Previous Posts

  • Robert MacCulloch

The winner of the Nobel Prize in Economics in 2000, James Heckman, has given an interview with the Archbridge Institute on the topic of how much schools affect life outcomes:

Interviewer: In your research you discuss the key importance of family structure for social mobility. Why do you feel so strongly about this issue?

Heckman: The family is the source of life and growth. Families build values, encourage (or discourage) their children in school and out. Families, far more than schools, create or inhibit life opportunities. A huge body of evidence shows the powerful role of families in shaping the lives of their children. Dysfunctional families produce dysfunctional children. Schools can only partially compensate for the damage done to the children by dysfunctional families.

Interviewer: Your work on early childhood education is constantly cited as a justification for universal preschool education. Is that a policy you have recommended or what is your main focus and potential solution when you promote the importance of early childhood education?

Heckman: I have never supported universal pre-school. The benefits of public preschool programs are greatest for the most disadvantaged children. More advantaged children generally have encouraging early family lives. The “intervention” that a loving, resourceful family gives to its children has huge benefits that, unfortunately, have never been measured well. Public preschool programs can potentially compensate for the home environments of disadvantaged children. No public preschool program can provide the environments and the parental love and care of a functioning family and the lifetime benefits that ensue.

  • Robert MacCulloch

In August 2016 the Governor of the Reserve Bank of NZ made a statement which included the line that "Domestic growth is expected to remain supported by strong inward migration, construction activity [and] tourism". These three factors were the key drivers of GDP growth for many years of the Key government.

Fast forward to June 2020. As of today, immigration and foreign tourism numbers are both close to zero. Meanwhile, our construction industry, which has long been characterized by weak productivity growth, is wobbling.

In the midst of this virus crisis, are the powers-that-be now offering a different vision of NZ in which GDP growth may come from other sources? Or are they planning a return to the old model? There has been little talk of the former so I presume its the latter.

Why? Perhaps because Kiwi politicians found out that as long as more foreign tourists kept coming, house prices kept skyrocketing and inward migration soared, they didn't need to sweat about tackling the hard issues. Consequently, quality reforms that raised the long-run per capita growth rate, reduced poverty and cut inequality weren't a priority. Public demand for such reforms may also have been low since taking Easy Street seemed to be working.



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Robert MacCulloch