Elite Schools

I followed with interest the debate about Hamizah Nordin's choice of secondary school and the wider discussion about elite and neighborhood schools. One of the key areas of contention is whether elite schools merely possess an ostentatious ‘brand’ or truly provide a higher quality education justifying its higher costs.

Primarily because of the increasing investments in education across the developed world, this issue has in fact been at the center of much interesting economic research. These studies generally try to measure whether for instance a 30,000 USD per annum education at a Harvard or MIT produces correspondingly better economic returns (as measured by the increased future income of the student) than a 10,000 USD education at a more mundane college.

It may seem crass to reduce educational returns and ‘quality’ to merely increased future income. Yet as John Maynard Keynes, the great British economist, once put it: Economists are but the ‘keepers of the possibility of civilization’. Economic analysis deals with the quantifiable aspects of social phenomena--especially things with money signs attached, and provides a foundation for more refined analysis based on ethical, political and spiritual principles. When dealing with social issues, seemingly reductionist economic analysis is often indispensable for the possibility of clear thought.

The findings from these economic studies are in fact both surprising and instructive. Many early studies, beginning from the seminal 1963 research by Shane Hunt of Yale University, have shown that entering a college that is more selective in terms of SAT scores is positively and strongly correlated with higher future earnings. Thus it seems to be the case that attending an elite college does help a person to earn more in the future. To be exact, various studies have shown that an increase of 100 in average SAT admission score is correlated with a 3-7% increase in future earnings.

Yet a big question remains: are the increased earnings truly produced by a higher quality education at an elite school, or produced by a higher quality STUDENT? A variant of this point is the basic argument of many forum contributors. In fact Hunt (1963) did point out this ‘statistical bias’:

‘The C student from Princeton earns more than the A student from Podunk not mainly because of the prestige of a Princeton degree, but merely because he is abler. The golden touch is possessed not by an Ivy League college but by its students’

A Singaporean analogy will be how elite secondary schools take in students with incredible PSLE scores and then churn out equally incredible O or A Level results. The Midas touch of the school or simply golden boys and girls to begin with?

A number of recent studies have sought to address this problem, and the results should make egalitarian hearts leap. For instance, in an excellent Princeton University/Mellon Foundation econometric study by Krueger and Dale (1999), they selected for students with similar ‘quality’ but who attended different colleges. This is accomplished by matching pairs of students who have been accepted and rejected by the same sets of colleges, but who went to different colleges. Thus both student A and B may have been accepted by Harvard and SMU, but rejected by NUS, but one went to Harvard and the other to SMU. Then their future earnings are compared.

The findings from this ‘corrected’ study is striking. There is found to be little statistically significant difference in earnings between 2 students of similar ‘quality’ but who went to colleges of different selectivity. Thus for instance 519 matched students who went to moderately selective colleges (1000-1099 College Board scores) and highly selective colleges (1275 and above) earn much the same so long as their relative quality is similar. It appears to be golden students and not the Midas touch after all.

But before we get too carried away, there are 2 sobering caveats. The first is that future earnings may not be correlated with school selectivity, but it is positively correlated with school fees. It appears that the more expensive your college is, the higher your future earnings will be. Krueger and Dale are in fact unsure why this should be so. But one possibility is that higher fees do allow better facilities and more effective bidding for better professors. A more expensive education appears to be correlated with quality, or at least, student profitability.

How far is that relevant to Singapore schools? For one thing our fees are kept artificially low by subsidies, so school fees actually offer little guide to school expenditure and general investment in students. We might do better to look at costs than revenues. And the elite schools of Singapore do generally invest more in each student (in terms of per capita fixed and variable costs) than neighborhood schools, i.e. school selectivity and the expenses of education do run hand in hand. So far as this holds true, there is in fact a case that generous elite schools do provide a more profitable educational experience for their students than a neighborhood school.

The second caveat is linked to the first, and is directly relevant to the case of Hamizah Nordin. While for most students, there is no link between school selectivity and increased future earnings, Krueger and Dale found a strong positive link for low-income students. It appears that students from the bottom quarter of income levels do increase their future earnings significantly if they go to an elite school. This result is even stronger when it is both an elite AND expensive school.

This result corresponds to an argument made by many in support of elite schools: a truly meritocratic elite school system allows students from poor families to ascend to the higher rungs of society. The reasons for this are many. The first may be the more generous investment in education at elite schools. Other reasons may include the old boy-girl network that could be acquired and the contacts with richer friends that may elevate social aspirations. An intense atmosphere of competition and mutual emulation may also be contributing factors.

But for whatever reason, the economic analysis is clear. While we should not exaggerate the Midas touch of elite schools, yet so long as they aid students in terms of fees and benefit poor but able students like Hamizah Nordin, these institutions are in fact a help to both egalitarianism and social mobility. This is an important result that will perhaps help us to think more clearly about the true costs and benefits of elite schools. Before we dismiss them with a wave of the hand as fortresses for the snobbish and rich, we must remember that they are also havens of justice for the poor.

On a side note, schools like ACS with supposedly snobbish students can probably do more to shed their negative image by publicizing some equivalent of a ‘widows and orphans fund’ than by futile protests to shift subjective public opinion. And it will be in harmony with their Christian roots.