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Falling Educational Attainment to Further Limit Economic Growth?

Robert J. Gordan’s paper ” Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds” challenges Solow’s theory that economic growth can be a continuous process that will persist indefinitely given productivity increases improvements in resources such as technology. One of the “headwinds” that he identifies is the pleasteau in educational attainment in the United States that hasthe country falling in international ratings of academic success. According to the OECD PISA test results for 37 nations at the secondary level, US is ranked as 21st in reading, 31st in math, and 34th in science.

Dartmouth recently made the decision that starting in 2014, it will stop awarding credits to students with high Advanced Placement test scores that have traditionally replaced prerequisites or liberal arts foundation requirements for introductory level courses. As reported in the New York Times, Dartmouth changed its policy after an experiment that determined 90% of a sample of students who received a 5 on the AP Psychology exam failed the Dartmouth psychology test. The school also determined that there is no significant different in achievement between students who have taken the AP exam and students who have not taken the AP course in its introductory Psych 1 course.

This news presents two important issues for consideration:

1. The poor performance by students who have supposedly reached introductory course level proficiency, as determined by the College Board’s AP exam, may reflect problems with academic standards. This example of faltering education attainment aligns with the very challenge that Gordan proposed in his article.

OR does this recent decision only limit education attainment? because

2. The loss of AP credit translates into greater costs in the higher education system, financially and academically. Some students rely on AP credit to graduate early and save on tuition costs. Other students want to bypass introductory courses so that they can take advanced level courses ealier and more frequently. Dartmouth’s new policy may deter highly qualified students from applying and attending an institution of such high academic prestige.


  1. Will Hatfield Will Hatfield

    In economics of education we saw this trend in many schools. It is in their best interest to not allow AP scores from a purely financial standpoint. You are exactly right, AP credit allows students to complete school in 3 or 3 1/2 years. Many 100 level courses have hundreds of students in them and they are held in big lecture halls which = big money. Colleges need those 100 level intro courses to be filled to the max. On the other hand, I do see Dartmouth’s point that a 5 on an AP exam (in which teachers often teach to the test) does not necessarily demonstrate an adequate understanding of the subject.

  2. For productivity, education relative to past US accomplishments is the better metric; PISA results indicate whether we night have lots of room to improve but that (say) Korea does better has no direct impact on our productivity. Still, if we are doing worse than in the past, it may suggest that when this cohort of students enters the labor force and then begins to gain work experience 10 years down the road, they may be less well positioned to contribute to productivity enhancements than earlier generations. The link however is very indirect.

    Now, how many students in fact use AP exams to graduate early? I can recall only one W&L student who actually graduated in 3 years instead of 4, and my guess is that the same holds true at most other “elite” schools. But that may not be the case at State U. In addition, community college offers another avenue to reduce the cost of higher education, as many states have formal “articulation” agreements for those who complete their AD with a sufficient GPA.

    Two trivial points. One is that W&L may be unusual in mandating prerequisites. When I was in college, you could skip prerequisites but then got no sympathy if you didn’t do well. I can’t recall any courses that limited numbers (though there might have been some) — that’s one “hidden” use of prerequisites at some schools… Second, Solow makes no claims about the likely time path of TFP, particularly in his early work. Indeed, he and others were surprised by the magnitude of TFP, hence the subsequent work attempting to better account for the sources of growth. Of course there’s also the fact that in the [very] long run, due to diminishing returns, TFP is all that matters for growth. That brings us back to Gordon.

  3. Maggie Maggie

    I find this interesting, because I got a 5 on my AP test scores and found that it did not actually mean I knew the material. However, I feel this goes back to what Professor Davies said to us when he came to our last class. College students take classes and get A’s, but it does not mean they know the material. For example, I took Econometrics my junior year and did well. But I do not remember a large portion of what I was taught. Student’s rely so much on memorization and last minute cramming, that they do not retain much more than the broad picture. Forcing a student to retake an entry level course after getting a 5 on the AP Exam will not change this. Annie mentions “an experiment that determined 90% of a sample of students who received a 5 on the AP Psychology exam failed the Dartmouth psychology test.” Well assuming you take your AP Exam junior or senior year of high school, and the intro exam Freshman year of college, we can assume it has been 1 or 2 years since the student actually took Psychology. I think Dartmouth should run a new experiment and administer the Dartmouth psychology test to students who took the intro level college course over a year ago. I am willing to bet that the results would not be much different. As professor Davies said, it is not necessarily about retaining all the information from a course, it is more about the studying, research and analytical skills you acquire.

  4. perkins perkins

    I couldn’t agree more with Maggie and Professor Davies’s points. Also, like professor Smitka, I can’t see students who are trying to attend “elite” colleges being deterred from Dartmouth by their refusal to accept AP credit. Most of the students plan on/are forced to/want to stay at these elite colleges for four years anyway, so the AP benchmark becomes more of an indicator of how hard you worked in high school rather than a replacement for college classes.
    Going off Maggie’s point, I think problem-solving skills, the ability to work well with others, and the ability to manage a grueling schedule are the three most important things we can get from our liberal arts undergraduate education. Given the importance of on the job training and the funding that should and is being allocated towards it (see:, unless a student is at a technical or career-based institution it is important that they develop these three key skills.
    If students can grasp these core concepts, they should become more productive as they pick up on-the-job training and skills, and according to Solow, will help lead to growth. Now all that’s left is fostering a macroeconomy to help students find these jobs so that they contribute to the economy…

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