Lecture: MTI-CSC Economics Speaker Series — Behavioural Economics and Education Policy
Applying behavioural economics to learning and child development can help solve complex problems in education.
Read Prof. Philip Oreopoulos's presentation slides here (PDF,1.7MB).
Behavioural Economics and Education Policy
Summarised by the Social and Economics Team, Institute of Governance and Policy, CSC
GOVERNMENTS NEED TO INTERVENE IN EDUCATION
Government intervention is needed in education because it often requires one-off decisions involving costs that are definite, large and immediate, but its benefits accrue only far in the future and can seem uncertain. Such decisions are often challenging because they are influenced by behavioural biases. For example, people tend to over-emphasise present discomfort over future benefits.
Government interventions thus play an important role in a person’s education journey. These can include compulsory secondary school enrolment, paying more attention to low-income students who are less likely to enrol in university, and encouraging more parental investment in their children’s education.
NUDGES ARE RELEVANT AND USEFUL IN CRAFTING EDUCATION POLICIES
Professor Oreopoulos suggested the following guidelines when designing policies or programmes (nudges) to encourage learning:
Make learning easier or more fun;
Remind individuals to continue learning;
Inform them why learning is good for them;
Make the actions involved in learning more socially acceptable or desirable;
Connect with recipients personally, with trust and respect.
Education nudges that fuse behavioural insights with technology such as software and text messages can result in new and cost-effective ways of helping students and parents make better education decisions (see Boxes 1, 2 and 3).
Box 1: Applying for the Free Application for Federal Student Aid
Streamlining financial aid applications increases university application rates
US families fill out the Free Application for Federal Student Aid (FAFSA) form to apply for financial aid from the federal government for university students. It involves multiple application forms and requires additional information from the applicant’s parents’ tax returns. This complicated process might deter eligible families from applying.
To test this hypothesis, researchers worked with a tax services firm to integrate the firm’s interview client procedures with the FAFSA application process. Among its eligible client families, some were randomly selected for an intervention where the firm used software to extract the necessary information for FAFSA and complete most of the forms on the family’s behalf, with remaining information gathered through a quick interview.
Families who benefited from this intervention were 40 per cent more likely to apply for FAFSA, compared to a control group that received only a brochure with basic information about financial aid.
Box 2: The “Life after High School” programme
Support for students should include guidance for post-secondary education
Students from low-income families in the US are less likely to apply for post-secondary education, even if they qualify. This might be because they lack the necessary support. If so, providing them with aid and decision-making support at appropriate timings should boost their application rates.
To test this hypothesis, researchers worked with high schools where less than half the student cohort goes on to post-secondary education, to co-create a “Life after High School” programme. This programme consisted of workshops to help students choose appropriate courses, and provided help for university application processes and financial aid applications through a ‘one-stop’ website.
Box 3: READY4K! text messaging programme
Using text messages to nudge productive behaviours
Text messages can serve as simple yet effective reminders to encourage individuals to perform key actions.
To test this hypothesis, researchers randomly selected low-income parents with 3- or 4- year old children, who received text messages three times a week for up to a year. These messages provided parents with practical tips on how to get their children ready for kindergarten.
Results showed that the children whose parents had received the messages were more school-ready, with higher literacy levels and better social behaviour, than children whose parents had not received the messages.
However, it is important to fully understand the circumstances or bottlenecks before deciding on the appropriate tools to be used. For example, mandatory small-group tutoring in Chicago provided by the government may yield significant performance improvements , but a similar approach in Singapore might not lead to similar results, as many students here already have regular private tuition.
NUDGES ARE RELEVANT AND USEFUL IN CRAFTING EDUCATION POLICIES
Behavioural interventions can be classified into low-touch nudges and high-touch nudges:
Low-touch nudges can be rapidly tested and implemented on a large scale, but their impacts are short-term. High-touch approaches are required to effect longer-term changes, by addressing multiple aspects of his/her routine and environment (See Box 4). However, high-touch programmes are resource-intensive because they are based on continual social interaction (see Box 5).
Box 4: The Pathways to Education and Accelerated Study in Associate Programmes
Helping students do better in education by changing and structuring their environment
Two programmes — “Pathways to Education” and “Accelerated Study in Associate Programmes” (ASAP) — require students to attend regular mentoring sessions, mandatory tutoring classes, and group activities. Such personalised support helps students adopt better education habits.
Students who underwent either programme performed much better than their peers. For example, post-secondary enrolment rates for students in “Pathways to Education” increased from 43 to 59 per cent. University graduation rates for students in ASAP reached 40 per cent — nearly double the rate of those who did not take part.
Box 5: The University of Toronto’s “You@UofT” messaging campaign
Mentoring sessions are useful for children and youths as they are more likely to respond to those they can trust and regard as peers
In a University of Toronto messaging campaign titled “You@UofT”, two groups of students were assigned different mediums of support. The first group received tips and reminders through text messages, while the second received one-on-one coaching from their seniors.
The second group of students performed substantially better than the former — they increased their grades by 5.95 per cent (or 35 per cent of the standard deviation).
Although these coaching sessions were time and manpower intensive, their impacts were stronger and lasted longer. This reflects that a person’s habits are more likely to be changed through social interaction (a high-touch nudge) than text messages (a low-touch nudge).
|1.||For more research, see Adam M. Lavecchia, Heidi Liu and Philip Oreopoulos, "Behavioral economics of education: Progress and possibilities," NBER Working Paper No. 20609, October 2014.|
|2.||See Eric P. Bettinger, Bridget T. Long, Philip Oreopoulos and Lisa Sanbonmatsu, "The role of simplification and information in college decisions: Results from the H&R Block FAFSA experiment," NBER Working Paper No. 15361, September 2009, revised June 2010.|
|3.||See Lecture slides and Philip Oreopoulos and Reuben Ford, "Keeping college options open: A field experiment to help all high school seniors through the college application process," NBER Working Paper No. 22320, June 2016.|
|4.||See Benjamin N. York and Susanna Loeb, "One step at a time: The effects of an early literacy text messaging program for parents of pre-schoolers," NBER Working Paper No. 20659, November 2014.|
|5.||See Motoko Rich, “Intensive small-group tutoring and counseling helps struggling students ,” New York Times, 26 January 2014.|
|6.||See Philip Oreopoulos, Robert S. Brown and Adam M. Lavecchia, "Pathways to education: An integrated approach to helping at-risk high school students," NBER Working Paper No. 20430, August 2014.|
|7.||See Susan Scrivener, Michael J. Weiss, Alyssa Ratledge, Timothy Rudd, Colleen Sommo and Hannah Fresques, "Doubling graduation rates: Three-year effects of CUNY’s Accelerated Study in Associate Programs (ASAP) for developmental education students,", MDRC Report, February 2015.|
|8.||See Philip Oreopoulos and Uros Petronijevic, "Student coaching: How far can technology go?" NBER Working Paper No. 22630, September 2016.|
ABOUT THE SPEAKER
Professor Philip Oreopoulos is Professor of Economics and Public Policy at the University of Toronto. He is also a Research Associate of the National Bureau of Economic Research and Research Fellow at the Canadian Institute for Advanced Research. His current work focuses on education policy, especially the application of behavioural economics to education and child development. Professor Oreopoulos received his Ph.D. from the University of California at Berkeley and his M.A. from the University of British Columbia.