Low quality education as a poverty trap – Introduction and welcoming Servaas van der Berg

Department of Economics, Stellenbosch University PSPPD Project – 28 March 2011 Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union

Welcome and word of thanks to PSPPD

This research project was undertaken with financial assistance of the Programme to Support Pro-Poor Policy Development (PSPPD), a partnership programme between the European Union and The Presidency, South Africa. The findings do not reflect the position of The Presidency or the EU.

This funding has made possible research that otherwise could not have been done on this scale or in this timeframe Almost 20 people were involved in one way or another. The project analysed about 20 major datasets and produced the following outputs: • Ten Working Papers, quite a few of which will become journal articles • • • Five Policy Briefs, which are distributed to hundreds of policy makers A summary report that is also widely distributed A series of policy recommendations, flowing from individual papers, that will in time be digested and carried further in our ongoing discussions with policy makers All of this would have been impossible without the financial support of EU and Presidency through the PSPPD. It would also have been much more difficult without the enthusiastic assistance of Mastoera Sadan, Nathalie Vereen and Zsa Zsa Milongo. I wish to thank them all on behalf of the whole Stellenbosch team.

Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union 2

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SA’s dualistic school system and labour market

High productivity jobs & incomes

•

High quality schools

±10% of schools, mainly ex-white, but racial composition changed ±10% of labour force – mainly professional, managerial & skilled jobs • Produce strong cognitive skills Requires graduates, good quality matric, or good vocational skills Historically mainly whites • Teachers well qualified, schools function well, good assessment, parents involved •

Vocational training

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Affirmative action

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Low productivity jobs & incomes

Often manual or low skill jobs Limited or low quality education Minimum wage can exceed their productivity •

Some talented, motivated or lucky students manage the transition

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Big demand for good schools, despite fees

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A few schools cross the divide Low quality schools

Produce very weak cognitive skills Teachers less qualified, de-motiva ted, many schools dysfunctional, weak assessment, little parental involvement, strong union presence Mainly former black (DET) schools

Education affects labour market outcomes

4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 1,0 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0,0 Employment probability, 2005 (conditional) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Education (years)

Log of wage, 2005 (conditional) • • • Good education provides access to

top end of labour market

– (better) • jobs, higher wages

Skills shortage

at top end causes a • wage premium Oversupply of unskilled workers depresses wages at bottom end

Race between demand and supply of skills

will determine skills premium This premium and the distribution of educational attainment are currently

central to SA income inequality

4 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Education (years)

Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union

Education also determines individual prospects – with a potential vicious circle of weak education and poverty

1.SES at birth 2. Cognitive ability in early childhood 6. Labour market performance 3. Educational performance in early school years 5. Ultimate educational attainment and quality 4. Educational achievement at matric Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union

Issues

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SA school performance in perspective:

Schools and the labour market Weak performance, even in African context Poverty cannot explain this – SA’s poor fare worse than Africa’s poor The school system has two parts, one functioning fairly well, the other extremely weakly Resources bring little improvement in weak schools, due to functionality issues •

Features of poorly functioning schools:

Slow macro pacing, poor use of instructional time, low curriculum coverage • • • Low cognitive demand, weak assessment, little feedback Lack of textbooks/workbooks/reading material (some teachers think textbooks and workbooks are ‘not applicable’ in FP; libraries seldom function) Problems with second language teaching and learning

Policy directions

6 Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union

Working Papers

Gustafsson, M. 2010. “Policy note on pre-primary schooling: An empirical contribution to the 2009 Medium Term Strategic Framework”. WP05/2010 Du Rand, G., van Broekhuizen, H., & von Fintel, D. 2010. “Who Responds to Voluntary Cognitive Tests in Household Surveys? The role of labour market status, respondent confidence, motivation and a culture of learning in South Africa”. WP27/2010 Shepherd, D. 2011. “Constraints to school effectiveness: What prevents poor schools from delivering results?” WP05/2011 De Vos, M. 2011. “Quantitative and qualitative aspects of education in South Africa: An analysis using the National Income Dynamic Study”. WP06/2011 Moses, E. 2011. “Quality of education and the labour market: A conceptual and literature overview.” WP07/2011 Burger, C., & Van der Berg, S. 2011. “Modelling cognitive skills, ability and school quality to explain labour market earnings differentials". WP08/2011 Gustafsson, M. 2011. “The when and how of leaving school: The policy implications of new evidence on secondary schooling in South Africa”. WP09/2011 Taylor, S. 2011. “Uncovering indicators of effective school management in South Africa using the National School Effectiveness Study”. WP 10/2011 Spaull, N. 2011. “A preliminary analysis of SACMEQ III”. WP11/2011 Du Rand, G., van Broekhuizen, H., & von Fintel, D. 2011. “Numeric competence, confidence and school quality in the South African wage function”. WP12/2011 Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union 7

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Policy briefs - 2011

Martin Gustafsson, New evidence in the case for improving the quality of secondary

school learning outcomes

Stellenbosch Policy Brief No. 01/2011 Stephen Taylor, The vital role of good school management in improving primary

school outcomes

Stellenbosch Policy Brief No. 02/2011 Nic Spaull, Identifying policy priorities to improve outcomes for poor primary school

learners

Stellenbosch Policy Brief No. 03/2011 Gideon du Rand, Hendrik van Broekhuizen & Dieter von Fintel, The role of

educational attainment and quality schooling in reducing racial earnings inequality

Stellenbosch Policy Brief No. 04/2011 Debra Shepherd, For richer, for poorer? Can lessons learnt from wealthy schools be

applied to help poor schools deliver better results?

Stellenbosch Policy Brief No. 05/2011 Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union

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Data sets used

All General Household Surveys (GHS) from 2002 to 2009 A number of Labour Force Surveys (LFS), in particular the last two containing wage data, 2007a and 2007b Income and Expenditure Survey (IES) of 2005/6 National Income Dynamics Study (NIDS) of 2008 The South African data for SACMEQ III for 1997 PIRLS 2006 All three waves of the National School Effectiveness Study (NSES), entailing Grade 3 for 2008, Grade 4 for 2009 and Grade 5 for 2010 Matriculation (National Senior Certificate) data for 2009 9 Programme to Support Pro-Poor Policy Development A partnership between the Presidency, Republic of South Africa and the European Union