How Shanghai dominated the international student achievement test

On the most recent PISA international student assessment tests, Shanghai, China took the top spot in all three subject areas—reading, math, and science.

Here's how Shanghai, the top performer, gets its students to achieve:

When the results of an international education assessment put Shanghai and several other Asian participants ahead of the US and much of Western Europe, many Americans were shocked. ...

Shanghai trounced the OECD average: in reading, it got a 556, versus a 493 OECD average; in science, the score was 575 versus 501; and in math, there was a difference of more than 100 points – a 600 in Shanghai versus a 496 average. ... The results left many observers with one question: How did they do it? ...

Experts ascribe Shanghai’s success to China's assessment that academic achievement is foremost the result of hard work rather than a good teacher or innate talent.

“Students not only work harder, but they attribute their academic success to their own work,” says James Stigler, a professor of psychology at UCLA who has conducted research on the Chinese educational system. “Chinese students say the most important factor is studying hard. They really believe that’s the root of success in learning.”

That emphasis on hard work is complemented by several other key practices: active engagement by parents, early efforts to build up attention spans, and families' emphasis on spending long hours in school and on homework while doing little else. ...

Dr. Miller, a longtime observer of the Chinese educational system, has seen sweeping differences in the classroom.

In one study, he sat in first-grade math classes in the US and in Beijing and tracked the number of students who were paying attention throughout the lesson. At the end, about 90 percent of Chinese first graders were still following the lesson. Only about half of the Americans were.

The phenomenon was noted in the PISA report as well: “Typically in a Shanghai classroom, students are fully occupied and fully engaged. Non-attentive students are not tolerated,” it said.

The difference in instructional techniques plays a big role, Miller says. Chinese teachers tended to spend a long time giving instructions in the beginning, while American teachers gave cursory instructions then corrected students as the lesson continued. American students’ attention wandered when they became confused.

Another difference, particularly in math instruction, stood out to both Dr. Stigler and Miller. The US teaches procedurally in math, they noted – repetition of the same procedures until a student can remember reflexively how to solve a particular type of math problem. In China, students are encouraged to understand the connections between each step of the problem so that they can think their way through them, even if the order is forgotten.

In the US, we “do things over and over again until they sink in,” Miller says. “You don’t really know something until you can explain why you do this, why you don’t do that.”

Once one student in the classroom explains a problem correctly, the next student has to explain it, too. That is often repeated until most or all of the students can confidently work their way through a problem, Miller says. It’s a bit different from the US practice of calling on one or two raised hands, then moving on.

Four more years of housing stagnation expected

RealtyTrac and Trulia expect continuing housing market stagnation:

The housing market will remain depressed, with record high foreclosure levels, rising mortgage rates and a glut of distressed properties dampening the market for years to come, industry experts predicted on Tuesday.

"We don't see a full market recovery until 2014," said Rick Sharga of RealtyTrac, a foreclosure marketplace and tracking service. He said that he expected more than 3 million homeowners to receive foreclosure notices in 2010, with more than 1 million homes being seized by banks before the end of the year.

Both of those numbers are records and expected to go even higher, as $300 billion in adjustable rate loans reset and foreclosures that had been held up by the robo-signing scandal work through the process. That should make the first quarter of 2011 even uglier than the fourth quarter of 2010, he said. ...

Mortgage rates will start to rise in 2011, further dampening demand and limiting affordability, said Pete Flint, chief executive of Trulia.com, a real estate search and research website. "Nationally, prices will decline between 5 percent and 7 percent, with most of the decline occurring in the first half of next year," he said.

Green jobs training: The road to unemployment

Green jobs are political marketing, not reality. Workers who believed the hype and retrained for these largely non-existent jobs are finding themselves unemployable:

After losing his way in the old economy, Laurance Anton tried to assure his place in the new one by signing up for green jobs training earlier this year at his local community college.

Anton has been out of work since 2008, when his job as a surveyor vanished with Florida's once-sizzling housing market. After a futile search, at age 56 he reluctantly returned to school to learn the kind of job skills the Obama administration is wagering will soon fuel an employment boom: solar installation, sustainable landscape design, recycling and green demolition.

Anton said the classes, funded with a $2.9 million federal grant to Ocala's workforce development organization, have taught him a lot. He's learned how to apply Ohm's law, how to solder tiny components on circuit boards and how to disassemble rather than demolish a building.

The only problem is that his new skills have not resulted in a single job offer. Officials who run Ocala's green jobs training program say the same is true for three-quarters of their first 100 graduates.

"I think I have put in 200 applications," said Anton, who exhausted his unemployment benefits months ago and now relies on food stamps and his dwindling savings to survive. "I'm long past the point where I need some regular income." ...

The industry's growth has been undercut by the simple economic fact that fossil fuels remain cheaper than renewables.

If you don't substantially raise the price of carbon, people will continue to get the vast majority of their energy from fossil fuels. Even if you do substantially raise the cost of fossil fuels, the "green jobs" created will likely be less than the "black jobs" lost.* That's because energy conservation—using less energy—is an essential part of reducing carbon emissions. Using less energy means that the energy industry must shrink as a percentage of GDP, while other industries grow as a percentage of GDP. The "black jobs" lost would be completely offset by more jobs elsewhere in the economy, but it is a mistake to assume that they would all be in green jobs. Many of them will be in other industries entirely.

The Obama administration has completely missed its opportunity to raise the price of carbon. If it didn't happen when Democrats controlled the House of Representatives, it won't happen with Republicans in control. Democrats seem to think that reducing carbon emissions, fighting global warming, creating "green jobs," and promoting "energy independence" can occur completely through wishful thinking. It cannot. The price of carbon must go up.

Hat tip: Jeffrey Miron

* Since oil, coal, and soot are black, I figure "black jobs" is the best complementary term to "green jobs."

CNBC housing debate

In the video, Susan Wachter is misleading. Price-to-rent ratios are out of line, not just by 1890 levels, but also by 1970-1999 levels—basically all of the pre-bubble period. From 2007-2008, prices were falling rapidly until the Federal government stepped in to prop them up.

Tea Party leader: Renters should have no right to vote

Judson Phillips, the president of Tea Party Nation, on renters' right to vote:

The Founding Fathers originally said they put certain restrictions on who got the right to vote. It wasn’t you were just a citizen and you automatically got to vote. Some of the restrictions, you know, you obviously would not think about today. But one of them was you had to be a property owner. And that makes a lot of sense, because if you’re a property owner you actually have a vested stake in the community. If you’re not a property owner, you know, I’m sorry but property owners have a little bit more of a vested stake in the community than non-property owners do.

And many libertarians think the Tea Party is a pro-liberty movement?! It's not. It's an anti-libertarian, social conservative movement.

Thoughts on unemployment insurance and the mean duration of unemployment

Harvard economics professor Greg Mankiw provides his thoughts on the optimal duration of unemployment insurance (UI) during an economic downturn:

UI has pros and cons. The pros are that it reduces households' income uncertainty and that it props up aggregate demand when the economy goes into a downturn. The cons are that it has a budgetary cost (and thus, other things equal, means higher tax rates now or later) and that it reduces the job search efforts of the unemployed. To me, all these pros and cons seem significant. I have yet to see a compelling quantitative analysis of the pros and cons that informs me about how generous the optimal system would be.

So when I hear economists advocate the extension of UI to 99 weeks, I am tempted to ask, would you also favor a further extension to 199 weeks, or 299 weeks, or 1099 weeks? If 99 weeks is better than 26 weeks, but 199 is too much, how do you know?

It is plausible to me that UI benefits should last longer when the economy is weak. The need for increased aggregate demand is greater, and the impact on job search may be weaker. But this conclusion is hardly enough to tell us whether 99 weeks is too much, too little, or about right.

The thought I've been kicking around recently is that the length of unemployment insurance should automatically adjust based on either the mean or median duration of unemployment. My hypothesis is that the economic optimum is likely within the range of 1x and 2x the mean (average) duration of unemployment.

The median duration of unemployment is currently 21.6 weeks. That means 50% of all unemployed workers are finding jobs within that span of time. (By comparison, the mean is currently 33.8 weeks.) When half of all unemployed workers find jobs within 21.6 weeks, providing 99 weeks of unemployment insurance seems a bit excessive to me. Sure, some people are naturally more employable than others. The less education people have, the higher their chances of being unemployed. College graduates probably find new jobs quickly while high school dropouts take much longer. For this reason, the mean is probably a better guide than the median.

I'll suggest a simple policy rule:

The length of unemployment insurance should automatically adjust throughout the business cycle. It should provide full benefits until 1x the mean duration of unemployment, then decline [not necessarily linearly] until being discontinued at 2x the mean duration of unemployment.

Because the mean duration of unemployment is considerably longer than the median, this will provide most unemployed workers with full unemployment benefits during the entire time they're unemployed. Those workers who don't find jobs will gradually be given stronger economic incentives to look harder and lower their standards. Workers who are still unemployed after 2x the mean duration of unemployment are significant outliers, and would be cut off, although welfare may still be available to them if they truly need it.

A downside to the rule above as stated is that it will tend to hit poorly-educated workers the hardest, because they are less employable than most workers. I'm not dogmatic about the rule. It's really just a suggestion. A simpler and more generous version would provide full benefits until 2x the mean duration of unemployment, ending with a sharp cutoff point. The key is that the length of unemployment insurance benefits should automatically adjust throughout the business cycle, using mean (preferably) or median duration of unemployment as a guide.

Let me also suggest a second policy rule:

The amount (i.e. dollars per week) of unemployment insurance benefits people receive should also vary throughout the business cycle. The amount they get should automatically go up or down in inverse proportion to the output gap, with the default level assuming an output gap of zero.

With this second policy rule, when the economy is weak payment amounts would go up, providing an extra economic stimulus; when the economy is strong, payment amounts would go down to incentivize the unemployed to take one of the many jobs available.

Update: Bentley University economics professor Scott Sumner writes in:

I favor a self insurance approach. Each worker contributes 10% of their income into a private UI account, which they can draw from when unemployed. Any funds not used can be allocated to retirement. This avoids the problem of UI acting as a disincentive to find work.

2010 is one of the warmest years on record so far

The first eleven months of 2010 are leading it to be one of the warmest years on record:

This year is on track to enter the almanac as one of the three warmest years on record globally, along with 1998 and 2005, according to a preliminary analysis by the World Meteorological Organization.

Not only that, but 2010 stands a decent chance of capturing the record, depending on temperature data from November and December, according to Michel Jarraud, secretary-general of the WMO. Global average temperatures for the first 10 months of the year are running slightly ahead of those for the same period in '98 and '05...

Preliminary temperature data for November are comparable to temperatures seen in November 2005, indicating they have remained near record levels as the year winds down.

Even if 2010 fails to capture the top spot, the first decade of the 21st century already has gone into the books as the warmest since 1850, when the instrument record began. ...

Some climate scientists caution that any one year's worth of events is driven more by natural variability than by long-term warming triggered by the released of carbon dioxide from burning fossils fuel. But when 2010's extreme events are seen in that broader context, they appear to fit long-term patterns the climate models have generally projected for a climate system responding to increasing atmospheric concentrations of greenhouse gases.

A range of studies have documented an increase in extreme heat events, a decrease in extreme cold events, and an increase in rainfall and snowfall intensity globally during the past 50 years...

The public debate about climate change is so intertwined with politics that I try to avoid politically-motivated arguments on the subject. I've never watched Al Gore's documentary, An Inconvenient Truth, because he's an environmental activist, not a climate scientist. I prefer to get my information from reputable scientific sources such as the National Academy of Science. Instead of An Inconvenient Truth, I watched the Teaching Company DVD series Earth's Changing Climate by Prof. Richard Wolfson of Middlebury College, available at your local library. These sources concur with the U.N. Intergovernmental Panel on Climate Change, but are not as alarmist as environmental activists.

Republicans attack the IPCC as biased, but the IPCC is not alone in its conclusions. As Science Magazine, published by the American Association for the Advancement of Science, once stated:

IPCC is not alone in its conclusions. In recent years, all major scientific bodies in the United States whose members' expertise bears directly on the matter have issued similar statements. ... Politicians, economists, journalists, and others may have the impression of confusion, disagreement, or discord among climate scientists, but that impression is incorrect.

Here's a graph of global temperatures from 1850-2008:

Knowing that anthropological climate change exists and doing something productive about it are two different issues. Harvard economist Greg Mankiw has a simple solution. Raise carbon taxes, and then reduce other taxes so that the overall tax burden on the American economy doesn't change.

Ron Paul defends Wikileaks... and freedom

Congressman Ron Paul defends Wikileaks:

In a free society we're supposed to know the truth. In a society where truth becomes treason, then we're in big trouble. And now, people who are revealing the truth are getting into trouble for it.

The people attacking Wikileaks—and calling for the murder of its founder—are the enemies of freedom.

House hunters afraid to buy

From CNNMoney:

Despite some of the best home-buying conditions in years— affordable prices, low interest rates and lots of choices — fear of buying has infected the market.

It has paralyzed house hunters, making them unable to pull the trigger even on attractive deals. Some are worried about making the payments, while others are convinced they'll save even more if they wait.

It's perfectly natural that they should feel that way in the wake of the housing bust, said Lawrence Yun, the chief economist for the National Association of Realtors. "It's like when the stock market is crashing," he said. "People are waiting to see if deals will get better."

In fact, home sales are down by about 25% from last year, which means a lot of people are sitting on the sidelines. And real estate agents are having to get used to the fear of buying trend.

Despite what the real estate cheerleading in the article would leave you to believe, there's still a housing bubble. In much of the U.S., homes are still overvalued. There's good reason not to buy.

One reason mortgage interest rates are so low is because inflation is abnormally low, so real mortgage rates aren't as low as they appear. In fact, we currently have the lowest level of core inflation on record. Here's a graph:

U.S. house prices fell 1.5% in Q3 2010

According to S&P/Case-Shiller, U.S. house prices fell 1.5% in the third quarter of 2010 compared to a year earlier:

Data through September 2010, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index declined 2.0% in the third quarter of 2010, after having risen 4.7% in the second quarter. Nationally, home prices are 1.5% below their year-earlier levels. In September, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down; and only the two composites and five MSAs showed year-over-year gains. While housing prices are still above their spring 2009 lows, the end of the tax incentives and still active foreclosures appear to be weighing down the market.

The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 1.5% decline in the third quarter of 2010 over the third quarter of 2009. In September, the 10-City and 20-City Composites recorded annual returns of +1.6% and +0.6%, respectively. These two indices are reported at a monthly frequency and September was the fourth consecutive month where the annual growth rates moderated from their prior month’s pace, confirming a clear deceleration in home price returns.