“Smart Money”: The Links between Education and Economic Development

“Smart Money”: The Links between Education and Economic Development Gary W. Ritter Director, Office for Education Policy

“Smart Money”: The Links between Education and Economic Development A compelling body of research links primary and secondary education to economic development and growth. • Schooling increases “human capital” • Improved human capital - health, skills, and knowledge - benefits economy through increased productivity. • Enhanced economy leads to greater investments in education and training

How Does AR K-12 Fare? • Arkansas has historically been viewed as both economically and educationally backward compared to most states. • Yet in recent years the state has shown dramatic improvement in both economic development and student performance. • In terms of the latter, the data confirm Arkansas’ educational progress

Education Improvements Over the past decade, Arkansas has witnessed… • Rising test scores, rising graduation rates • Increases in AP participation • Education reforms • Rigorous curricula (Smart Core, EOC exams, one of only 3 states to mandate Algebra II) • Accountability measures • Incentive-based reform (e.g. performance pay) • Approximately $1 billion invested into K-12 education

In terms of expenditures, Arkansas is annually spending almost $10,000 per student

And Arkansas teachers earn more than ever before

DE MD Signs of Progress in Early Grades Increases in NAEP Scale Scores Fourth-Grade Reading 1998 to 2005 data not available Source: National Center for Education Statistics/Arkansas Department of Education Significant increases

* NAEP Grade 4 Math – Closing the Gap Source: Arkansas Department of Education

Arkansas High School Graduation Rates Four-Year Graduation Rate From High School 2005-06 U.S. Graduation Rate: 68%

Challenges and Solutions • Challenge 1: We do well graduating students from HS, but are they prepared for college?

Challenges and Solutions Challenge 2: • Recently, we have done the important work of increasing standards and increasing resources. • This has likely influenced the gains we are witnessing. • Now that the resources and standards are in place, the challenge to our policymakers is to develop and implement thoughtful strategies to employ these resources well to benefit students throughout the entire state. • This is a big challenge as innovation often creates contention.

Potentially Effective Reforms • Differentiated Pay for Teachers • Critically important to draw talented teachers to difficult to staff areas (geographic and subject areas) • Merit Pay, or Performance Bonuses • Little Rock Achievement Challenge Pilot Project • State legislation on merit pay • Teacher Advancement Program • Challenge = Inertia

The Effects of Incentive-based Pay in Little Rock

And More Challenges • Avoid complacency • The settlement of Lake View is not the end of reform • Must be willing to try new initiatives (e.g. merit pay) • Must continue on with rigorous standards (exit exams) • Keep the Focus • School and district decisions must be based on Academics and Students (LRSD?) • Policy and curricular decisions must be based on what has the best chance of working … • Focus on the Evidence as compared to “this is how we’ve always done it.”

Office for Education Policy For more information contact: The Office for Education Policy http://www.uark.edu/ua/oep (479) 575-3773

“Smart Money”: The Links between Education and Economic Development