December 6, 2012 5:00 am

Learning curve

Georgetown University©Georgetown University

Patience is a virtue: a degree from universities such as Georgetown, can provide a lifetime income $1m higher than that of high-school graduates

One of the most important ideas in education is called “skill-biased technological change”. The idea is that scientific innovations, from the computer to the mobile phone, have made higher-skilled people dramatically more productive. But the less educated have been gifted no such growth in efficiency.

It is often cited as an important reason for rising inequality, although its role is disputed. Thanks to improved technology, bankers and lawyers can do – and thus earn – more each hour than ever before. But the people feeding them or keeping their offices clean can do little more.

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IN Urban Ingenuity

This means that, for all governments, education matters. A country where there is less education will not enjoy the fruits of innovation. Where learning is confined to the wealthy, growth could come at the price of rising inequality.

The sums involved are big. According to the Harvard Pathways to Prosperity project, the lifetime earnings gap between a US high school graduate and those with a college degree is estimated at around $1m.

The labour market is not creating new low-skilled jobs. Poor education means a life at higher risk of unemployment. In 1972, 32 per cent of jobs in the US needed less than high school graduation. Now it is 11 per cent.

That is why policy makers in the developed world spend so much time worrying about getting poor children into university. In countries like the US and UK with top universities, it is an obvious way to boost growth while containing inequality. For cities, inequality means pricing large parts of the community out of city centres.

Certainly, their task is easier than countries without world-famous universities. But it is not straightforward, requiring interventions across a range of issues from school and family life to basic form-filling skills.

First, it means getting children to do well enough at school to make a plausible application. This is a challenge, especially in the urban US where school systems are patchy and dropout rates are high.

Second, it means persuading students they should apply, and be willing to take on the uncertainty of waiting four years before joining the labour market – and debts. For young people whose families have no experience of university, that can feel like an enormous bet.

Finally, it is not enough to get young poor people into the colleges. They must stay there. Dropout rates among ethnic-minority and deprived college students are worryingly high. According to the Organisation for Economic Co-operation and Development, only 56 per cent of people who start a four-year degree in the US have graduated six years later.

The winner of the FT/Citi Ingenuity Award in education, Minnesota’s College Possible, addresses all these issues. Jim McCorkell set it up, he says, “because too few low-income students are making the critical transition to college, one of the surest pathways to a solidly middle-class life”.

It aims to raise aspirations and to dispel “the stereotype that only wealthy, privileged students are meant to go to college”. It does this in five ways: intensive exam assistance to help overcome the school disadvantage; help with applications; financial consultancy; support during the transition to college; and support during studies.

College Possible is unusual in dealing with so many issues. It seems safe to say that we can expect future projects with similar aims to win the award. Perhaps some will deal with only one link in the chain that College Possible addresses, but in an innovative way or with better data on success.

There are other big challenges out there, not least the difficulty in securing education in the poorest countries, where school and university systems are rudimentary. These countries sit in an education trap: without graduates how, exactly, do you create more graduates?

Qatar and the UAE are approaching the problem with money: they have installed branch campuses from universities in the developed world in their own countries to inject a nucleus of highly educated people.

In countries with less cash, the answers are going to require more finesse, maybe using technology to leverage up the power of graduates.

A future winner might be a nominee that overcomes other problems. One that tackles traditional gender roles that keep women out of school, or that takes on structural problems that can mean that learning does not pay. The unemployed, overeducated graduate is a fixture on the Arab street.

These are the challenges for the modern town. Cities act as pressure valves. If education systems fail, it is cities that take in the rootless and the jobless. But, with all shades of the population side by side, crowded cities can also be pressure cookers.

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