Once the dust settles, it will dawn on us that much of the extra R57 billion allocated to higher education will be wasted as half the beneficiaries drop out. Why? Because their educational foundations are too shaky to cope with the demands of university or college. Over the next three years, more than a trillion Rand will be spent on basic and higher education, but just one percent of that will go to early learning programmes. When will we confront the reality that homeopathic doses of early learning just won’t work?
This statement probably raises the ire of academics trying to protect the quality of universities in South Africa; and therein lies the rub. Everyone is batting for their own team. We split responsibility for the education of our children across three government departments, namely social development (for preschool education), basic education and higher education. Each of these departments competes separately for public funding, as do their respective special interest groups. To my knowledge, these three departments and their backers never come together and ask the simple question: “How should the total money available for education be allocated to get the best results for our nation”?
Think of public funding in education as an investment portfolio to be optimised for greatest returns. Now imagine if we had a trillion Rand to invest and could start from scratch. We would direct a substantial amount to young children, because early learning lays the basis for subsequent returns to education and training. Then, we would put a good chunk into schools, and top off our portfolio by investing in college and university. The Nobel economist James Heckman has shown that this pattern of investment would give the highest economic returns. It would also promote social justice.
Of course, the problem starts when we have to assign real quanta to each level – and that is not an easy job for even the most disinterested spectator. To begin with, the unit cost of study at a university or college is much higher than the activities of an early learning centre. So, we would first have to convert the entire bucket of money into units of early, basic and higher education respectively; but that would require agreement on what comprises the minimum effective spend at each level. Thereafter the allocation would be relatively simple, assuming we were starting from a clean slate: First, ensure that every single child has a good foundation through universal early childhood education. Then ensure that he or she completes school. Finally, channel the remaining funds to select students for higher education.
The dilemma arises because we are not starting from scratch. In South Africa, relatively few children (about 30%) receive quality early childhood education, nearly all start school but only half complete it, and less than a quarter proceed to college or university. The real question is where to direct the next available Rand for education. This is where the analogy of a single investment portfolio breaks down, because there are two distinct economies operating in South Africa. In a developed economy, it makes sense to invest more in higher education. In a low-income economy, returns will be highest when funds are directed towards early education. They tug in different directions, but fact is that the country will only benefit from higher education if students succeed – and that depends on a solid educational foundation.
Compounding the allocative dilemmas are massive service inefficiencies that destroy public value. For example, every child has a constitutional right to basic education, but only half are able to assert that right fully. The other half drops out – humiliated by repeated failure or pushed out by officials in Grades 10 and 11 in order to embellish the national senior certificate results. Of course, if more children completed school, we would need more schools and more teachers. However, falling failure rates would offset these additional costs. For example, we calculated the fiscal cost of failure of just one cohort of children stuttering their way through a poorly performing primary school in the Western Cape. It amounted to a sunk cost of R40 million – in just one school. If all those children were to pass first time around, there would be more than enough money for all of them to complete school! There are enough funds for basic education; it is just badly spent.
Higher senior certificate pass rates have driven up the demand for scarce places at public colleges and universities. Even so, only one in six young people attain the bachelor’s pass necessary for admission to university, and most of their parents cannot afford to pay some or all of the costs. Hence, the case for an additional R57 billion to higher education, much of it to start funding the ‘missing middle’ – namely students from families with a total income between R122 000 and R600 000.
From a purely economic point of view, higher allocations to the ‘missing middle’ could be viewed as a relatively efficient investment, in that only a third of middle class students drop out compared to two-thirds of poorer students. Few would be brave enough to make that argument, at least not in public. In fact, it is a moot point because our nation will be torn apart if the divides of class and race continue to widen. Access to higher education for poor students is the bridge to a safer and more profitable society – and the price is worth it if they succeed. For that to happen though, they need to be well prepared.
I don’t know exactly how much money should be spent on early education compared to the rest, but it should certainly be at least 10% of the total education budget – not 1%. International evidence is that we would get at least ten times our money back. The die is however, cast and the funding already fully allocated to higher education. It is a bit like putting high-octane fuel in an old skorokoro of a car – unlikely to boost performance until the entire engine is overhauled.
From a human capital perspective, the primary engine of long-term economic growth is our young children, who are eager to learn but mostly denied the opportunity. Ultimately, proper investment in them will improve school outcomes, reduce school and college failure rates and improve national productivity. If that is indeed our goal, the next push – from all of us – must be for any new money to go to early childhood education.
First published in the Cape Times on 26 February 2018.
Click here to read more about the Heckman Equation.