This might just be an example of what we were talking about

This Daily Show montage makes me feel slightly less paranoid about suggesting that some people might go out of their way to undermine teacher's unions.

From Jonathan Cohn:

The Daily Show - Crisis in Dairyland - Odor in the Capitol Building
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Does running schools like a business actually argue for keeping LIFO? -- part II, the need for layoffs

In part I, I discussed the implications of LIFO (Last In, First Out) and non-LIFO lay-offs from a business perspective, particularly how LIFO, though not ideal from a management point of view, did offer certain advantages. (Just to be clear, as I said in the last post: "It's important not to confuse headcount reduction, which we're talking about here, with cleaning out the deadwood, where how long a person has been with the company should not be a factor.")

This leads to a bigger question: what are the reasons a company would want to have lay-offs and other forms of head count reduction? Different situations suggest different policies so you can't have an intelligent conversation about lay-off without first establishing the context.

To keep things simple, let's talk about three common situations:

Permanent drop. You are simply going to need fewer employees in the foreseeable future because of a drop in demand and/or a rise in productivity;

Cyclical drop. Your need for employees has decreased sharply but you anticipate ramping back up in the not-too-distant future;

Non-headcount driven lay-offs. Your need for employees hasn't actually dropped but lay-offs allow you to accomplish some other, almost always unstated, goal such as replacing highly paid employees with cheaper substitutes, getting rid of union leaders or creating patronage positions.

An example of a technique that works well in one situation but not another is reduction by attrition. Since permanent drops tend to be slower and can often be anticipated well in advance, you can frequently deal the problem by curtailing hiring and possibly offering some incentives for early retirement. This will take longer but given the potential for disruption that comes with approaching lay-offs and the danger of chasing away the people you need to stay (who are generally the most employable), there is a lot to be said for the attrition approach.

In the case of a sudden cyclical drop, the opposite advice holds. Cyclical drops often give less advance warning and by the time attrition shows results you might be on the other side of the cycle. This would mean you could have people exiting at the very time you start to need more employees.

To further complicate things, there's another issue managers often need to face when dealing with cyclical drops. Lay-offs need to be handled in such a way that the company will still be able to attract high quality applicants in the near future. In other words, you would like to maintain a reputation as a great place to work even while you are laying off a large portion of your workforce.

When applying these ideas to schools, two facts are particularly relevant:

First, not only is education a labor-intensive industry, but the primary workforce (teachers and administrators) have to have at least a bachelor's degree and need to be certified and vetted;

Second, the attrition rate is very high for teachers in their first few years.

Since automation and outsourcing are not big factors in education, permanent job losses in a district generally are caused by demographic shifts and possibly the introduction of charter schools. In either case, these are relatively slow and predictable phenomena. With competent management on the state level, most if not all of these cases can be handled by adjusting hiring practices.

Cyclical drops are generally caused by economic downturns. I've said before that I believe panicked, pro-cyclic government lay-offs are bad ideas in general. Furthermore, I am absolutely certain that there are ways to make state budgets less vulnerable to these downturns. Having said that, the most popular way of addressing current budget shortfalls is to get rid of large numbers of teachers and since there's no reason to believe that's going to change in the foreseeable future, how should we handle this situation?

Here is where a couple more arguments in favor of LIFO pop up. Remember, we are talking about reducing staffs to suboptimal levels. That implies that at some point, probably within the next two to four years, we will want to start increasing headcount. Given historic attrition patterns, it is safe to assume that a large number of the newer teachers will leave as soon as the economy picks up which happens to be when you most want to expand headcount.

Then we get to the asymmetry of information problem I discussed in a previous post:

We take our already somewhat understaffed schools and lay off, let's say, 200,000* teachers selected based in part on some quality metric. We then run the schools severely understaffed for the next year or so until state revenues recover.

That 200K will be made up of three groups, the good, the bad and the better-than-nothing. The good are effective teachers who end up on the list through a combination of bad luck, bad metrics and bad administrators (go here to see how the last two can work together). The bad are teachers at the very bottom of the quality scale. The better-than-nothing are teachers who aren't all that effective but are probably still at least as good as most of the people you could get to replace them.

Given the flaws in our system of ranking teachers and the innate difficulty of the problem, a fair number of good teachers will end up on the list. Likewise, given the problems with recruiting teachers for problem schools, better-than-nothing teachers will continue to make up a large part of it.

The upshot of all this is that, given population growth and the high level of teacher attrition, you will need a substantial number of the people you laid off to come back if you are to have any hope of meeting staffing targets. This wasn't as much of a problem under last-in/first-out for a couple of reasons. First, the attrition rate for new teachers was so high that many of the teachers you laid off wouldn't have been there in a couple of years even if you hadn't let them go. Second, leaving under last-in/first-out carries minimal stigma. For those who really wanted to it was easy to get back into the field a year later.

Under the 'reform' system, there is a serious stigma and a deadly asymmetry of information problem. Keep in mind that administrators are basically stuck with new hires for a year (you try finding a certified replacement in, say, November). They know that a teacher laid off under that system might turn out to be first rate, but do they really want to take the chance?

Let's say 100,000 of the laid-off teachers fell into the need-them-later category. We have screwed these teachers out of contractually obligated compensation, scapegoated them for all the problems in the education system and made them unemployable in their chosen field. Would you come back under those circumstances?

Which brings us to the third kind of lay-offs. It may seem strange to modern ears, but teaching positions once fell under the spoils system. That's one of the reasons that teachers and other public employees have so many job protections (from Wikipedia: "Louisiana, under state education superintendent T. H. Harris, led the move to establish a teacher protection policy in the 1930s because of past political considerations in hiring and dismissal of educators").

In addition to the political advantages of having lots to hand out, mass lay-offs can be devastating to unions, particularly when there is some potential for administrators to game the system. LIFO offers a considerable degree of protection against this abuse (most union leaders aren't first or second year teachers) and it completely blocks the practice of getting rid of certain teachers just because they're highly paid.

It is easy to forget that practices like LIFO and tenure were put in place to discourage people abusing their power. If you take these practices away without replacing them with other safeguards, you can't reasonably expect everyone to resist the temptation to abuse them again.

Does running schools like a business actually argue for keeping LIFO? -- part I, the nature of layoffs

Last In First Out (LIFO) has become one of the causes célèbres of the educational reform movement, a handy, easy to enunciate little acronym that beautifully captures what's wrong with our current system.

But if we really wanted to run schools like a business, just how wrong would LIFO be? This may seem like a strange question. After all, the reform movement is often portrayed as the domain of show-me-the-data empiricists and clear-headed economists. Surely anything they suggest is going to be based on sound business principals.

Here's how one of those economists puts it:

An economist myself, let me try to explain. Economists tend to think like well-meaning business people. They focus more on bottom-line results than processes and pedagogy, care more about preparing students for the workplace than the ballot box or art museum, and worry more about U.S. economic competitiveness. Economists also focus on the role financial incentives play in organizations, more so than the other myriad factors affecting human behavior. From this perspective, if we can get rid of ineffective teachers and provide financial incentives for the remainder to improve, then students will have higher test scores, yielding more productive workers and a more competitive U.S. economy.

The trouble is, having been a well-meaning business person myself (more recently than I was a teacher), and having built hiring and retention models for a couple of big companies (let's just say you've heard of them and leave it at that), most of the reformers don't seem to approaching this the way a business would, at least not a well-run business.

LIFO is a compromise, but not always an unhappy one. Unions would prefer no lay-offs at all. Companies would prefer no restrictions at all on who they let go. As a solution to this conflict, LIFO isn't perfect but it does offer some positives for both parties.

Though employers complain loudly about LIFO, they often end up resorting to something close to a de facto form of the practice when left to their own devices. Established employees have more experience, training and institutional knowledge. They tend to be more stable and reliable, more invested in the job and in the community, much less likely to make a dash for the door when the economy turns around and you find yourself understaffed. Removing them can disruptive and can lower morale.

(It's important not to confuse headcount reduction, which we're talking about here, with cleaning out the deadwood, where how long a person has been with the company should not be a factor. Even there, though, companies will often go to alarming lengths to avoid dismissing an established employee, even one who has cost the company massive amounts of money -- buy me a beer sometime and I'll tell you the examples that don't make it to the blog.)

If you don't have a transparent and reliable performance metric like sales, the consequences of deviating from LIFO can be even worse. Your best qualified and most ambitious employees tend to jump ship (Dilbert's 'brightsizing' writ large). Between the people who are definitely leaving and the uncertainty over who will be let go, a kind of mass learned helplessness can take take hold. As a manager this is not something you want to deal with.

For employees, the advantages are more obvious. LIFO offers a deferred compensation package where the compensation is security. For most of us, the demand for security increases as we age. We start families, sign mortgages, start getting serious about saving for retirement. Viewed in this light, LIFO starts to look like a case of markets doing a remarkably good job of allocation. Employees get security when they value it most and in exchange are willing to work for lower wages. (looks kind of like a win for Adam Smith)

There is, of course, a more immediate need for LIFO in many cases. It is the most effective means of preventing employers from using lay-offs as cover for improper dismissal. The classic example here is punishing employees for their role in a union. This was the issue that so offended Jonathan Chait when the victims were journalists.

Chait's position on teachers was notably different, which is interesting because not only is the potential for the abuse that Chait was implying also a concern for teachers; it is accompanied by other, even greater concerns caused by the nature of teaching and the org charts of schools.

Teachers have three primary roles: instruction; counselling; and evaluation. Because we have a complex, multidimensional, badly defined target variable and some of the nastiest confounded data you'll ever see, every method suggested for measure teacher effectiveness has been either overly-complicated, opaque, unreliable or some combination of the above and all seem to have the potential for gaming by unscrupulous administrators.

An experienced and highly respected superintendent I knew used to tell new teachers, "never trust a superintendent," and while all but one or two of the administrators I have dealt with have been dedicated professionals, I understand where he was coming from. The nastiest politics I have ever seen have been at school board meetings. That's the world administrators have to survive in. If they're successful they can be looking at a plum job in a large (but not huge) district making 170K. If they're inept they can find themselves stuck as assistant principals making little more than they made as teachers.

Put another way, it is entirely possible for a few angry parents and a couple of political missteps to cost a principal fifty thousand or more (possibly quite a bit more). As mentioned before, evaluation is part of a teacher's job and a tough grader will generate more than a few angry parents. This is one of the reasons we have tenure.

Though it's rare, I have seen principals pressure teachers to change the grades of students with influential parents. It is also rare but not unheard of for principals to shift difficult students and unpleasant classes away from allies on the faculty.

Now imagine a system where the principal can arrange, with relatively little effort and no fear of reprisals, for certain teachers to be safe from lay-offs and other teachers to be first in line. I'm sure most principals wouldn't use this unchecked power to put tough graders, independent voices, and strong union supporters in the expendable pile. There would, however, be abuses and the administrators who commit these abuses will have a tremendous advantage in the competitive landscape.

Worse yet, every decision that administrators make will be met with suspicion. Every time a teacher gets a larger than average class with more than the average number of kids with behavior problems, colleagues will wonder if the assignment had something to do with flunking students who blow off their term papers, or pushing for a tough stance in contract negotiation, or just voicing too many concerns in faculty meetings.

Businesses go to great lengths to avoid the atmosphere of distrust and labor/management tension I've just described. For all their talk of looking to business for ideas, advocates of the reform movement don't seem to give these issues much thought.

Next, the different kinds of lay-offs and their implications

Arguments that generalize poorly

If only Megan McArdle would make the same argument for medical care that she does for congestion pricing:

But that brings us to the heart of the populist argument against congestion pricing, and even express toll lanes, and I think ultimately supports Tim's argument that this is never going to be democratically popular: most people don't pay. And they tend to resent the people who do. It is not an accident that congestion pricing is a system most beloved of people who are a) relatively affluent and/or b) don't drive to work. This tells us empirically why congestion pricing is unlikely to ever get enough political support to be implemented in America. But maybe it also tells us, maybe, why it shouldn't be implemented. Who are we to tell people that they ought to prefer prices to queuing?

The is a reflection of how conservatives often seem to (oddly) switch sides when the question is one of transportation. Clearly, a single payer medical system is the most fair (see Canada). Canada's single payer system has also got issues with efficiency, being one of the few countries to have worse physician wait times than the United States.

But with health care we always see the reverse argument (efficiency > fairness), which strikes me as an odd mixture of priorities. Or am I missing something?

This should literally be a textbook example of how phrasing and context affect polling

Talking Points Memo discusses how two polls given in the same week can get starkly different results:

Last week, a Gallup poll showed that 60% of Americans would rather see a budget compromise than see members of Congress who represent their interests hold out for their ideal budget, if it means the government would shut down. That phrases the current debate in Washington fairly concisely.

Compare that to Rasmussen, which framed the question much differently:

5* Would you rather have Congress avoid a government shutdown by authorizing spending at the same levels as last year or would you rather have a partial government shutdown until Democrats and Republicans can agree on what spending to cut?

That frames the budget showdown as an either or: either the government continues spending at current levels, or it shuts down until cuts are made. In response to that, 58% of likely voters said they preferred a government shutdown.

Rasmussen is, of course, something of a special case. To understand just how special, take a look at Nate Silver's excellent analysis,"When ‘House Effects’ Become ‘Bias.’"

More big burdens, more small shoulders

From Jonathan Cohn:

Please indulge me while I share some local news: Rick Snyder, newly elected governor in my home state of Michigan, announced this week that he will call for massive cuts in state spending on education.* (*Note: My [Cohn's] wife is a professor at a public university that would lose some funding under Snyder’s plan. I doubt she'll feel much impact from these cuts. But, as you can guess from this item, I think my kids will.) Very roughly, it will result in a reduction of about $470 per student.

I know enough about public education, and public education bureaucracies, to believe that school districts could find ways to reduce spending without hurting the quality of education. And, yes, it would probably mean teachers and staff making more concessions on salaries or, more likely, benefits.

But could they find $470 per student that way? I don't think so. On the contrary, I expect that schools--including the ones that my sons attend--would end up with fewer teachers, fewer courses, and fewer extracurricular offerings if the legislature approves Snyder's plan. And my kids would be among the lucky ones. It would be much worse in places like Detroit, where an ongoing funding crisis is about to swell some classes to 60 students. (No, that’s not a misprint.)

Health Insurance

Discussion of individual health insurance (with or wihtout pre-existing medical conditions) often overlooks the point that a pay as you go system is inherently expensive here in the United States. Consider:

Why did we even need insurance? First, we wanted to know that, if we had a medical catastrophe, we would not exhaust our savings. Second, uninsured patients are billed more than the rates that insurers negotiate with doctors and hospitals, and we wanted to pay those lower rates. The difference is significant: my recent M.R.I. cost $1,300 at the “retail” rate, while the rate negotiated by the insurance company was $700.

Obviously standard market mechanisms are not going to be able to kick in when the only way to get affordable care is to be part of a pooled insurance plan. And, with rate differentials this high, no sane person will exit the health insurance market. So the whole idea of free market heakth care is a bit of a distraction: our system is designed for people who have insurance.

[Not to mention the impact of policies that can be rescinded for good faith errors; these factors make the market opaque and resistant to market forces]

The biggest burdens go on the smallest shoulders

In today's New York Times, Paul Krugman reminds us just how hypocritical all the talk we hear about "putting children first" really is:

And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.

But wait — how can graduation rates be so low when Texas had that education miracle back when former President Bush was governor? Well, a couple of years into his presidency the truth about that miracle came out: Texas school administrators achieved low reported dropout rates the old-fashioned way — they, ahem, got the numbers wrong.

It’s not a pretty picture; compassion aside, you have to wonder — and many business people in Texas do — how the state can prosper in the long run with a future work force blighted by childhood poverty, poor health and lack of education.

But things are about to get much worse.

A few months ago another Texas miracle went the way of that education miracle of the 1990s. For months, Gov. Rick Perry had boasted that his “tough conservative decisions” had kept the budget in surplus while allowing the state to weather the recession unscathed. But after Mr. Perry’s re-election, reality intruded — funny how that happens — and the state is now scrambling to close a huge budget gap. (By the way, given the current efforts to blame public-sector unions for state fiscal problems, it’s worth noting that the mess in Texas was achieved with an overwhelmingly nonunion work force.)

So how will that gap be closed? Given the already dire condition of Texas children, you might have expected the state’s leaders to focus the pain elsewhere. In particular, you might have expected high-income Texans, who pay much less in state and local taxes than the national average, to be asked to bear at least some of the burden.

But you’d be wrong. Tax increases have been ruled out of consideration; the gap will be closed solely through spending cuts. Medicaid, a program that is crucial to many of the state’s children, will take the biggest hit, with the Legislature proposing a funding cut of no less than 29 percent, including a reduction in the state’s already low payments to providers — raising fears that doctors will start refusing to see Medicaid patients. And education will also face steep cuts, with school administrators talking about as many as 100,000 layoffs.

Castles and Crusades

Mark has been doing a games section on the blog (it's cool and you should check out some of his posts). If we are lucky, he might do a post on Kruzno, eventually.

The Castle Keepers Guide has now been released for Castles and Crusades making the base game system complete. For fans of older style role playing games this is a major milestone, admittedly one that comes late in the day. But it's a good book and has a lot of the "look and feel" of Gary Gygax's classic writing. It's well worth a look.

Some Thoughts on Personal Finance

It was unfortunate that Mark decided not to write about personal finance as I think that there is a lot to say about this topic. In particular, I agree that it was odd that this article was treated as a revelation. Consider this comment:

I won’t bore you with the math, but this meal plan cuts out all the extras. No snacks, no OJ, no organic milk at $5.99 per gallon, no Parmesan cheese sprinkled on top of that pasta, no frozen yogurt at night in front of DWTS. The husband brown bags it to the office. I’ll admit I included my coffee, at $2.15 per week, because I consider it essential, along with milk for the kids at every meal.

I have actually been extremely poor and I begin to think that most financial journalists have never been in that state. I remember saving up to buy powdered skim milk (as the only possible option) and would never have dreamed of affording organic milk. Some of the cheap food options that are listed are good but I remember buying huge bags of rice (10 kg, if I remember correctly) so I could stretch a tiny food budget out over a month. I notice this level of extreme economy is absent from the discussion.


In a lot of ways this is a good thing. The United States is wealthy country and it is good that inexpensive food is an feature of our society. But one should not mistake this advice as being how one would actually deal with dire poverty.

A Miscellany of Topics That Will Not Appear in My Next Blog Post

I've recently gotten in the habit of using the "save and quit" option on my browser when I shut down my laptop. The driver of this odd behavior is the ever-growing pile of posts I'm meaning to write.

I've decided to stop telling myself that I'll eventually get around to them (if you're going to tell yourself lies, you should really save them for the big stuff). Instead, I'm going to use this post as a data dump with links and brief descriptions of the articles. I'll probably get around to some of them eventually, but if something sounds interesting, don't wait for me. If any of these seem to merit more attention, let me know and I'll put it on the top of the pile:

Education researchers need to worry more about the Hawthorne effect;

And the Halo effect;

Why are financial advice columnists so clueless about living on a budget?;

On a related note, how to get concert tickets for just $350 isn't really the kind of financial advice we really need at the moment;

The Collegiate Learning Assessment sounds promising but I'm not sure sure it supports the coverage it's gotten, let alone a book;

Not to be cynical, but has any educational study not shown promising results? (see Hawthorne effect);

On a related topic, when we hear about a new study discrediting an old technique, how can we be sure they didn't just use the technique badly? (not sayin', just wonderin');

Whenever an economist talks about how regular people just aren't as clear-headed and rational as economists are, it makes baby Jesus cry;

Michael Hiltzik is really sharp;

Felix Salmon thinks so too;

Paul Krugman also has something to say on the topic;

"[H]e suddenly declared that we needed to cut taxes to prevent too rapid a reduction in US debt." (comment is superfluous);

I really need to write something about this;

And this;

I wonder what Daniel Little would say about social norming in the classroom?

This round just might go to Eminem

Edward L. Glaeser has been tough on Detroit and the auto industry. Here's how he opened a column last week:

During the Super Bowl, Chrysler and Eminem gave us a chest-thumping, soul-lifting vision of Detroit as a city of character, competence and style. But the Census tells us that per-capita incomes in Detroit are barely half the national average and that one-third of the city lives in poverty.

Michigan was the only state that lost people from 2000 to 2010, and the state’s unemployment rate remains near 12 percent. Is it possible that Detroit will turn the corner despite decades of decline?

It's safe to assume that the answer Glaeser had in mind for his rhetorical question didn't rely too much on the Big Three. Back in June, 2009, here's what he had to say about the bailouts:

Since the collapse of Lehman Brothers, the public sector has spent billions saving the banks. While these decisions are certainly debatable, they are understandable. The US financial industry misbehaved badly,... but it is still a sector with a future. ... After all, every other sector in the economy depends on banks for their financing.

But what about cars? ... Does anyone, other than GM's management, believe that this company can come back? The current treatment, cash infusion and a reduction in corporate liabilities, provides a solution for a company that is broke, not for one that is broken.

Given that analysis, it might be interesting to get his take on this item from the New York Times:

General Motors, which nearly collapsed from the weight of its debts two years ago before reorganizing in a government-sponsored bankruptcy, said Thursday that it earned $4.7 billion in 2010, the most in more than a decade.

It was the first profitable year since 2004 for G.M., which became publicly traded in November, ending a streak of losses totaling about $90 billion.

In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history. ...

Globally, G.M.’s sales rose 12.2 percent in 2010, to 8.39 million, coming within about 30,000 vehicles of retaking the title of world’s largest automaker from Toyota. For the first time, it sold more cars and trucks in China, where its sales rose 28.8 percent from 2009, than in the United States, where sales were up 6.3 percent.

Or to see what he had to say about Jonathan Cohn's reaction to the news:

Seriously, though, this is another important milestone for GM. Profits for the final quarter were actually lower than initial expectations. But the company attributed that, in part, to heavy investment in the development of new products, which is a sign of company health. “Their recovery has been fueled by significant cost-cutting, arrival of new products that consumers were seeking along with better management of incentives and supply,” Jesse Toprak, vice president of industry trends and insight at TrueCar.com, told the Times. “The sky is the limit for G.M. after becoming profitable at this low of a sales pace.”

Of course, the usual caveats apply: The two companies could still stumble and Chrysler, in particular, still needs to prove they can cars as good as their television commercials. And it's not as if workers in the auto industry didn't take a huge hit anyway: Many did lose their jobs and new employees are making a lot less money than old ones do.

Still, it looks increasingly like the rescue of the auto industry was an overall success, saving hundreds of thousands (if not millions) of jobs and bolstering the country's manufacturing base for years (if not decades) to come. Maybe it's time to start giving President Obama some credit for it--and recognizing that, when properly managed, the federal government can do a lot of good.

Weekend Gaming -- Piet Hein's TacTix

A Grook by Piet Hein:

ARS BREVIS

There is
one art,
no more,
no less:
to do
all things
with art-
lessness.


Piet Hein was, among many other things, an inventor of remarkably clever games. After Hex,* his most famous is probably his two-dimensional variant on nim, TacTix.



As with most of Hein's recreations (even those dealing with sophisticated mathematical concepts), the rules of TacTix are wonderfully simple. The players take turns picking up pieces from the board (shown above) until the losing player is forced to pick up the last piece. The players can pick up as many pieces at a time as they choose with the only constraint being that the pieces have to be in the same row or column and have to be contiguous.

Here's what what a game might look like after a couple of moves (taken from this sample game):

TacTix doesn't quite meet Othello's "a minute to learn a lifetime to master" standard, it yields fairly easily to analysis (or to practice if you're paying attention), but while this keeps it out of competition with chess and Go and less well-known games like agon, Hein's invention still has a lot to offer:

The rules are almost as simple as TicTacToe, making it an ideal game for very young players;

Like TicTacToe, TacTix can easily be played as a pencil-and-paper game. Just mark off a grid then cross out squares instead of removing pieces;

Unlike more complicated games, the underlying concepts of TacTix are easy to grasp and to teach (Martin Gardner had a good summary in one of his Scientific American columns though I'm not sure where it's collected);

TacTix also makes an excellent programming exercise;

Finally, there's no rule that says you have to follow the rules. Try adding a few of your own. Play around with the board configuration or try flipping a coin to determine whether you can pick up an odd or even number of pieces. Get creative. It's what Hein would have wanted.






* Also independently invented by John Nash a few years later.

Interesting paper on peer effects

I'm not sure this is the ideal methodology to approach this problem (I'd like to see this combined with something that captures the actual interactions in the classroom), but, based on what I've seen, this is a definite improvement.

From VoxEU (via Thoma)

Our recent research uncovers peer effects in education as distinct from the contextual and other correlated influences. Our econometric strategy uses the topological structure of social networks as well as network fixed effects to identify each of these effects separately.

Our analysis is made possible by the use of a unique database on friendship networks from the National Longitudinal Survey of Adolescent Health (AddHealth). The AddHealth database has been designed to study the impact of the social environment (i.e. friends, family, neighbourhood and school) on adolescents' behaviour in the US by collecting data on students in grades 7-12 from a nationally representative sample of roughly 130 private and public schools in years 1994-95 (wave I). A subset of adolescents selected from the rosters of the sampled schools, was then interviewed again in 1995-96 (wave II), in 2001-2 (wave III), and again in 2007-2008 (wave IV). For our purposes, the most interesting aspect of the AddHealth data is the friendship information, which is based upon actual friend nominations. It is collected at wave I, i.e. when individuals were at school. Indeed, pupils were asked to identify their best friends from a school roster (up to five males and five females). As a result, we can reconstruct the whole geometric structure of the friendship networks.

In Calvó-Armengol et al. (2008), we exploit such information to test a peer-effect model which relates analytically equilibrium behaviour to network location. This analysis shows that the structure of friendships ties is an important, and so far unnoticed, determinant of a pupil performance at school. In Patacchini et al. (2011), we follow this line of research by exploiting the other AddHealth waves in order to investigate whether such effect is carried over time. Indeed, the longitudinal structure of the survey provides information on both respondents and friends during the adulthood. In particular, the questionnaire of wave IV contains detailed information on the highest education qualification achieved.

We analyse the impact of the friends' educational attainment on an individual's educational attainment where they are identified as friends during school and in to adulthood. We find that peer effects in education are not only strong but also persistent over time. We find that the most relevant peers are the friends people make in grade 10-12, from when they are around 15 years old. This suggests that individuals are more likely to work towards and apply to college if this choice is popular among their peers, especially in the last years at school. This could represent the effect of contagion and collective socialisation and mean that any education policy targeting specific individuals will have multiplier effects.

So many problems for such a little state

As if this weren't enough.

From TPM:

According to The Providence Journal, "[s]chool and city leaders said they were forced to issue the mass dismissal notices because of a state law that says teachers must be notified about possible layoffs or terminations by March 1." In a statement, Mayor Angel Taveras said that because the deadline for informing teachers about employment changes came before the budget for next year could be determined, the move was necessary.

"Providence faces significant challenges in getting its financial house in order," Taveras said in the statement. "Spending reductions are inevitable. It is also inevitable that some portion of cuts will come from the school budget. This is why we faced the difficult decision of sending letters to all teachers: we do not yet know what actions will be required and believe it was only fair to let all teachers know about the severity of the situation."

Taveras told the Journal that there would be fewer schools open, and fewer teachers teaching, in Providence next year -- he just couldn't yet say how many.

I hope to have a post up later today on the economics and logistics of hiring and firing of teachers. One of the relevant sub-topics here is the highly compressed hiring season. It is difficult and terribly disruptive (particularly for the students) to make staffing changes during the school year. Unlike most fields where employer and/or employee has the option of deciding that a position isn't a good fit, a teaching assignment represents a decision that all parties will have to live with for the next year.

The result? Take a year's worth of staffing for a labor-intensive industry, up the stakes, then squeeze the whole thing into eight or ten weeks. That's the reality of managing the education workforce. Any viable reform proposal based on changing the way we hire and fire teachers has got to either work under those constraints or fix the system.