" Cato-at-Liberty. 15 July 2008. 2 Aug 2008.

(McCluskey, Neal and Andrew J. Coulson. End It, Don't Mend It-What to Do with No Child Left Behind. Policy Analysis. Vers. No. 599. 5 Sept. 2007. Cato Institute. 2 Aug. 2008.)

Dishonesty and Deception in the Education System
NCLB is a federal program which gives funds to participating states, causing some to believe that the dishonesty of politicians is spreading to the heads of the education system. Part of this problem stems from the fact that the federal government has no national standard to measure achievement, and only requires states to test students and track their scores. Every state has the right to formulate its own assessments, and measure it's students according to its own standards. This practice has resulted in the inflation of test scores, driving students' achievements down even further since the passage of the NCLB.

The National Assessment of Education Program (NAEP) tests random students in random schools from all over the nation, using the test results to determine and compile the achievement rate of the average American student. This NAEP compilation provides a national average perspective, but it is not used to set a national standard. In 2006, the Institute of Education Sciences ("IES") compared the scores of state tests from schools that participated in the NAEP. They discovered "most states' 'proficient' levels are equivalent to the NAEP's 'basic' designation except in 4th grade reading, where most states' standards are actually below NAEP's basic level" (McCluskey, End It, Don't Mend It-What to Do with No Child Left Behind). Therefore, fourth grade students are performing far worse than state reports say they are, a direct result of the lack of a single standard of comparison.

Other deceptive practices include board directors undermining education by sacrificing reality for appearances. For example, shortly after the NCLB passed, the state of Colorado reclassified scores that had previously been categorized as "partially proficient" on state exams to "proficient." Following suit, Michigan lowered the percentage of students required to pass the state exam in order to be awarded "adequate yearly progress" by the federal government. Additionally, Michigan also lowered the percentage necessary to graduate high school English from 72% to 42%. Test scores at the "basic" level in Louisiana were also re-designated at the "proficient" level.

Due to the federally funded nature of No Child Left Behind, states have a strong incentive to lower their achievement standards in attempts to capture additional funding. Thus, NCLB has become a political policy that has diverted the focus of education from students and teachers to the incentives of receiving funding from the federal government. In exchange for federal money, local educators agree to produce certain results. Failur to produce these results, causes federal funding to be severed. NCLB creates a structure of education that encourages lower levels of instruction in the classroom instead of pushing teachers to attain higher standards. Instead of reading literature, students more often read short and disconnected samples, similar to the ones on state reading tests. Rather than writing essays, students spend class time finding and correcting written mistakes in short passages. The teaching of conceptual ideas, analytical thinking, and problem solving has been replaced with short-term memorization. The creativity of teachers has been hampered by the state assessment coaching they are forced to provide.

Teachers no longer teach math, science, and reading. Instead, they teach the math test, science test, and the reading test. Ironically, such "dumbing down of instruction in the name of accountability is most prevalent in schools with large populations of poor and minority students" (Toch). Sadly, these are exactly the students that No Child Left Behind was designed to help most.

(Gryphon, Marie, Harry Holzer, and Tanya Clay. "Policy Forum." Cato Institute, Affirmative Action After Michigan, 19 Aug. 2004. Washington, D.C. Affirmative Action: Myth or Necessity? Washington D.C.: Cato
Policy Report, 2004.)

(McCluskey, Neal and Andrew J. Coulson. End It, Don't Mend It-What to Do with No Child Left Behind. Policy Analysis. Vers. No. 599. 5 Sept. 2007. Cato Institute. 2 Aug. 2008.)

(Toch, Thomas. "Bush Could Dumb-Down Tests." Brookings-Education. 6 Apr. 2001. 2 Aug. 2008.

Affirmative Action

What is Affirmative Action?

According to the Merriam-Webster Dictionary, affirmative action is " active effort to improve the employment or educational opportunities of members of minority groups and women...and to promote the rights or progress of other disadvantaged persons."

Support for Affirmative Action
Supporters advocate that affirmative action is necessary to maintain campus diversity and to overcome racial barriers. They also stress the importance of compensation to minorities for decades of discrimination. Affirmative action in education can provide grants and fellowships, tutorial programs and other initiatives that help minorities and women achieve levels of academic attainment that were denied to them until very recently. Furthermore, affirmative action in education prepares women and minorities for fields in engineering, medicine, business, math and science, and other vocations which have been traditionally, and sometimes exclusively, occupied by white men.

Opposition to Affirmative Action
Critics argue that under the equal protection clause of the 14th amendment, racial preferences violate the Civil Rights Act of 1974, promote reverse discrimination against non-minorities, and cast questions of merit on the achievements of non-minorities.

According to Jaekjung Lee of New York State University, affirmative action, which was designed to level the playing field between minorities and non-minorities is not helping minorities anymore than NCLB. It is the poor education and instruction that most minorities receive in public school that produce poor test scores, making affirmative action necessary in the first place. Although slight progress has been made since 1960, today "...the median black American still scores below seventy-five percent of American whites on most standardized tests" (Jencks, The Black-White test Score Gap). Needless to say, this is not the level of accomplishment that George Washington Carver and Booker T. Washington had envisioned for black Americans. In line with Lee's findings, Christopher Jencks, professor of social policy at Harvard, and Meredith Philips, assistant professor of policy studies at UCLA, both state that closing the black-white test score gap would have significant social and economic consequences and

"...would probably do more to promote racial equality in the United States than any other strategy now under discussion...eliminating the test score gap would sharply increase black college graduation rates, making them nearly equal to white rates. Such a change would also allow selective colleges to phase out racial preferences in admission, which have long been a flash point for racial conflict. Eliminating the test score gap would also reduce racial disparities in men's earnings and would probably eliminate racial disparities in women's earnings" (Jencks, The Black- White Test Score Gap: Why It Persists and What Can Be Done).

This is what the United States has been striving for in litigation since the Civil War era and in practice since the Civil Rights movement began in the 1960's. Closing the test score gap would render affirmative action obsolete. Closing the test score gap would make minorities equal to non-minorities in society. To finally achieve the America that Martin Luther King Jr. dreamed of, its is necessary to begin fixing and improving the classroom rather than trying to make a better test.

(Jencks, Christopher, and Meredith Philips. "The Black-White Test Score Gap." Brookings Institution Press. 2 Aug. 2008.

(Jencks, Christopher, and Meredith Philips. "The Black-White Test Score Gap: Why It Persists and What Can Be Done." Brookings: 1-4.)

Affirmative Action Litigation and Supreme Court Cases
Affirmative action has been a relevant issue for almost fifty years. President John F. Kennedy first proposed the idea in 1961, followed by Presidents Lyndon B. Johnson and Richard Nixon. Affirmative action has been a major domestic issue for every presidential administration since then, enduring much litigation. Most famously, the Regents of the University of California v. Bakke U.S. Supreme Court Case in 1978 rejected racial quotas but maintained that race could be used in the admission process in order to remedy past discriminations and to create a more diverse students campus which it viewed as a favorable learning environment. In 1996, in Hopwood v. University of Texas Law School, the U.S. Supreme Court rejected the University of Texas' affirmative action program and declared the Bakke decision of 1978 invalid, asserting that "...educational diversity is not recognized as a compelling state interest" (Brunner). Later, in 2003, the U.S. Supreme Court ruled in Grutter v. Bollinger that racial preferences based on "individual consideration" rather than a "mechanical way" could be used in university admission decisions, thereby legalizing affirmative action once again. Therefore, the question is no longer the issue of constitutionality but one of valuable merit. Does affirmative action actually help minorities? According to analysts and scholarly institutions, the answer is a resounding "No!"

(Brunner, Borgna. "Timeline of Affirmative Action Milestones." Pearson Education. 2007. 3 Aug. 2008.

("Grutter V. Bollinger and the Community College." Barbara Grutter. Academic Exchange Quarterly (22 September, 2004):1-3.)

Regents of the University of California V. Bakke 1978
Allan Bakke filed suit after learning that minority candidates with lower qualifications had been admitted to medical school under a program that reserved spaces for “disadvantaged” applicants. The California Supreme Court ordered the school, the State-run University of California, to admit Bakke. The university then appealed to the United States Supreme Court.

The Court's Decision
A splintered Supreme Court affirmed the judgment ordering Bakke's admission to the medical school of the University of California at Davis and invalidating the school's special admissions program. However, the Court did not prohibit the school from considering race as a factor in future admissions decisions. Justice Lewis Powell, Jr., announced the Court's judgment. Four justices agreed with his conclusions as to Bakke individually, and four other justices agreed with the ruling as to use of race information in the future.
Justice Powell wrote that “the guarantee of Equal Protection cannot mean one thing when applied to one individual and something else when applied to a person of another color.” He did not, however, prohibit schools from considering race as one factor in the admissions process.
Justice Thurgood Marshall argued that race could properly be considered in an affirmative action program, a policy of taking positive steps to remedy the effects of past discrimination. “In light of the sorry history of discrimination and its devastating impact on the lives of Negroes, bringing the Negro into the mainstream of American life should be a state interest of the highest order. To fail to do so is to ensure that America will forever remain a divided society. I do not believe that the Fourteenth Amendment requires us to accept that fate.”

Impact of the Case
The legal impact of Bakke was reduced by the disagreement among the justices. Because the Court had no single majority position, the case could not give clear guidance on the extent to which colleges could consider race as part of an affirmative action program.

Affirmative action remains a controversial issue in California. In 1996, voters passed the California Civil Rights Initiative, generally known as “Proposition 209,” which prohibited all government agencies and institutions from giving preferential treatment to individuals based on their race or gender. The Supreme Court also refused to hear an appeal from a decision upholding the constitutionality of the law.

Analysts and Scholarly Institutions on Affirmative Action
Affirmative action is not necessary for minorities to attain a college education. According to Marie Gryphon, an education policy analysts at the Cato Institute,

"Most four-year schools are not academically competitive. They accept everyone with a standard high school education. Preferences directly affect only the 20 to 30 percent of American colleges that enjoy more applicants than spaces. Students applying to these schools have many other options" (Gryphon, Affirmative Action: Myth or Necessity?).

Gryphon is not alone in her opinion. In the words of their book "Compelling Interest: Examining the Evidence on Racial Dynamics in Colleges and Universities" Dara Witt, Mitchell J. Chang, and Kenji Hakuta of Standford University find that:

"The majority of colleges and universities in the United States are not selective and do not need to have policies of affirmative action...the basic tensions underlying affirmative action debates do not center on whether or not higher education should be available to all those qualified and willing to participate, but on what 'merits' the small number of spots available at highly selective institutions should be granted" (Whitt, pg 264).

This being the case, one should ask why minority students even require the assistance of affirmative action. Some scholars maintain that the answer is not racial discrimination and oppression but simply that most non-minorities are more academically competitive than most minorities. Liam Julian, associate editor and writer for the Thomas B. Fordham Foundation, expresses the fact that

"...because minority students are less likely to attend well-funded schools and less likely to get strong college prep curricula in high school, on average they enter the college admissions pool with weaker credentials than white students, and thus end up disproportionately attending less selective colleges" (Julian).

Affirmative action simply ignores and attempts to cover up the reality that, in general, most minority college applicants are less qualified than most non-minority college applicants because they have not been fully prepared in high school. It does absolutely nothing to solve the root problem, which is a gap between the qualifications of minority and non-minority college applicants. This gap is caused by the failure of public schools, especially with high percentages of minorities, to adequately teach high school level material, let alone to prepare their students for a higher education. The negative side effects of the No Child Left Behind Act have further contributed to this underlying problem.

Basically, fewer minorities get degrees because more of them leave high school without the basic education to attend any four-year university, whether it is elective or not. According to Jay Greene of the Manhattan Institute, "...only twenty percent of black students, sixteen percent of Hispanic students and fourteen percent of Native American students..." (Gryphon, The Affirmative Action Myth-Cato Institute) graduate high school prepared to go to a university. Therefore, the failure of public schools to prepare minority students is responsible for the under representation of minorities at universities. Gryphon, an education policy analyst of the Cato Institute believes that " is a failure that affirmative action cannot remedy" (Gryphon, Affirmative Action: Myth or Necessity?). Affirmative is not successful in higher education because the No Child Left Behind Act was not successful in primary and secondary education.

(Gryphon, Marie, Harry Holzer, and Tanya Clay. "Policy Forum." Cato Institute, Affirmative Action After Michigan, 19 Aug. 2004. Washington, D.C. Affirmative Action: Myth or Necessity? Washington D.C.: Cato
Policy Report, 2004.)

(Gryphon, Marie. "The Affirmative Action Myth." Cato Institute. 10 July 2004. 31 July 2008.

(Julian, Liam. "Quick and the Ed Watch, #2." Editorial. Thomas B. Fordham Institute-Advancing Educational Excellence 2003.)

(Whitt, Daria, Mitchell J. Chang, and Kenji Hakuta. Compelling Interests: Examining The Evidence On Racial Dynamics In Colleges And Universities. Los Angeles: Standford UP, 3 March 2003.)

Other Side Effects of Affirmative Action
Even though affirmative action does not send more minorities to college, it does redistribute them from non-selective schools to selective ones. Advocates stress the idea that this is beneficial because it increases the income of graduates and helps to minimize racial disparities in wealth and income. However, according to the research of economists Stacy Berg Dale and Alan B. Krueger in the Quarterly Journal of Economics, "...attending a selective school does not raise student incomes, regardless of race" (Gryphon, Affirmative Action: Myth or Necessity?). By analyzing students who were accepted to Cornell University and then of their own choice attended a less selective college, they found a way to control all the factors that factor with the consideration process for applicants. They compared exactly equivalent students and found that the graduates of Ivy League universities made no more money than did the graduates of non-selective schools.

Social realities confirm the findings of the Dale-Krueger study. In the opinion of Warren Richey of the Christian Science Monitor, race preferences have not progressed the socioeconomic status of minorities in society. In 1978, "...four times as many black families as white families had incomes below the poverty line" (The Issue). Today, thirty years later, the rate is exactly the same. Also in 1978, "...the unemployment rate for black adults was twice that of whites" (The Issue). That also has not changed. The increased academic opportunity that is so strongly advocated by affirmative action supporters has not improved the social conditions of minorities in three decades.

Although racial preferences do not benefit minorities by getting more of them to college or by increasing their wages, they do support the damaging idea that brand name status is more important than actual talent or skill;. This notion suggest that some universities are better than others, and that minorities should be redirected to them. This creates resentment at elite universities because it pits one race against another. Race should not be placed on such a pedestal and given this much power.

Affirmative action, sadly, creates still further and more extensive damage. All researchers concur that sending students to selective universities produces lower grades. William Bowen and Derek Bok, former presidents of Princeton and Harvard Universities, respectively assert that "...minority students finish fifteen points lower in terms of class rank than they would have achieved if preferences did not exist" (Gryphon, Affirmative Action: Myth or Necessity?). They are three times more likely to drop out than non-minorities, those who do graduate are on "...average in the bottom twenty-five percent of their class" (Gryphon, Empty Promise). This is caused partially by inadequate preparation by public high schools. Affirmative action just ignores this lack of achievement and skills and gives leniency to minority applicants with lesser qualifications. This puts minorities in an academic squeeze where they are in way over their heads because they start out so far behind.

(Gryphon, Marie. "Empty Promise." Dallas Morning News 10 Apr. 2005.)

(Gryphon, Marie, Harry Holzer, and Tanya Clay. "Policy Forum." Cato Institute, Affirmative Action After Michigan, 19 Aug. 2004. Washington, D.C. Affirmative Action: Myth or Necessity? Washington D.C.: Cato Policy Report, 2004.)

("The Issue: Does Affirmative Action Foster Racial Diversity, or Does It Amount to Unfair Discrimination?" Update: Affirmative Action. 1 June 2007. 31 July 2008.

Reforming No Child Left Behind and Affirmative Action
Prominent scholars argue that No Child Left Behind and affirmative action are not working in favor of American minorities. Hence, it is necessary to find another mode to aid them in education. Closing the gap between minority and non-minority college applicants begins with closing the gap between minority and non-minority test scores which means closing the gap of quality between the public schools in minority areas and non-minority areas. Closing the gap in achievement is the way to eventually close the socioeconomic gap and to promote racial equality in America. This is most vital when it comes to education because much is lost by learning in an uniform environment.

Just as minorities suffer by not succeeding in the classroom, non-minorities are forever penalized by their lack of presence. Students and people alike learn from their peers. A diverse learning environment is necessary if students are to succeed in a diverse world. Whites need Blacks just as Asians need Latinos. They all need each other in order to experience the culture of the United States and the world. For one race to lack the presence of another is for one student to miss out on gaining knowledge and learning about those around him/or her and their world which affects his/or her own world. For the good of all races and improving the quality of education in America, it is necessary to replace No Child Left Behind and affirmative action with other more effective and efficient tools.

Currently, President Barack Obama presents a thoughtful three-part, fully-detailed plan to reform U.S. public schools, reward and support teachers, and correct the excesses/errors of the No Child Left Behind Act. Barack Obama believes that the overall goal of the No Child Left Behind Act is the right one – ensuring that all children can meet high standards – but the law has significant flaws that need to be addressed. He believes it was wrong to force teachers, principals and schools to accomplish the goals of No Child Left Behind without the necessary resources. We have failed to provide high-quality teachers in every classroom and failed to support and pay for those teachers. Obama understands that NCLB has demoralized our educators, broken its promise to our children and must be changed in a fundamental way.

Higher Education
Although we are spending an enormous amount of money on K-12 education with average results, higher education in the United States is a great success. U.S. research universities are consistently rated as the best in the world. Institutions of higher education spend about $315 billion per year, which is about 40% of total educational spending. Over 75.8 million students are enrolled in American colleges and universities. That amount of people makes up about one-fourth of the United States population. However, the number of foreign students studying here has nearly doubled in the last 20 years. Foreign students represent 4.0% of all higher education enrollment in the United States. 586,000 students from all over the world spend over $12 billion to enroll in American colleges and universities. This compares to only 14,000 American students who are studying abroad for more than one semester in any given year. The major difference between higher education and primary/secondary education in the United States is the degree of private provision and competition.

Federal Involvement
In 1965, legislation was passed for the Higher Education Act. The law was intended “to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in postsecondary and higher education.” It increased federal money given to universities, created scholarships, gave low-interest loans for students, and established a National Teachers Corps.

In the 2008 revisions, different minority groups decided to come together and ask for these changes. This minority group named themselves the Alliance for Equity in Higher Education. These groups found that by coming together, they could help all minority groups achieve the same common goals. The goals of the Alliance were to help minority students enter fields where they were underrepresented and to give incentives to minorities to enter these programs.

The U.S. government currently intervenes in higher education through state provisions, pell grants, student loans, and tax relief. Currently state and local government spend about $130 billion per year on higher education. The Pell Grant Program is a subsidy to higher education administered by the federal government that provides low-income families to pay for the education expenditures. Currently Pell Grants provide $12 billion in grants each year to about 15 million students. Student loans come in two forms: direct and guaranteed. Direct student loans are taken directly from the Department of Education and guaranteed student loans are taken from private banks for which the banks are guaranteed repayment by the government. The net cost to the government of student loans is $7 billion per year. Tax breaks for students and their families are the final way the government finances higher education. All the tax breaks add up to about $8 billion per year.

( Public Finance and Public Policy, First Edition. Jonathan Gruber. Chapter 11. Pages 295-296.)

Better marks, more money
An idea to improve and revive the capital's woeful schools (July 10, 2008)
This article is relevant due to the role it plays a role in "the impact of school quality." A teacher's potential salary earnings may discourage highly qualified candidates from the profession. In turn, this may cause a decline in school productivity.

Education is considered a positive externality because the Marginal Social Benefit is greater than the Marginal Private Benefit. Two means for government to deal with positive externalities are the price mechanism and the quantity mechanism. The price mechanism refers to offering discounts on private educational costs to students (i.e. vouchers). The quantity mechanism refers to mandating that individuals obtain a certain level of education. However, as the government provides more of a public good, the private sector will provide less.
Free Public Education tends to “crowd out” private education provision. It is possible that providing a fixed amount of public education can actually lower educational achievement in society through encouraging choice of lower-quality public schools over higher-quality private schools. Some parents who might desire higher quality education for their children decide not to use private schools, but they reduce their desired education in order to take advantage of free public schools.

The market equilibrium level of output (Q1) is less than the efficient level of output (Q*). This indicates that the free market under allocates resources to education. Without government intervention, the private market for education would result in an inefficiently low quantity of supply; too few children would receive an efficient amount of education.
One method of solving this problem is to offer educational vouchers (a subsidy) to achieve efficiency. By improving the efficiency of education, equity can also be achieved. Education improves earnings potential and reduces poverty. By government providing education for K-12, their goal is to provide a quantity even greater than Q* which would be efficient and equitable.

Vouchers --- The Solution or Not?

Educational vouchers were offered as a solution to the problem of “crowding out.” An education voucher is a fixed amount of money given by the government to families with school-age children who can spend it at any type of school, public or private. Click the following link for more information about Educational Vouchers

Arguments FOR education vouchers include:

A) Consumer Sovereignty – Vouchers allow individuals to more closely match their educational choices with their tastes. By forcing individuals to either choose free public education or to forgo this large public subsidy and choose private education, today’s system does not allow people to maximize their utility by freely choosing the option that makes them best off.

B) Competition - Competition allows the education market to benefit from the competitive pressures that make private markets function efficiently. It has been argued by many critics that the public education sector is incredibly inefficient, because there is no competitive pressure to keep it in balance. Vouchers would provide the desired competition by making private schools a more affordable option. This would cause students to choose schools based on which delivers the best product, not based on the financial advantage of local public schools, and schools that are inefficient will not be chosen because they deliver less education per dollar of spending. These schools that are not chosen will be forced out of the education market, just as competition forces inefficient firms out of the market. Therefore, vouchers “level the playing field” between private and public schools by removing the financial advantage currently held by public schools. Gruber indicates critics contend that the public education sector is rife with inefficiency. They point to the fact that per-pupil spending has doubled in real terms since 1970, yet the math and reading scores of 17-year-olds have risen by only about 5% in that same time period. Furthermore, the number of administrative staff in public schools has grown by 65% since 1970, while the number of enrolled students has grown by only 2%.
(U.S. Department of Education (2006a), Tables 32, 78, 108, and 162.)
The Tiebout mechanism (voting with your feet to choose the right mix of property taxes and public goods provision for you) has been used as one response to this. Some claim that due to this mechanism, there is already competitive pressure on the local schools. If local schools are inefficient, families will simply move to other towns where their property-tax dollars are spent more efficiently to produce better education. This model assumes perfect mobility and no externalities, however. Studies have found that areas with more school districts for parents to choose from feature better educational outcomes and lower school spending than do areas with fewer school districts. People do not choose an area based solely on educational quality though, many attributes are considered. The use of vouchers allow for people to live in a town they choose for non-educational purposes and choose to send their children to any public or private school they would like.

Arguments AGAINST educational vouchers include:

A) Excessive school specialization – The argument made for vouchers that schools will tailor themselves to meet individual tastes threatens to destabilize the benefits of a common educational program. By trying to attract particular students, schools could give less attention to what are viewed as the central elements of education.
This problem could be solved by requiring schools to provide certain sets of common skills or using standardized testing, but this would be more costly to enforce. In practice, the cost of enforcing these provisions could outweigh the benefit of school choice.

B) Segregation - Vouchers have the potential to reintroduce segregation along many dimensions, such as race, income, or child ability. Critics fear that children of motivated parents will move to higher-quality private schools, while children of disinterested or uninformed parents will end up in low-quality public schools.
Vouchers also might increase segregation by student skill level or motivation. As the motivated and high-skilled students flee poor-quality public schools for higher-quality private schools, the students left behind will be in groups that are of lower motivation and skill.

(Public Finance and Public Policy, Second Edition. Jonathan Gruber. Chapter 11. Pages 290 - 296 )
The reality is that vouchers may increase segregation in along some dimensions such as motivation and skill level, while reducing segregation along others by allowing minority students with greater ability and motivation to mix more with students at higher-quality schools.

C) Inefficient and Inequitable Use of Public Resources- Education is currently financed mostly through property taxes and state taxes. If vouchers were to be introduced, the current financing mechanism would no longer be viable. Total public-sector costs would rice because government would pay a portion of the private school costs that students and their families ware currently paying themselves. The goal of government is to help the undereducated, but those who benefit most from vouchers are people who currently send their children to private schools because their cost of education would decrease. This is considered to be a fairly inefficient use of public resources.
In regards to equity, income and use of private schools are highly correlated. Granting vouchers to families who are already paying for private schools is inefficient and inequitable.

D) The Education Market May Not Be Competitive- The arguments of voucher supporters are based on a perfectly competitive model of the education market. Yet the education market is described more closely by a model of
NATURAL MONOPOLY , in which there are efficiency gains to having only one monopoly provider of the good. Economies of scale in the provision of education mean that it may not be efficient to have many small schools competing with one another for students; it may be much more (naturally) efficient to have one monopoly provider instead.
The fact that education markets may be natural monopolies can lead to failures in the educational market. If a large inner-city school closes due to lack of demand, for example, what happens to its core of unmotivated students who have not taken advantage of choice to enroll elsewhere? There may not be a small school in the city that can meet their needs, and the closing of their school would potentially leave them without educational options. Similarly, how could a rural area without much population density support enough schooling options to effectively introduce competition?
Government would mostly intervene and not allow schools to go out of business and leave local students without education options. This could cause another problem though. If schools know they will be funded regardless of performance, they might not work to improve their efficiency. A tension would be created between government efforts to ensure educational opportunities for all and the ability of the educational market to put pressure on underperforming schools.
(Public Finance and Public Policy, Second Edition. Jonathan Gruber. Chapter 11. Pages 297-298)

Article on argument against education vouchers

Pioneer voucher programs in action (or inaction):
In Florida in 1999, Governor Jeb Bush signed into law a voucher program called "Opportunity Scholarships " enabling children attending failing public schools to attend private ones through state funding. Failing public schools being ones that scored the lowest rankings in most categories two years in a row and according to their standards. By 2006, still only 700 students statewide took advantage of the vouchers, with mostly positive results. Still, in 2006 the state supreme court struck down the program, claiming it is unconstitutional because Florida's constitution specifically promises a "uniform system of public schools." Follow this link to a news story about the court's decision .

On April 25th of this year (2008), the state's Taxation and Budget Reform Commission voted 19-6 to possibly overrule the supreme court's decision and send the question to voters in November. They will be voting on whether to legalize and protect school vouchers through the state constitution or to uphold the court's decision that vouchers are unconstitutional. We will have to wait until the vote takes place in November to see whether Florida's voucher program will continue or be terminated. Follow this link to a news story about the upcoming vote .

A lawsuit was filed tuesday, August 5th, 2008 by the Texas State Teachers Association against Education Commissioner Robert Scott and the Texas Education Agency over a recently adopted plan to reduce dropouts. They claim that the plan leaves a back door in Texas legislation that effectively allows the use of vouchers, where the TSTA says Scott and the TEA "do not have authority to grant public money to 'nonprofit organizations' to provide direct student services.
In response to the lawsuit, Scott said that allowing dropouts to re-enroll at a private school is not really a voucher option. He claims that "This state has a serious dropout problem. We need to be marshaling all our forces to respond to it. It's incredible that TSTA thinks that non-profit organizations don't have a role to play in reducing the dropout problem and increasing the graduation rate." Follow this link to an article about the pending lawsuit .

Free Public Education vs. Private Education

HLM Analysis of Public vs. Private Schools
"This study compares mean 2003 National Assessment of Educational Progress (NAEP) reading and mathematics scores of public and private schools in 4th and 8th grades, statistically controlling for individual student characteristics (such as gender, race/ethnicity, disability status, identification as an English language learner) and school characteristics (such as school size, location, and the composition of the student body). In grades 4 and 8, using unadjusted mean scores, students in private schools scored significantly higher than students in public schools for both reading and mathematics. But when school means were adjusted in the HLM analysis, the average for public schools was significantly higher than the average for private schools for grade 4 mathematics and not significantly different for reading. At grade 8, the average for private schools was significantly higher than the average for public schools in reading but not significantly different for mathematics. Comparisons were also carried out between types of sectarian schools. In grade 4, Catholic and Lutheran schools were compared separately to public schools. For both reading and mathematics, the results were similar to those based on all private schools. In grade 8, Catholic, Lutheran, and Conservative Christian schools were each compared to public schools. For Catholic and Lutheran schools for both reading and mathematics, the results were again similar to those based on all private schools. For Conservative Christian schools, the average adjusted school mean in reading was not significantly different from that of public schools. In mathematics, the average adjusted school mean for Conservative Christian schools was significantly lower than that of public schools(Braun). "
Hierarchical Linear Modeling (HLM) is a more advanced form of multiple and simple linear regression. For example, in educational research, data is measured as students nested within classrooms nested within schools nested within states.

" HLM " — Proprietary software

Henry Braun, Frank Jenkins, and Wendy Grigg. "Comparing Private Schools and Public Schools Using Hierarchical Linear Modeling." 14 July 2006. 7 July 2008 < >.


First Focus, a bipartisan children's advocacy organization, released a book called Children's Budget 2008 . The book looks into detail on how much the federal government spends on children. It includes information on the more than 180 federally funded programs aimed at enhancing the well-being of our nation’s children.
Key findings include…
  • For the past five years, only one penny of every new, real non-defense dollar spent by the federal government has gone to children and children’s programs.
  • Spending on children makes up only 10 percent of the entire non-defense budget.
  • The overall share of federal, non-defense spending going to children’s programs has dropped by 10 percent over the past five years.
  • Real discretionary spending on children has declined by more than six percent since 2004, while at the same time all other non-defense discretionary spending has increased by more than 8 percent.
To view the Children's Budget 2008 book, click on the following link: Children's 2008 Budget Spending (PDF file)
For more information about First Focus, visit their website: First Focus
To view this information in its entirety, click on the following link: Children's Budget Report 2008