Archives: 03/2014

Can Incentives Improve Performance of Public School Teachers?

A fundamental problem for most public schools is that teacher compensation is minimally related to performance, relying instead on years of service and credentials. So poor teachers face minimal incentive to improve or leave.

In a new study, Thomas Dee (Stanford) and James Wyckoff (Virginia) suggest this failure to employ incentives has substantial costs. Their analysis examines IMPACT, a

teacher-evaluation system introduced in the District of Columbia Public Schools by then-Chancellor Michelle Rhee. IMPACT implemented uniquely high-powered incentives linked to multiple measures of teacher performance.

Dee and Wyckoff

compare the retention and performance outcomes among low-performing teachers whose ratings placed them near the threshold that implied a strong dismissal threat [as well as] … outcomes among high-performing teachers whose rating placed them near a threshold that implied an unusually large financial incentive. …

[Their] … results indicate that dismissal threats increased the voluntary attrition of low-performing teachers by 11 percentage points (i.e., more than 50 percent) and improved the performance of [low-performing] teachers who remained.

The financial incentives also improved performance by high-performing teachers.  

These results are not surprising; as economists are fond of saying, incentives matter!  

But failure to use incentives is one reason why public schools are a bad way to subsidize education, setting aside whether any subsidy is desirable. 

Bureaucracy, Boondoggles, and Bad Behavior

In catching up on news about the federal government today, I noticed that articles fit into three categories: bureaucracy, boondoggles, and bad behavior. On any given day, it seems, the Washington Post and other outlets have new tales of BB&BB to report. No wonder most Americans want to cut federal spending.

Let’s look at the latest on BB&BB:

Regarding bureaucracy, you can’t find a better illustration that David Fahrenthold’s article in the Washington Post last Sunday. He describes an underground cavern in Pennsylvania where 600 government workers process federal pension paperwork with the use of 28,000 old-fashioned file cabinets. The paper-based process works the same way that it did four decades ago, and it takes just as long. Efforts to computerize it have failed over and over.

Regarding boondoggles, the cost of a new D.C. building for the Consumer Financial Protection Bureau has tripled to $145 million, reports the Washington Examiner. Meanwhile, a huge new D.C. headquarters for the Department of Homeland Security (DHS) is overbudget by $1 billion. When President George W. Bush created DHS in 2002, he promised that it would “improve efficiency without growing government” while cutting out “duplicative and redundant activities that drain critical homeland security resources.”

Also this week, a House committee learned that numerous Veterans Affairs’ building projects across the country are overbudget by hundreds of millions of dollars. It appears that Edwards’ Law of Government Cost Overruns is as immutable as Murphy’s Law.

Regarding bad behavior in the federal government, it’s never ending. The Air Force found out that dozens of its officers at a nuclear base have been cheating on proficiency tests and breaking other rules. And this week the Secret Service reaffirmed its reputation as the Animal House of police forces when an agent in the Netherlands for a presidential visit was found passed-out drunk in a hotel hallway.

If anything can go wrong in government, it will go wrong—and we’re all paying for it.

More on cost overruns here. Thanks to Nick and Pierre-Guy for help.

If People Are Like Polar Bears, We’ll Be Fine

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

 

The United Nations’ Intergovernmental Panel on Climate Change (IPCC) is meeting in Japan this week to finalize the second part of its latest compendium on climate change.

The first part, the Working Group I report, focused on the physical science of climate change.  The main findings of that report, released last fall, have been widely panned for not telling the truth about how the latest science is stacking up in support of modest rather than alarming climate change.

The second part, making the news this week, is from the IPCC’s Working Group II and focuses on the effects of climate change.

In an interesting piece in a blog hosted by the United Kingdom’s The Telegraph, Andrew Lilico reports that if leaked drafts are to be trusted, the new report will mark a “formal moving on of the debate from the past, futile focus upon “mitigation” to a new debate about resilience and adaptation.”

We can only wonder what took them so long to realize this—something that we have been saying from virtually day one of this whole global warming thing.

That is not to say that the new IPCC report won’t proclaim that a whole lot of bad things are going to happen as a result of climate change. It most assuredly will say that. But, as we last reported, much of that concern is overblown hype.

Here is another example:

Slovakia’s Strongman Heading for a Defeat?

A presidential election in Slovakia is usually a dull affair. The head of state plays a largely ceremonial role and, since 1993, the post has been occupied by fairly pedestrian, aging figures whose footprint on either domestic politics or on Slovakia’s reputation abroad has been negligible. 

Nevertheless, the stakes are higher in the second round of this year’s presidential election that will take place on Saturday. The leading candidate is the current prime minister, Robert Fico, whose party, Smer, has enjoyed a comfortable majority in the Slovak Parliament since the election in 2012. Fico, who has led Smer since its birth in 1999, served one term as prime minister between 2006 and 2010 and has traditionally enjoyed significant public support. A former member of the Communist Party, he once said that he “had not noticed” the Velvet Revolution of 1989, insinuating that free markets and an open political system have brought little good for ordinary people.

While presenting himself as a social democrat, Fico has successfully courted Slovak nationalists. For example, he has been a vocal opponent of recognizing Kosovo’s independence, for fears that the Hungarian-majority areas of southern Slovakia could follow the Kosovar example. While such concerns are baseless, as Slovak Hungarians display very little interest in secessionism, the rhetoric was successful in attracting Slovak voters that had previously supported fringe nationalist parties.

Fico’s cabinets have adopted several controversial policies, including the 2008 press law, which enabled politicians and companies to file successful lawsuits against newspapers. That has resulted in grossly disproportionate sanctions against Slovak media. One Slovak weekly was recently ordered to print a 54-page apology to a former member of parliament. In 2009, the weekly published an article about the parliamentarian’s company that allegedly received large payments from the European Union’s structural funds. Another weekly is currently being sued over another piece of investigative journalism. The €20 million in damages sought exceed, by an order of magnitude, the earnings of the magazine.

According to some, the presidency is an attractive exit option for Fico, whose two years in government have not produced the results that his electoral base hoped for. The country’s chronically high unemployment, especially among young people, shows no signs of receding, and many of the measures adopted by the government—including the repeal of the flat tax or the re-regulation of labor markets—have done little to foster economic growth and sound public finances.

The Most Wonderful Video You’ll See Today

The most wonderful video you’ll see today:

Watch as a deaf woman, Joanne Milne, is overwhelmed by hearing for the first time after having her cochlear implants switched on. This is just another way in which modern technology improves lives of the less fortunate. For more on technological and medical breakthroughs, follow us on Twitter.

Topics:

Obama Meets the Pope

President Obama met with Pope Francis at the Vatican yesterday. After the meeting, Obama said that he was “was grateful to have the opportunity to speak with him [the Pope] about the responsibilities that we all share to care for the least of these, the poor, the excluded… And I was extremely moved by his insights about the importance of us all having a moral perspective on world problems and not simply thinking in terms of our own narrow self-interests.”

Later, in an interview with the Italian newspaper Corriere della Sera, “Obama pointed to the Pope’s concern for income inequality, saying … ‘Given his great moral authority, when the Pope speaks it carries enormous weight.’ Continuing to focus on income inequality, Obama said, ‘And it isn’t just an economic issue, it’s a moral issue. I think the Pope was speaking to the danger that over time we grow accustomed to this kind of inequality and accept it as normal. But we can’t.’”

Writing in The Atlantic last December, I took issue with some of Pope Francis’ assertions about the state of the world, including income inequality:

Academic researchers—from Xavier Sala-i-Martin of Columbia University, to Surjit Bhalla, formerly of the Brookings Institution and RAND Corporation, to Paolo Liberati of the University of Rome—all agree that global inequality is declining. That is because 2.6 billion people in China and India are richer than they used to be. Their economies are growing much faster than those of their Western counterparts, thus shrinking the income gap that opened at the dawn of industrialization in the 19th century, when the West took off and left much of the rest of the world behind.

Similarly, in a recent ReasonTV video, I explained why more—rather than less—capitalism is good for the poor. Simply put, poor people in countries with more economic freedom earn a higher share of the national income and have higher per capita incomes than poor people in countries with less economic freedom.

If Pope Francis and President Obama want to help the world’s poorest people, they should advocate for:

  • Free trade, so that African farmers and Asian tailors can sell their goods in Europe and America free of tariffs and quotas.
  • Ending agricultural (and other) subsidies, which are the products of modern crony capitalism and benefit agricultural conglomerates and large corporations at the expense of everyone else.
  • Property rights, so that poor people can gain title to their land and use it as collateral for borrowing.
  • Privatization of education, water supply, health care and other supposedly public goods, which the corrupt and unaccountable governments in poor countries have underdelivered for decades.

The Transit Train Wreck

Investigators have concluded that the driver of the CTA train that crashed at O’Hare earlier this week slept through the stop. Moreover, she apparently had a record of falling asleep at work before. However, investigators also concluded that two back-up systems that should have stopped the train before it crashed even without a waking driver failed as well.

We’ve spent roughly $1 trillion on transit since 1970 for not much return. Capital spending before 1990 is not available, but probably followed a trajectory similar to operating subsidies (=op costs minus fares). Click image to download a spreadsheet with these and other data mentioned in this post.

Meanwhile, the American Public Transportation Association (APTA) defends its claim that recent ridership statistics represent a genuine “shift in American travel behavior.” While it admits that per capita ridership has declined since 2008, it blames that on the recession. It prefers to go back to 1995, “because after that year, ridership increased due to the passage of the landmark ISTEA legislation and other surface transportation bills which increased funding for public transportation.” Effectively, APTA argues that people will ride transit if you subsidize them enough, and so therefore subsidies should be increased still further.

(By the way, APTA responded to my statement that virtually all of the growth in ridership in 2013 took place in New York City, saying, “That statement is not true… . Many other systems across the country saw ridership gains last year.” But I never said that every single transit system outside of New York declined, only that the sum total, minus New York, declined, which is easily verified from APTA’s own data.)

APTA is correct that transit ridership bottomed out in 1995, at least according to its numbers. (Federal Transit Administration numbers are a little different and show ridership bottoming out in 1993.) But it is a stretch to say that subsidies are responsible for the growth in ridership since 1995 (or ‘93). Both operating and capital subsidies to transit have grown steadily since the mid 1960s, but ridership hasn’t always followed.

In particular, ridership declined through 1972 to about 6.6 million trips, then increased through 1980 to about 8.5 million trips, hovered around there for about a decade, then declined from 8.9 million trips in 1989 to 7.8 million trips in 1995, then increased to 10.5 million trips in 2008, and has hovered around there since then. If increased subsidies were responsible for the increase after 1995, why didn’t increased subsidies lead to increased ridership between 1965 and 1972 or between 1989 and 1995?