Econ 101: Is this the Best Way to Teach Economics?
Questions about the teaching of economics in high school and college.
Published December 1, 1998 | December 1998 issue
For most academic subjects—math, English, biology, chemistry—students come to post-secondary courses with at least some familiarity from high school. This is often not the case for economics, as the previous articles attest. College-level intro courses are likely the first—and only—economics courses that many students will take. Are these courses, then, and the texts employed to teach them, doing the job? A survey of economics professors provides some answers, and some ideas for change.
High School Preparation
Ten years ago, university economists William Walstad and John Soper said economics should be "added to the list of failing subjects" in the nation's high schools because few graduate with much knowledge of basic economic concepts. Their report confirmed findings of a similar study in 1970, which found that students taking high school economics had little advantage in introductory college courses over those who had no economics coursework in high school.
For some economics professors, this isn't all bad. A lack of economics coursework in high school might actually be beneficial because material doesn't have to be untaught in intro college-level courses, they say. For good or bad, economics in high school is often wrapped into other subject areas, like social studies, or watered down into an overview course. Such courses are of limited use, according to many professors interviewed for this story, who argue there is no substitute for a principles course.
"An overview course can only take the student so far," says Anthony Davies, a professor of economics at West Virginia University, "and this is arguably no farther than the student could have taken himself had he just read a good paper every morning for a semester." But courses on economic principles are rare in high schools, and limited mostly to elective, advanced-placement courses that attract relatively few students.
Student preparation for college-level economics also crosses into other curriculum areas. "A student who does not have facility with algebra, and reading and constructing graphs [of mathematical functions] is severely hobbled when it comes to understanding a college-level economics lecture," says Davies.
Douglas Gale, an economics professor at New York University, says that raising standards for high school students "would do a lot, especially training in calculus and mathematical skills generally." Not that students would necessarily prefer this approach, Gale says. "There will always be students who expect a soft, liberal arts approach to economics and they will be accommodated. But it is a mistake to think that they are learning economics."
Davies says he would even be willing to teach math to his economics students to help them better understand class material. "Many of them are so petrified of mathematics, that I can't even do this."
Compounding the problem is a lack of economics coursework among high school teachers, some say. Little research has been done on this subject, but one study reported that more than half of all high school economics teachers have six or fewer credit hours of instruction (two classes or fewer), and only 6 percent had majored in economics. One professor interviewed for this article says he recently met a local high school instructor teaching a government and economics course who had no coursework whatsoever.
But teacher training does appear to be improving, mostly for teachers already in the classroom. The National Council on Economic Education (NCEE) has created its own K-12 economics curriculum, which is available to local school districts through state councils in 48 states and 260 university-based centers.
More students are taking economics courses as well. According to a report by Walstad, an economics professor at the University of Nebraska, the relative equivalent of 16 percent of high school graduates had completed a course in 1961. By 1982, that figure had risen to 22 percent, and to 29 percent by 1987.
Viewed through the other end of the rolled-up diploma, though, that leaves a solid majority of high school students with no formal coursework in economics, and many will forego college and move immediately into the workforce. According to an NCEE survey of the state councils, only 37 states mandate that economics courses even be offered in high school, and a mere 14 states require that a student take at least one class that includes material on economics.
According to Sandra Dowling, vice president of development for NCEE, economics at the high school level "is not perceived by people as a pressing issue that [students] need to learn about."
Upon arriving in college—with or without high school coursework—what will a college student typically find? According to some university economists, many students will be overwhelmed. "Most of the time [the material] is way over their heads," says Lee Van Scyoc, economics professor at the University of Wisconsin-Oshkosh. To compensate, Van Scyoc says he tries to use examples "to scale down a lot of the theory."
Many first-year students enter economics courses expecting a continuation of their high school social studies course, according to Ross Emmett, associate professor of economics at Augustana University College in Alberta, Canada, where economics classes share many of the same traits as their American counterparts.
"What they usually get instead is an introduction to a scientific discipline, with a focus on models, assumptions, methods and empirical relevance," Emmett says. "There is nothing inherently wrong with the 'intro to the science' approach—after all, it is almost the same as what the students encounter in biology, chemistry or physics. But it does set up cognitive dissonance and unfulfilled expectations [for the students]."
Paul Heyne, textbook author and economics professor at the University of Washington, says that too many introductory courses are designed as if every student in the class is going to be an economics major, and every economics major will earn a Ph.D., and every Ph.D. will pursue an academic career. Introductory courses become "the first step toward a Ph.D.," Heyne says, with a heavy emphasis on techniques that leave most students "bewildered and alienated."
Many economics majors, though, end up outside academia, landing jobs in the "regular" workforce that diverge from their training in theory and models. Shawn Hamele, a recent graduate in economics from the University of Minnesota, works for an executive search firm specializing in accountants. Hamele says that on several occasions, professors stated openly that the course would be taught as if students were going on for master's degrees, despite the fact that few were actually planning such a career—only one of the seven students in one class, he says.
And those economics students are often rewarded for their perseverance, even if they don't pursue an academic career, according to an earlier report in The Region. Some employers prefer economics majors because they have been trained to think critically and quantitatively, and are able to see the "big picture." [See "Business Economists," The Region, December 1994.]
Still, some balance in the teaching of economics is necessary, says Harvard economics professor Gregory Mankiw. It can be easy for professors to fall into the trap of too much technical and theoretical material, Mankiw says. "After all, economics professors love economics, and often this love came quite naturally. As instructors, we have to remind ourselves that not all our students are just like us."
Some professors also point out that economics teachers are forced to push against social conditioning that invariably clashes with principles taught in intro courses. According to Gale, the rational approach of economists in analyzing social phenomena is resisted by students "partly because it is unfamiliar, partly because it threatens preconceptions, and partly because the idea of learning to think seems a rather abstract and unsatisfactory alternative to the kind of concrete, result-oriented information they were expecting."
This can play a significant a role in students' ability to grasp—and daresay, enjoy—the subject of economics. Economics professor Craig Swan of the University of Minnesota says that important core concepts in economics "are things like limited resources, opportunity cost and diminishing marginal returns. A lot of people don't like the message. They don't call it 'the dismal science' for nothing."
Every year, Heyne teaches a week-long class in Hungary. Despite the language barrier (his lectures are translated to students), he says Hungarian students understand concepts of a market economy better than his American students because the Hungarian students live in a dysfunctional economy and society, which makes them eager to learn about and understand how a market economy works.
Conversely, "Our economy works so well [students] do not think about it," Heyne says, adding that some students come to intro classes with "moral hostility" toward market transactions, believing things like business profits are "vaguely immoral." [See Heyne's article on this topic.]
This should not surprise people, nor waver the faith of economists. "People looking for easy, no-cost, free-lunch solutions to a range of problems often disagree with economists," says Swan.
The basic college textbook remains largely unchanged since Paul Samuelson published his landmark Economics text 50 years ago. With a total of 15 editions, Economics has sold millions of copies and is easily the biggest selling introductory economics textbook ever written. He is widely credited for influencing entire generations of political thought. Having been translated into 40 different languages, according to one source, Samuelson's impact is global.
Many are now looking for the next Samuelson to revolutionize economic thought. Publishing houses are leading that hunt because there's big money in finding the next Samuelson. With texts selling at about $55 to a captive market of hundreds of thousands of students, big money also is getting paid to professors for writing them.
By now, many are likely familiar with Gregory Mankiw's $1.4 million advance—sight unseen—from Harcourt Brace in 1994 for the recently published Principles of Economics. At the time, it was hoped that Mankiw would revolutionize the principles textbook, although Mankiw himself was (and is still) more self-effacing on the impact of his book.
"Economics instructors and textbook authors help determine how people view the world in which they live. It is hard to quantify, but the indirect impact on policy is probably immense," Mankiw says, but added, "It's probably a mistake to credit or blame any one person or book for [creating a particular] intellectual climate. Samuelson's book was important, but it reflected a prevailing consensus in the economics profession. If my book turns out to seem important, it will not be because it offers a distinctive view of economics, but because it offers a clear and compelling presentation of the current consensus among economists."
Upon publication, reviews of Principles were complimentary, mostly for its improvement in style. For instance, reviewers pointed out the book is only 800 pages; textbooks commonly run to 1,000 pages. Examples of current events and cultural icons like Michael Jordan and Bill Gates have scored points with instructors and students alike.
"If it hadn't gotten so much hype," Michael McElroy, professor of economics at North Carolina State says of Mankiw's text, "my reaction would have been that he had done a nice job, especially in easing off on some of the 'model for model's sake' stuff that represents economists trying to force the world to see it just the way they do, instead of finding more accessible metaphors and stories that will engage noneconomists." Ultimately, though, McElroy thinks a bigger break is needed from the standard textbook model.
Despite the presence of literally dozens of principles textbooks on the market today, there is little difference among the best-selling texts, according to Emmett of Augustana University College. "There are few texts which depart significantly from the standard fare," Emmett says. Russell Sobel, assistant professor of economics at West Virginia University, agrees, stating that popular mainstream texts "are all, in my view, substitutable."
Research backs up that claim as well. A 1998 study of seven popular textbooks suggests that academic hand wringing over textbook selection "is somewhat illusory" given the standardization among the texts and "the high degree of consensus about what material should be included and how it should be presented."
During a panel discussion on principles texts, Davies of West Virginia says he once raised the issue of organization with a senior editor of a major publisher, arguing that texts followed the same flawed order in presenting material. "His response was that he had heard that argument from others, but that no major publishing company wants to risk coming out with a text that is markedly different from the other texts on the market."
Under normal circumstances, 50,000 copies sold is break-even for publishers. The subsequent profitability of textbooks has had predictable effects, according to Gale of NYU. "The market is very conservative, and editors do not want authors to change the model that has been successful in the past."
"We all like to criticize the textbook," says Samuelson, MIT professor and Nobel Laureate, but "it's an invention like the wheel that's still with us."
What to do?
One economics professor suggests that perhaps we are getting exactly the type of economics education that we want and need. After all, that's what we're paying for, he says. Even so, is there room for improvement?
"Basic economics should be required for everyone—a year-long course in high schools, perhaps," Mankiw says. "That would greatly improve public debate over economic policy. One argument for public education is that democracy needs an informed citizenry. The study of economics, as much as any discipline, serves that goal."
Sobel, for one, says, "the core problem is that we concentrate too much on formal models, especially the mathematics and graphical analysis, and do not spend enough time on public policy issues."
This leaves students with little to take into the real world, Sobel says. He points to Samuelson largely because "it is the one that most current books are formulated like. For most students this type of book is too mathematical, too graphical and attempts to cover too much material." This happens to fit with what professors want to teach, but it might not be what students need to learn. "Instructors want to teach the students the cost curves and fancy models. Most instructors even skip all or most of the applications provided in the text," he says.
Mark Skousen, professor of economics and finance at Rollins College (Fla.) and an expert on the historical evolution of the Samuelson text, concurs that a more hands-on textbook is needed because current textbooks "don't relate very well to what's going on in the real world." To fill that gap, Skousen is in the midst of writing his own textbook that he believes does something "very simple but powerful." It begins with a profit-and-loss income statement instead of the traditional and too-theoretical production-possibility curve.
"Students grasp it immediately, especially given that half of students taking economics are business majors and have an accounting background," Skousen says. "Income statements exist in the real world. ... We can explain why the quantity, quality and variety of goods and services keeps increasing, why downsizing and upsizing occurs, why companies go bankrupt or go public, etc. I think I've really found something here."
McElroy was a little more philosophic and personal about the problem: "Economists have gotten too full of themselves, as a profession, and have turned inward. There's an implicit disdainfulness about connecting with noneconomists on any terms other than our own. We have collectively decided that our time is better spent on publications and conversations with each other rather than trying to create and continue an intelligent conversation with noneconomists. I think it's the sign of an immature science and one that may be gradually changing to a more healthy regard for educating noneconomists. But it has a long way to go."
Special study: The Economic Literacy Project