Five economics lessons for the Leaving Certificate

With the leaving cert results out and students awaiting CAO offers, we might wish to consider again some of the problems of the second level system, and in particular how basic economic principles can aid us towards a solution. Too much discussion on reform revolves into micro discussion of whether we should have compulsory Irish or replace it with compulsory C++ training. We display educational opsablepsia with regards to our own educational system and need to face its problems.

smartpeopleFirst, the good news. We have a well educated population. By and large our education system works. The OECD education statistics tell us that 37.7% of the population have tertiary (university, technical training and vocational programs are included) education, compared to 31% for the OECD on average. For secondary education this is reversed with Ireland at 35%, vs the OECD average of 44%.  This gap is narrowing over time. We have in effect a two tier labour market – a younger population with higher education attainment than an older. This is clear if we look at the age cohorts – educational attainment drops as we move into older age cohorts and we drop behind the average. However, the high level of educational skills should not be taken for granted. Looking at the data we see that in 2010 we reached a peak. The percentage dropped in 2011. With a three year lag that gets us to the leaving cert of 2008, and a two-three year lag back from the leaving cert class of 2008 gets us to the height of the bubble. Looking at the 2003 and 2004 school entry cohorts we see a drop in the % of male students sitting even the junior cert. What might under-attaining 15 and 16 y old males do in 2005-6 that would give them a large wage?

This is the first economics lesson – students can be incentivised. Right now some can be so to leave school and forgo long-term benefits for the sake of short-term cash. People have time inconsistent preferences, and engage in hyperbolic discounting. Combined with the immaturity of teenage brains in regard to risk taking we have a perfect storm.  We have bonus points for leaving cert subjects – how about bonus cash for school completion for some cohorts? There is some evidence that used in conjunction with other initiatives aimed at particular disadvantaged cohorts these incentives can work. Cash bonuses on their own wont work, but as part of a mix, much else of which we have in place, they can be valuable.


findxThen we have the bonus points. To the surprise of exactly nobody the decision to revert to a CAO points bonus for leaving certificate higher mathematics has induced more students to take it. Economics 101 would however make some other predictions. Incentives have to be calibrated to the effort required to achieve them. As things stand we have a single bonus – 25 points for D or above. Not surprisingly the % of those sitting higher math and failing it has increased – it is “worth a try” for the marginal student as a 25p boost can be enormous. There is, or should be, an enormous different in effort required to go from a D to an A in any subject, particularly honours level mathematics. So why do we not recognise that and give a calibrated reward to recognise the calibrated effort. A second economics lesson would be to have higher bonuses for higher grades to reflect this. Rewards should reflect the risks inherent in them.
lcgradesThis raises the other vexed issue of effort. Students are not stupid. They place effort where it is mostl likely to be rewarded, basic economic logic. This can be constrained by subject choice in individual schools but within that the effort-reward calculus works. Given a choice, why would anyone take Art (1% of 2012-4 higher level students get an A1) over Russian (66%)? Why would one take Business (3.9%) over Accounting (9.2%)? Such anomalies abound.  An interesting experiment was carried in Wellsely College, where a grade anchoring system was put in place. This in effect mandated the average grades across all introductory course be equalised. The effect was to chance choice, as we would expect. It reduced the prevalence of higher grades in “generous” courses and more importantly switched student enrolment away from these to other courses. We see in the higher leaving cert that the median grade (the grade that is achieved by 50% or more students) hovers around C1/B3 for most courses but for some it can be the A! and for others C2. These translate to significant differences in points. So the third economic lesson is to reduce perverse incentives if they exist in course choice. Students should be taking courses because they are interested in them, not because of the likelihood or otherwise of gaining a 5 point edge.


post-53485-0-61137900-1372094363The leaving cert results discussion was dominated by the math discussion. That in turn was dominated by the effect that it would have on both CAO higher education points and the benefits to the economy. This is utterly perverse. In 1976 the CAO points system was introduced as a clean, transparent, incorruptible way of assigning courses to students for university. In 1976 we had less than 3% of the total education cohort in universities, and so the impact of the CAO points system was on a very small number and proportion of persons. We now have 15% of the total cohort in the CAO ‘space’ so it is much more impactful. The CAO points system is like the ECB. It does its job magnificently well. The problem is that like the ECB its mandate is limited. Points are a price. The more people want a course the more expensive it is. The ESRI has shown in stark terms the effects of the points race on the secondary school experience, and it is very negative. So, the fourth and fifth economics lessons for the leaving cert as as follows.

melbourne-universityThe fourth is to increase the supply at university. This does not mean that we increase the number of places. It means we remove as much as possible the notion that we need micro courses with 10-15 entry places.  Biomechanics with Latin through Irish may get lots of demand and require 650 points, but, honestly, what benefit is that? A working group is, so far with little success, trying to persuade universities to move towards more general entry. University now, whether we like it or not, is a generalised education. So move towards the Melbourne model with a few, large entry courses in the lower years and allow students to specialise in the last two years and more especially in the masters level. Personally, I would have four undergraduate degrees;   BA in Social Science, BA in Arts and Humanities, BSc in Mathematical Science and a BSc in Life and Natural Sciences, with students in each year having to take a minimum of 25% of courses from another “domain” (Social/Arts vs Math/Science).  The ESRI study noted earlier shows a significant dissatisfaction with choices amongst  those leaving college. Give greater choice, a broader base.  Micro courses have proliferated for two reasons. First, they stoke the ego of university administrators, who can boast that they have X number of courses requiring Y level of points. Second, there is a further perception that these are to produce ‘marketable’ graduates. The reality is that what business values is the ability to learn and communicate that , not what is learned. In any case, business is not the only stakeholder.

poster-02-mi_actions-11x17The fifth is to increase the “purchasing power” of students, to engage in “quantitative CAO point easing” as it were. On this, we might note that this is not perhaps best done by the well meaning idea of the IUA to give what is in effect a subsidy to students who fail.  A subsidy, absent an increase in supply, will result in higher prices (points) and a welfare benefit not just to the students but also to the higher education institutions. Such a proposal in any case reflects a thinking stuck in the Leaving cert mode. We need to break that mode. Right now we really tend to reward only a few limited domains of intelligence. We do not reward the student who engages with the community, who is athletic, who is emotionally intelligent, who shows a heightened morality, or wonderful interpersonal skills other than via overlap with leaving cert results. Expand the range of skills for which points can be awarded, and so long as this is done at the same time as we expand the base of entry we will not see an increase in points, point inflation as it were. Focus on learning, not examinations, focus on the many skills that will be needed as a conscious, cognitive, thinking, moral, human of the mid 21 century. Greg Foley, in his ever excellent blog, waxes lyrical on the need for “networks” of differential learning institutions. However  we achieve it, we need to break the stranglehold of a single set of written, unseen exams at the end of the school cycle. We need to realise that what gets measured gets managed. And we are not measuring but a small part of the wonderfulness that is our late teenage populations skill set. Lets stop worrying that they wont be suitable fodder for the business world, and start encouraging them to show their multiple intelligences and not their memory and manual handwriting skills.


This is an expanded version of my column in the Irish Examiner of 16 August 2014

11 thoughts on “Five economics lessons for the Leaving Certificate

  1. Pingback: Ninth Level Ireland » Blog Archive » Five economics lessons for the Leaving Certificate

  2. Valerie

    Excellent article. Don’t forget in your results graph the nature of competition and barriers to entry to subjects…. A lower proportion of a grades in a subject chosen by generally less academic students because they are perceived as less difficult (examples biology, home ec) will still favour the academic who rises to the group of small fishes at the top of the large pond….apologies for mixed metaphors! This of course assumes there will always be a bell curve including a grades.

  3. Pingback: What economics tells us about how to reform the Irish School Leaving exams « Economics Info

  4. Greg Foley

    Fascinating how different people from different disciplines have different perspectives! Agree with a lot of this but worry about how we all fixate on the Leaving Cert and forget that the First Year of third level is a huge challenge for kids who might be away from home for the first time. If we were resourced properly we could achieve so much in third level by ‘deprogramming’ and ‘nurturing’ students early. But do so so we need loads of ‘manpower’ and the ability to teach in small groups. If we ‘fix’ the Leaving and then cram students into classes of 300+, much of the effort may go down the drain.

  5. Pete

    >The reality is that what business values is the ability to learn and communicate that , not what is learned.<

    Academics always say that, but they are dead wrong. People, including fresh graduates, are hired for their skills. The abilities to learn and communicate are also essential, but on their own they won't get you a job. I know this from many years on both sides of the interview desk in many different private-sector businesses.

      1. Pete

        >>” its not the role of hei to train your staff on public money for your private benefit”
        You are correct, and graduate employers know that you are correct, so they don’t ask for this when they fill out surveys. Those surveys are usually filled out by PR people who don’t know, or care, what the truth is, they just give the “politically correct” responses.
        But in reality employers, even large multinational ones, absolutely do want their staff trained on public money for their private benefit, and they absolutely do hire graduates based on skills that match their immediate requirements.

  6. timdave1234

    In our second level education, we simply need more project work instead of mostly exams, to prepare people more for the real world by thinking outside the box and communicating more effectively – skills people like Brian would have developed for his career. Also we do not have enough subjects such as legal studies in our Leaving Cert syllabus to narrow the gap between 2nd and 3rd level studies. Also it is completely unacceptable, for example, to expect a potential medical student to get As in French and English (most of our Consultants would not have had such an obstacle in their day to get a place on a Medicine course). There is more to life than having to conform to such a strict and inflexible education system. It’s not rocket science to look at what other countries do.

    1. Greg Foley

      “Need more project work”. Therein lies a gigantic can of worms. Interestingly I have always found there to be a pretty good correlation between performance in project work and performance in exams so as a method of assessment (as opposed to a method of learning) project work may not be worth the effort. And, if nothing else, the Leaving Cert is a pretty good measure of work ethic and commitment, attributes that are pretty important if you want to get through third level.


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