The choices we made but never decided upon, part I.

Let us pretend you are the benevolent elected dictator in Australia. It is 1980 and you have to decide on education and migration policy. Your wily political adviser comes to you with the following plan: he tells you it would be popular and cheap to stop inflicting difficult and painful education on Australia’s kids, instead importing foreigners who have gone through the pain of elite education.

Your adviser points out the many advantages: you can halt pay increases for teachers immediately which, as Andrew Leigh so nicely showed, gradually dumbs down the stock of teachers, particularly at the bottom end of the market. The incoming migrants have to buy a lot of stuff when arriving so you get immediate boosts to the economy, quite apart from the free human capital walking in. You let those with a chip on their shoulder regarding the philosophy of current education do their thing. It’s the road of least resistance on all sides.

After some reflection you realise it’s a brilliant plan. All your kids are winners, none of them failing a class and each of them frequently getting rewards for breathing quietly, whilst they will end up in admin jobs where they mainly write reports for other admin people. The bright kids can invest in networks and fight it out with the other networkers to become the managers. Meanwhile the ‘tech’ foreigners do the hard yakka in the mines and behind the scenes. What is not to like about this joint proposal on education and visas?

The only thing not to like about the proposal is that it was never proposed. It was never consciously decided upon. But we ‘sort of’ did it this way anyway!

As far as I know hence, this choice was never consciously debated in Australia in the era of the 1980s, the Dawkins reforms. There wasn’t a clear first move towards it, with both Australia’s education and visa policy subject to numerous independent reviews, white papers, and complicated deliberations; all involving many heated debates about lofty goals and utopian visions, but none of which to my knowledge led to a conscious choice for the joint proposal above.

Yet the proposal above does describe how our education and visa policies actually co-evolved in the last 30 years: it is as if we consciously decided upon this path 30 years ago. Worse, it is as if we consciously decided upon it, and then purposely muddied the waters with thousands of pages of text pretending that we were choosing something else.

Whilst dumbing down schools and universities has become an art-form in itself(see, in particular the recent PISA results strongly suggesting that our school system is lagging internationally and this book on university decline), the reason that it has managed to go on without serious national backlash is because of the visa system: Australia’s industry can get the skills elsewhere, whilst most home-grown kids get good jobs anyway(with notable booms in the number of HR positions). In line with the large US-based debate on skill-biased change, one emerging view of the Australian labour market is that it too has a very skilled top end but with lots of workers not using all that many skills at all, stuck in dead-end jobs. Also, the resource boom has reduced the importance of human capital in the Australian economy via a Dutch disease effect.

It is not hard to see in hindsight what the lock-in mechanisms were to cement the choice: with human capital walking in for free, the pressure to improve elite education at university never materialised; with no pressure to improve schooling, the temptation to reduce teacher pay and give in to the hundreds of reform plans that effectively meant more administrators and less teachers was too hard to resist. And once the reliance on overseas skills became ingrained, there was a constituency of employers who became used to attracting foreign workers and thus no longer wanted to revert to domestic ones.

Similarly, the visa policies followed a road of least resistance: industries wanted skills Australian schools and universities were no longer providing, so politicians opened the gates and overseas countries provided the skilled foreigners who came for the great culture and wealth Australia has to offer.

And if you think about it objectively, the choice is not a bad one to make. It has basically allowed a generation of Australian kids to grow up in the happy belief that they are skilled without having to really push themselves, while at the same time allowing foreigners to improve their lot in life by relocating here. Where is the loss, one might ask? Australian culture is still doing fine and our country is still quite empty so the choice can be extended into the future without much trouble. It is certainly much easier politically than tackling the educational institutions, so why bother? As long as the boom lasts, the road-of-least resistance is to maintain the current course.

Author: paulfrijters

Professor of Wellbeing and Economics at the London School of Economics, Centre for Economic Performance

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