behavioural economics and education policy · behavioural economics and education policy: philip...
TRANSCRIPT
![Page 1: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/1.jpg)
Behavioural Economics and Education Policy:
Philip OreopoulosUniversity of TorontoNational Bureau of Economic ResearchCanadian Institute For Advanced Research
![Page 2: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/2.jpg)
Outline:1) Behavioral insights for how individuals(esp. children) make decisions2) Policy implications of these insights3) Pertinent examples4) Progress and possibilities
![Page 3: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/3.jpg)
"The roots of education are bitter, but thefruit is sweet" - Aristotle (384BC - 322BC)
With investment model of human capital, allindividuals perfectly understand the trade-offsYet clearly this does not apply to a six-year old,who must be persuaded that school is fun nowor given no better option
![Page 4: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/4.jpg)
lukas before.mp4
![Page 5: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/5.jpg)
Many decisions in life involve uncertainlong-term benefits and immediate costs
dieting / exercise / quitting smokingsavinginsuranceusing sun-screen
Especially Education Decisions
homework / effort / attainment practice / writing / preparation
![Page 6: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/6.jpg)
How do we wish we or our children should behave?
Happiness depends on whatyou are doing NOW andwhat you will be doing in thefuture
![Page 7: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/7.jpg)
Origins ofBehaviouralEconomicsBE applies psychological and sociologicalfoundations of individual decision making toimprove explanatory power of economics andgenerate better public policyDoes not imply wholesale rejection ofneoclassical economics, but rather providestheories for why sometimes individuals makedecisions that are not in their best long-terminterests
![Page 8: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/8.jpg)
Incorporating Present Bias(Laibson, 1997)We tend to overemphasize the present and discount thefutureWhen choosing whatwill make us happy, wetend to focus ONLY onwhat we are doing NOW
![Page 9: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/9.jpg)
Intertemporal decision making increasingly groundedin neuroscience(e.g. McClure et al. 2007)Choose between1 sip of juice in 20 minutes (30%)2 sips of juice in 25 minutes (70%)Choose between1 sip of juice now (70%)2 sips of juice in 5 minutes (30%)Different parts of brain involved inimmediate versus later decisions
![Page 10: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/10.jpg)
Incorporating Routine and Salience (Gabaix, QJE 2015)When choosing what will make us happy, it matters1) what options we think are available and2) what options come to mindAbility to think of possibilities may depend on currentstress, number of decisions to be made, expected benefit,degree of uncertainty, exposure to possibility
![Page 11: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/11.jpg)
Incorporating Identity (Akerlof and Kranton, QJE 2000)
![Page 12: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/12.jpg)
Behavioural Biases Greater in Childhood- during childhood, remarkable process of neuralcircuitry expansion and pruning- brain's ability to think about the future takes 25years to mature- gap between development of immediatepleasure system and forward looking systemlargest during adolescence- teenagers predisposed to social pressures andstresses
![Page 13: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/13.jpg)
Whether on their own, or combined, these alternativemodels of making choiceshave similar implicationscompared to social planner result:Some individuals focus too much on the presentSome rely too much on routineSome influenced too much by immediate family, friends,and mediaMistakes more likely with stress and uncertainlyMistakes more likely for children
![Page 14: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/14.jpg)
Some options to encourage welfare-improving action:makeaction (e.g. practice) only optionreduce immediate cost choosing action (make it easy/ fun)offset immediate cost with immediate incentivemakepractice or benefits of practicemore salientprovide better information about costs/benefits of practicemakepractice more socially acceptable/desirable
![Page 15: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/15.jpg)
What is a 'nudge'?
![Page 16: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/16.jpg)
"Maybe you think all this is a great breakthrough insocial policy-making. Or maybe you think there'ssomething faintly creepy about a behavioural insightsteam. If it's the latter, I'm with you."
![Page 17: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/17.jpg)
Are individuals better off from being 'nudged'?We usually can't tell, even in expectations, but sometimesmoney is left on the sidewalk (e.g. cheaper drug plans, samebenefits (Gruber, 2009), eligible for postsecondary grantsbut don't applyex-post regret f for not practicing and ex-ante desire forpractice provide suggestive evidenceExamples of effective nudges suggest long-term investmentnot explaining choiceNudges still leave choice up to individualOften cannot avoid affecting behaviour, one way or another
![Page 18: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/18.jpg)
Examples to help overcome behavioral barriers1) Make (1) schooling or (2) support mandatory3) Offset immediate costs with immediate incentives4) Offer transition guidance and support5) Provide salient reminders and information6) More structure to encouraged more learning:7) Strengthen positive identities
![Page 19: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/19.jpg)
1) Make schooling mandatory
![Page 20: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/20.jpg)
Using policy change in the U.S., Canada, and the UK,lifetime wealth increases 7-15% from an additionalyear of compulsory schooling (Oreopoulos, 2007)
![Page 21: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/21.jpg)
2) Making support (e.g. tutoring) mandatory
![Page 22: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/22.jpg)
![Page 23: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/23.jpg)
3) Offset Immediate Costs with Immediate Benefits
![Page 24: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/24.jpg)
Generally modest or non-existent effects with test scoreincentives (Angrist, Oreopoulos, and Williams, 2014)Perhaps more possibilitywith incentivizing inputs(Fryer, 2011)
![Page 25: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/25.jpg)
4) Transition guidance and support
![Page 26: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/26.jpg)
The Free Application for Federal Student Aid (FAFSA)
![Page 27: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/27.jpg)
H&R Block and the FAFSA Experiment(Bettinger, Long, Oreopoulos, and Sambumatsu, 2010)H&R Block invited proposals of interventions that would benefit low-income families, have national scalability, and inform policy in 2006We proposed integrating their tax-interview and software with theFAFSA application process to make it possible for FAFSA completion(or near completion) within minutes after completing the tax form
![Page 28: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/28.jpg)
40% increase in FAFSA filing24% increase in enrollment40% increase in FAFSA filing24% increase in enrollment40% increase in FAFSA filing24% increase in enrollment
![Page 29: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/29.jpg)
Other hurdles in transitioning to college:Choose program of studyChoose schools to applyApplication and pay feeFinancial aid applicationAccept and registerChoose coursesModify daily/weekly routine
![Page 30: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/30.jpg)
Oreopoulos and Ford, 2016
![Page 31: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/31.jpg)
The Program:High schools selected based on having low transition rates tocollegeAll Grade 12s ushered to attend 3 workshops (60-70 minuteseach) during class time (usually in computer lab)1. Choose programs of interest and try budget calculator2. Apply for college or university programs, for free3. Get started on financial aid application, email parent tocomplete
![Page 32: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/32.jpg)
56 percent increase in applications28% increase in enrollment56 percent increase in applications28% increase in enrollment56 percent increase in applications28% increase in enrollment
![Page 33: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/33.jpg)
5) Provide salient reminders andinformation
![Page 34: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/34.jpg)
Loeb and York (2015)
One year of text messageswith tips/encouragement:
20% stdev increase inteachers' rating of how childgets along with others and isdoing in school
34% stdev increase in lettersounds and lower-caseawareness
http://ready4kdemo.com
![Page 35: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/35.jpg)
Oreopoulos and Petronijevic(2015)
Electronic college coachproviding tips, advice,motivation, and personalsupport for one year:
10% stdev increase in yeargrades
compared with real'mandatory' coach
![Page 36: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/36.jpg)
'Nudge' vs. 'Support'
![Page 37: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/37.jpg)
Average End of School-Year GradeAverage End of School-Year GradeAverage End of School-Year Grade
![Page 38: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/38.jpg)
6) More structure to encouraged more learning:
![Page 39: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/39.jpg)
![Page 40: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/40.jpg)
Oreopoulos, Lavvechia, and Brown (forthcoming)Pathways introduced for Gr9 Regent Park students in 2001
![Page 41: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/41.jpg)
A 57% increase in Post SecondaryEnrollment! (34% to 59%)
![Page 42: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/42.jpg)
Financial incentive:any gap between student's financial aid and tuition iswaived, plus free transportation and free textbooksStudents must enroll full-timeMust meet minimum twice a month with ASAP advisorMandatory tutoringMandatory career and employment planning
![Page 43: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/43.jpg)
Scriviner et al. 2013
![Page 44: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/44.jpg)
Low-touch vs high-touch nudges
low-touch: easy (cheap) changes to make desiredaction more salient (e.g. text, simplification)no personal interaction, readily scalable, testableoften cost effective, but impacts generally small
high-touch: more continuous support, often involvingsocial interaction (e.g. mandatory tutoring, coaching)more expensive, but generally more impactfulsocial interaction key
![Page 45: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/45.jpg)
7) Strengthen positive identities
![Page 46: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/46.jpg)
Eccles, Wigfield, and Schiefele (1998)Treated Grade 7 students taught over 6 lectures brainworks like a muscle when challenged, mistakes arenecessary to learn
![Page 47: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/47.jpg)
Conclusionsmany behavioral barriers in educationchildren and youth especially susceptible to present-bias, overreliance of routine, and social influencesopportunities to address barriers are context specificdetails matterdistinction between high-touch, low-touchpromising results so far, with lots of room for furtherresearch
![Page 48: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/48.jpg)
Take-Aways: When promoting actions to promotelearning:Make the action the only option (extreme case)Make it easier or more funRemind individuals to do itInform why action good for themMake it more socially acceptable or desirableConnect personally, with trust and respect
![Page 49: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/49.jpg)
IMG_3964.MOV
![Page 50: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/50.jpg)
What should we nudge?high school completion (e.g. Angrist and Krueger, 1991)college attainment (Zimmerman, 2014, Cadena& Keys)program/college match (Hoxby and Avery, 2013)homework (Grodner and Rubb, 2013)classroom attendance (Dobkin et al. 2010)better understanding of college aid/costsparental investments
![Page 51: Behavioural Economics and Education Policy · Behavioural Economics and Education Policy: Philip Oreopoulos University of Toronto ... Happiness depends on what you are doing NOW and](https://reader034.vdocuments.mx/reader034/viewer/2022042808/5f878591bacd040dba1e8abf/html5/thumbnails/51.jpg)