Austin Travers
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The Value of Education Spending

It is an undeniable truth that education has a huge effect on one’s life. The skills and knowledge gained throughout schooling are a boon for your entire life, anything from basic mathematics to reading comprehension skills. It has long been assumed that a higher level of school quality results in a more productive individuals and, on a broader scale, better schools result in a more productive country. Developed nations continue to look towards investments in their school system as a way to guarantee their economic future, with the United Kingdom spending nearly 10% of its national budget on education. The education secretary, Justine Greening, sought “increase in core funding of £1.3bn for schools over two years”. It is clear education spending is a sector that the United Kingdom does not hesitate to further invest in.

While the general logic behind the idea that better schools are a prerequisite for improving the lot of the poorest in our society seems sound, it is theorized that there is a point of diminishing returns with investment into a nation’s school system, a breaking point where state and private investment in general prosperity will have a greater effect on boosting the economic productivity of an individual and the society as a whole, rather than further investment in schooling. The unfortunate truth is it is entirely possible that the United Kingdom has already reached this point.

The Heyneman-Loxely effect explores the connection between a families’ socio-economic status (based on income, education, and occupation) and school quality as determinants for an individual’s economic productivity. It is common sense to believe that education and your family’s status are equal predicators across all nations regardless of their economic development. However research may show this idea to be a false.

While school quality is still the major determinant in poorer, developing countries, in richer countries the socioeconomic status of a family is much reliable indicator of an individual’s future economic productivity. Essentially the theory surmises that, in developing nations, the vast gulf in quality between good and poor schools mean that attending a good school will have a fundamental impact on your future. However within developed nations, such as the United Kingdom, all schools reach a certain standard, and provide a core curriculum of useful and important knowledge. When this is the case the family’s socioeconomic status, which can be linked to the general prosperity of the nation, serves as a better predictor of the future economic productivity of an individual. A wealthier and more economically productive society produces a new generation that is more productive as well.

The cost of schooling is on the rise throughout the United Kingdom and it might be assumed that because the government and its citizens are putting more money into schools, the investments will bear the fruit of increased productivity in the coming years. Unfortunately this assumption might not be correct, and the seeds of productivity may have been buried with ill begotten knowledge. Programs such as vocational training or tax breaks to small businesses are more likely to increase the general prosperity of the population, and consequently raise the socioeconomic status of the population en masse. A higher socioeconomic status across the board will translate into a more lucrative investment for the British government then a well-intentioned investment in education.

The United Kingdom currently ranks 6th among developed nations for education, and it is entirely possible that the country has long passed the point where education investments outstrips economic well being in terms of returns for long term economic productivity. While improvements to the school system are often the priority of those who wish to “look towards the future” it might be time to realise that looking toward the future can best be done by improving the general prosperity of individual’s and the country as a whole.

Austin Travers


  1. October 17, 2017

    Great read with some cogent points and incisive conclusion