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Universities

When a local economy collapses, we can’t just rely on the grit of communities

This post originally appeared on the Yorkshire Universities website.

I’m a little late in reading Janesville: An American Story, Amy Goldstein’s tale of an industrial Wisconsin town in the depths of the Great Recession. The book received wide praise when published in 2017, telling the story of a community trying to pick itself up in the years following the closure of a major General Motors assembly plant. But the story has particular resonance now, as we stand on the cusp of another wave of economic upheaval. Here are three reflections.

A tale of two towns

Five years after the General Motors plant closed, the shock of vanished jobs has faded. But ‘the ways that time and economic misfortune can rend even a resilient community – a community determined not to lie down and give up – are plain to see’. Goldstein describes the emergence of two Janesvilles: one of business owners that emerged relatively unscathed, and another large group of struggling families. For this group, part of a ‘broad tumbling downhill’, the future is uncertain, incomes have halved, mortgages outstrip house values, food stamps have replaced eating out, and health insurance stops.

Inequality is at the heart of recent work by Yorkshire Universities on health and wealth, including a forthcoming report with NHS Confederation and the Yorkshire & Humber Academic Health Science Network (AHSN). Just before the pandemic struck, Sir Michael Marmot published a report showing widening regional disparities in life expectancy, including falling life expectancy for the poorest. In Yorkshire and the Humber, healthy life expectancy at birth is lower than the national average – with stark variations within the region too. Absence from work because of sickness is greater than the national average. Mortality rates are uniformly higher.

The danger is that the long-term economic impact of coronavirus exacerbates these inequalities. A briefing paper from the Institute for Fiscal Studies makes uncomfortable reading, referencing a study that showed a 1% fall in employment leads to a 2% increase in the prevalence of chronic illness:

To put this in context, if employment were to fall by the same amount as it fell in the 12 months after the 2008 crisis, around 900,000 more people of working age would be predicted to suffer from a chronic health condition. Only about half this effect will be immediate: the full effect will not be felt for two years. The shock to employment from the coronavirus pandemic is likely to be much larger than this and so we may expect a larger rise in poor health.

The poorest in society are hit hardest by recessions, driving wider inequalities in health and wealth, and splitting towns and cities into two.

The challenges of retraining

‘It isn’t simple to take someone with a high school degree and a factory job and help lead them into new work’, reflects Bob Borremans. Bob is a community leader and head of Janesville’s job centre, and faces an uphill battle despite enthusiastic trainees and injections of federal cash.

Retraining and re-skilling are obvious responses to job losses and economic restructuring. But promised jobs at the end of retraining do not always materialise, and the path to graduation is tough. In Janesville, many former factory workers turned to courses at Blackhawk Technical College funded by federal grant programmes. Despite the laudable work of the college, the average pay of those who graduate is a shadow of their pre-recession wages.

The UK’s What Works Centre for Local Economic Growth concludes that employment training programmes for adults can have a positive, although modest, impact on earnings and employment. The key to success is designing appropriate programmes. A review of the evidence by the Centre found shorter programmes (below six months) are more effective for less formal training activity, and that longer programmes generate employment gains when the content is skill-intensive. On the job training programmes tend to outperform classroom-based ones. Further and higher education providers should bear this in mind in the months and years to come.

Phoenixes vs. Planting Seeds

Janesville is proud of its ‘can-do spirit’, a trait that can be traced back generation to generation, to the industrious and hard-working communities that first attracted the likes of General Motors to the town. The problem is that a can-do spirit is, by itself, rarely enough to save a town struck by economic upheaval.

In another project, I have been exploring how world-leading research clusters have emerged in certain places – from advanced manufacturing in Pittsburgh, to life sciences in the Stockholm-Uppsala region, to the high-tech industry in Israel. Many of these have a popular ‘origin story’, often spun by an enthusiastic local press. The story usually goes something like this. The town has a proud past rooted in a particular industry. Economic calamity strikes due to wider structural forces. The proud industry is obliterated. There’s mass unemployment, and, temporarily, hope is lost. But the community is resilient and bounces back through sheer determination and hard work, attracting a new industry and forging a new, bright future – a high-tech phoenix rising from industrial ashes.

The reality is often messier, and the roots of any revival go back much further than the economic calamity. Take Pittsburgh. The steel industry in the city collapsed in the 1980s and the unemployment rate hit 18 percent. The city’s revitalisation is often explained by the grit and character of Pittsburghers, whereas the seeds of revival were planted decades before when the steel industry was at its height. Philanthropic investment led to specialist expertise being developed at the University of Pittsburgh and Carnegie Mellon University, including a new medical school, forming the foundation of Pittsburgh’s research and innovation clusters today.

There is a similar story in Sweden. When Pharmacia, then one of the largest pharmaceutical companies in Europe, merged with the US company Upjohn in 1995, around 200 research and managerial positions were moved out of Uppsala; the move was initially seen as striking a huge blow to the region. The popular narrative is that the vacuum left by the company’s withdrawal led to a frenzy of entrepreneurial start-ups and innovative ideas. But the emergence of the Uppsala cluster is the result of industrial and academic collaboration over at least 70 years.

The message here is not that people and communities are not important. Specialisation builds on rich legacies, and new clusters form around old industries. Some people – especially the highly-skilled – will thrive; employment in automation and industrial machinery in Pittsburgh is more than twice the national average. But people need to be empowered by structures and institutions that support them. Some places are fortunate to have seeds planted long ago, such as a strong university. Despite the challenges such institutions will be facing themselves, they will need to step up. For places those without, relying on grit will not be enough.

(Photo by Science in HD on Unsplash)

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Universities

When higher education interventions don’t work

I am currently supporting a higher education project in Tunisia and came across an interesting World Bank study considered to be the first of its kind. Final year undergraduates were given the opportunity to graduate with a business plan instead of following the standard curriculum, and were offered 120 hours of training that included ‘most of the components that are considered best-practice for entrepreneurship education’. The optional entrepreneurship track started in 2009/10 and has been running since.

In the first published analysis, short-term impacts were studied:

the entrepreneurship track was effective in increasing self-employment among applicants, but that the effects are small in absolute terms. In addition, the employment rate among participants remains unchanged, pointing to a partial substitution from wage employment to self-employment. The evidence shows that the program fostered business skills, expanded networks, and affected a range of behavioural skills. Participation in the entrepreneurship track also heightened graduates’ optimism toward the future shortly after the Tunisian revolution.

A second paper, published in 2019, examined the medium-term impact using the same cohort:

The medium-term results show that the impacts of entrepreneurship education were short-lived. There are no sustained impacts on self-employment or employment outcomes four years after graduation. There are no lasting effects on latent entrepreneurship either, and the short-term increase in optimism also receded… the lack of medium-term impact holds across sub-groups based on gender, family wealth, skills or social capital.

There are several possible lessons to draw, beyond the clear difficulty of achieving lasting impact. The first is that integrating enterprise education alongside existing curricula, rather than a separate stream, could be an effective alternative. The second, as the second study suggests, is that other limitations are a bigger constraint than the nature of the training, especially accessing capital (there is evidence from Nigeria, cited in the paper, of monetary grants having long-term, positive impact). The third is the importance of continued coaching, training and mentoring beyond the initial period of study.

But what really struck me was how relatively unusual it is to come across randomised control trials of interventions in higher education (and especially published studies of those where the intervention did not work). Fields such as medicine abound with multi-year trials. Primary education has also seen its fair share – this years Nobel prize recognised the work of Abhijit Banerjee, Esther Duflo and Michael Kremer popularised in the excellent book, Poor Economics. There are plenty of large-scale evaluations and analyses of higher education, particularly around student outcomes, but I struggle to think of large-scale, experimental interventions. My hunch is that, as recognition of the role of higher education in development and social change has increased, so too will demand for randomised control trials within the field.

Failures wanted

Tunis, Tunisia

The Tunisian study is helpful as it shows that a ‘common sense’ prescription (give students business and entrepreneurial skills instead of writing an academic thesis as part of their degree) to a commonly-perceived problem (unemployable graduates) simply did not work. I’d love to see more such studies. Sharing examples of what doesn’t work through large-scale, rigorous testing can be hugely valuable, albeit with the caveat that the results may not always be generalisable to other contexts. As I see it, several things need to be in place:

  1. The basic parameters of an academic study: a control group who do not participate in the intervention, careful analysis of the context and environment, benchmarking and continued evaluation, etc.
  2. An acceptance that the intervention may fail. This is why the World Bank is perhaps better placed to fund such a study than the Tunisian government, who would be less willing or able to share widely the outcomes if the project failed, or to experiment with public funds.
  3. A longer-term (multi-year) perspective with no expectation of clear answers in the short term.
  4. A process of freely disseminating the findings and sharing what has (not) worked.
  5. A sufficiently big budget to launch and maintain a long-term effort, and to provide the capacity for effective experimentation, iteration and evaluation. The World Bank’s Tunisia Tertiary Education for Employability Project runs for over five years and commits 70 million USD.

Crucially, these conditions combined distinguish a rigorous, experimental study from a public policy intervention. If you know of any other experimental, evidence-based studies in higher education – especially those that have been deemed to have not worked – please let me know by email or in the comments below.

Photos of Tunis, Tunisia from Unsplash. Credits: main image, article image.

Categories
Universities

Working for economic transformation

Last week the Overseas Development Institute published an excellent report, Working for economic transformation, on generating better jobs in low income countries. The report notes that countries need to make decisions in education policy to match labour market demand:

Promoting higher-level technical or university education, more expensive per student, can help facilitate the leap to more productive sectors. But this can come at the cost of reduced funding for junior levels of education, which might allow for a wider boost to low-productivity employment. It can also help to exacerbate inequalities in education, with tertiary places more often taken up by those from wealthier backgrounds. Increasing investment in lower levels of education tends to have a greater effect on improving attainment outcomes among the poorest. At the same time, expanding educational enrolment and attainment may reduce available funding necessary for higher-quality education, such as for school facilities, teacher training and wages. (p.28)

In other words, there is a budgetary choice to be made between strengthening schools (junior levels of education) or universities (higher levels of education), and there are clear opportunity costs for each.

In policy terms, however, education should be seen as a continuum from school to college to university, and higher education has a role to play in strengthening the stages that come before it. This role needs to be explored and expanded and encapsulated in government policy: universities can train the teachers and advise on curriculum design to strengthen junior education. Their links with businesses can ensure future skills needs are being met throughout the system. At the same time, universities can work with businesses, especially small and medium enterprises (SMEs) to support their growth and in turn their demand for highly skilled graduates. Facilitating internships and placements for students in industry further strengthens these links, and provides a technical and enterprise focus to degrees. As the report concludes:

Setting employment at the centre of development agendas requires a whole range of policies, plus coordination among these policies and of the dynamics between different sectors of the economy. Education policies need to be matched with the requirements of growing industries with productive employment potential. (p.39)

The continuum between junior and higher levels of education becomes particularly important when we consider development policy. One consequence of the Millennium Development Goals focus on achieving universal primary education is the pipeline of students who could potentially go on to study at university as the MDGs draw to a close this year. Treating each stage in isolation risks missing the opportunity to greatly increase the amount of highly skilled jobs created worldwide in the years ahead.