Education in a declining economy

Martin Allen

Many assumptions about education continue to be unchallenged. Most education policy makers still operate with a ‘human capital’ model of education. This assumes the higher the level of education enjoyed by the population, the greater the national economic benefit. During the early post-war period, the content of education was largely left to teachers, but as the economy declined, governments intervened more closely including promoting a more ‘work-based’ curriculum for some students – even if until the last quarter of the 20th century, large numbers of young people left school without qualifications.

Under New Labour however human capital theory took on another dimension with a series of national performance targets being established (Ainley and Allen, 2010)  By raising performance levels in public examinations, Labour not only claimed to be raising ‘standards’ but also argued that this would be reflected in increased national economic performance.  Although there are still, and probably always will be, clear differences in the education systems across the world, politicians, their advisors, but also educationalists, now pour over the details of education systems of fast growing economies; education continues to be seen as the engine of economic growth and future prosperity.

Integral to the idea about education as human capital, has been the commitment to extending participation in post-compulsory education and in HE. This is why reports that DfE figures show a small decline in participation rates for 16 year olds (  resurrected calls for the restoration of the Education Maintenance Allowance (EMA) and the abolition of tuition fees. In fact, in a ‘declining economy’ where reliable employment opportunities are very limited, the majority of young people can do very little else but stay in full-time education – their ability to make serious choices about what they do, greatly diminished.  In this context, the cancellation of EMA should be seen as an attack on young people’s living standards rather than encouraging them to swap school for (non-existent) work.

Likewise the raising of the ‘participation age’ to 17 next year is unlikely to be met with the level of hostility that resulted in response to RSLR (raising the school leaving age to 17) in the 1970s and with schools and colleges now unable to threaten withdrawal of EMA payments for non-attendees, there are likely to be large numbers of students only nominally enrolled.  Large numbers will continue to work part-time while they study – although evidence suggests that even these sorts of employment opportunities are drying up – but still aspire to ‘something better than Sainsbury’s jobs’[i].

Despite the increases in fees and to the surprise of many, the number of university applications from school and college leavers appears to have held up  (   While most graduates will start on salaries well below the recent Association of Graduate Recruiters survey ( figure of £26,500 for leading graduate employers, it still remains the case however that those with degrees earn more than those without. In other words having a degree still improves one’s relative position in the jobs queue. The fact that students will not be required to make any loan repayments until they  earn £21,000 – a figure approximate to the ‘median’ wage of The Office for National Statistics’ Annual Survey of Hours and Earnings (ASHE)  of £20,801 might also be a key contributory factor.

As if to mock the ‘human capital’ model, eminent economist David Blanchflower, has recently argued that an expanded university system could play an important role in ‘keeping young people off the streets’ (quoted in Allen and Ainley 2012). Of course, staying in education is much better than ‘doing nothing’ but far from vindicating the human capital theory skills argument, this illustrates how the collapse of labour market opportunities is as much the consequence of a lack of demand – with the young becoming  a 21st century version of Marx’s  ‘reserve army of labour’ (Ainley, 2011).

The increasingly ‘dysfunctional’ nature of education – in otherwords, the lack of fit between official objectives of education and its actual reality is unsustainable. In declining economies the cost of maintaining the education service obviously becomes a key issue and intensifies ‘outsourcing’ and semi-privatisation. Additionally however, there is increasing awareness that education needs to be restored to an agent of social control rather than seen to be promoting (illusionary) mass social mobility. Nico Hirtt (2011) provides an international perspective for this new kind of education-economy correspondence, arguing in a period of high unemployment and labour market polarisation only ‘basic’ education is required for the majority.

Despite arguing his reforms reflect what happens in education systems of fast growing economies; for Michael Gove the real issue is that too many young people have been doing well in examinations. Rather than Labour’s ‘excellence for everyone’ it needs to be something reserved for the few. So, A-levels must become harder and if there was not outright opposition from the Liberal Democrats, O-levels s would be brought back in place of GCSEs. ‘Vocational learning’ also needs to be overtly practical activity rather than being ‘applied’ versions of academic subjects. Thus Gove’s policies, while appearing openly reactionary (Allen, 2012) also reflect a new reality about the changing relationship between education and the labour market.

Such a change in direction poses new issues for education campaigners defending an education system essentially constructed around an expanding economy and an aspirational society; but it also creates space and allows huge opportunities to develop a new perspective about the role education could have and what it could do.


Ainley, P. ‘Education and the Reserve Army of Labour’ Post-16 Educator Issue 59 (2011)

Allen, M.  ‘Back to the grammar school’ Education for Liberation Issue 5 (Spring 2012)

Ainley, P.  Allen, M (2010)   Lost Generation?  New Strategies for Youth and Education Continuum

Allen, M.  Ainley, P (2012)   Why young people can’t get the jobs they want or the education they need?    Downloadable at

Hirtt,N  (2011)   Competencies, polarisation, flexibility: European education policy in the era of economic crisis  in Hatcher, R. Jones, K.  (Eds.)  No Country for the Young  Tufnell (2011)

[i] Part of a sixth–form student survey 2004

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