Investment in younger people is fundamental to productivity growth

Prof Lindsey Macmillan has been collaborating with the UCL Policy Lab as we think about building coalitions to tackle inequality. We spoke to Prof Macmillan about the importance of schools in levelling up, the impact of the pandemic on learning and the central role of education in increasing the UK's growth and productivity.

How did your interest in education and inequality begin?  

I’m from a working-class family. I spent my first five years living on a council estate in East Kilbride, a ‘new town’ just outside Glasgow, before my Dad moved down to England to get work in the mid-80s. I was lucky my family always insisted on the importance of education. University was never an option for either of my parents. There wasn’t any money, they needed to go to work, but they always insisted that me and my sisters go. I was fortunate in my final year of undergrad to meet some very supportive teachers who encouraged me to apply for a research assistant post.

In my first project, we looked at the role of education, alongside early skills, in how incomes are transferred across generations and the story of social mobility in the UK. Previous work showed that intergenerational mobility in the UK had worsened over time. In our work, we showed that the main reason for that was that educational inequalities have worsened over time. In other words, kids from more affluent families were doing even better in school than they had before, versus kids from poorer families.

And when you know that, the unfairness of it all is striking. Why should we be determined by our circumstances at birth? Why should my education and adult earnings be higher if I’m born to wealthy parents in London and lower if I’m born to poorer parents in the North-East, for example?

The British political parties are currently focused on the UK's low growth and productivity. We hear a lot about the need for investment in infrastructure, reforms to taxes and support for innovation. What role does education play in improving the UK’s growth prospects both in the short and long term?  

It is central. Investment in younger people is fundamental to productivity growth. Why is no one looking at children as the future drivers of productivity? We need to take this seriously. One of the biggest arguments for the cost of school closures during the pandemic comes in terms of lost future productivity. Some of the estimates are in the trillions of pounds. We are missing a massive opportunity to change future productivity growth and the wealth of our nation.

Recently you co-wrote a blog for the UCL Policy Lab looking at education as a critical component of levelling up. Do you think we’ve neglected education when it comes to levelling up?

Absolutely. The work mentioned in that piece was for the Social Mobility Commission, called The Long Shadow of Deprivation. In that report, we found that educational inequality is an important part of the story of how advantages and disadvantages are passed across generations everywhere in the country. On average, around 80% of the pay gap between those from the most and least deprived families came through differences in educational outcomes. For example, it won’t surprise you that London, which is doing so well in terms of educational outcomes, particularly for disadvantaged pupils, narrowing the gap between the two, is one of the most socially mobile areas in the country. And yet education is strangely missing from the levelling up discussion. There have been no serious attempts to tackle some of the obvious inequalities that exist in the state system, and the IFS have shown that the gap in funding per pupil between state and private pupils has risen steadily since 2010.

You spoke recently about the worrying impact of the pandemic on educational outcomes and disparities. Can you tell us more about what the data is showing?  

We are starting from a very bad position. The latest KS2 results showed increasing inequality in attainment for the first time since 2011. The experience during COVID has effectively wiped out all the progress made in reducing the attainment gap over the last decade. We saw the same picture at GCSE and at A level, particularly in the regional analysis, with London pulling away from all other regions and inequalities widening. These results are really bad news for educational inequality, but also in terms of future skills and productivity for everyone as all pupils have fallen behind. Skills beget skills. Pupils are missing fundamental building blocks for their next stages of learning. This lack of a solid base is concerning, and frankly, there hasn’t been the investment in education that is required for catch up. We have seen only around a third of what the education catch-up tsar, Sir Kevan Collins, called for, and less than half of what the Education Policy Institute believed would be required to mitigate learning losses.

Combining that worrying baseline with the cost-of-living crisis means that things are going to get worse. We know that hard times hit those from the most disadvantaged backgrounds hardest. Not only are they first out of work as labour markets contract, but they also spend a greater proportion of their incomes on necessities which are impacted by inflation – food and energy, for example.

Schools and colleges will also be affected by the cost-of-living crisis – I already mentioned the funding gap between the state and private sector widening. This funding gap has been particularly acute in FE colleges which is a more common route for those from disadvantaged backgrounds. Couple this with the limited funding expansion to cover post-covid catch-up, soaring prices, and new policies such as increasing new teachers’ starting salaries, and school budgets will be really struggling to cope. Worryingly the things that might be cut first are things like school trips, which are sometimes things that kids from deprived backgrounds don’t get to experience outside of school.

Parents know that schooling is vital but they also know that the influences on their children don’t end at the school gate. Do you think the government needs to take a more holistic approach to education? Recognising that we won’t improve outcomes without action on other areas such as housing, health and wellbeing?

All these factors; the family, the community, the school system, have a role to play. Obviously politicians focus on the policy levers they can work with, but all these factors work with each other together. We need to think about the way we treat children in schools now as they will go on to be the parents of tomorrow, and run our communities, and that is an important part of the picture across life when we are thinking about how to invest in people. Investment in children doesn’t tend to be a big part of the discussion at the moment, particularly around levelling up. The levelling up discussion has mostly been around regenerating areas without considering the development of children in these areas. 

We’ve once again heard a push to bring back grammar schools or expand those on those we do have. What are your thoughts on grammar schools, and what is your response to the political pressure to discuss this idea?

 In our field, we often refer to the grammar school issue as the zombie policybecause it keeps resurfacing. It’s bizarre that an area where the evidence really couldn’t be more conclusive keeps  coming back round, presumably driven by individual anecdotes. The robust large-scale representative studies on this are very clear: grammar schools are bad for social mobility. First, they increase inequality, creating worse outcomes for all the other schools around them, all the pupils in all the schools not classified as grammar schools. And, second, they select on the basis of socio-economic status, rather than ability. Even if you compare pupils with the same levels of academic attainment, pupils from more affluent backgrounds are far more likely to be admitted to grammar schools compared with less advantaged peers. When you put this together, they do the opposite of what those arguing for them say. They decrease social mobility; they perpetuate inequalities across generations.

Finally, in essence, what should the government and other policy makers be doing to tackle educational inequalities and help drive long term growth?

The solutions are clear. We need to support disadvantaged families, both in terms of redistribution so they have resources to invest in their children, and in other ways, through family hubs and early interventions helping them to support their children. We need to increase investment in our education system too. As I mentioned earlier, we've only invested 1/3 of what was required in post-covid catchup, and that’s before we consider the slashing of funds over the last decade. We cannot go on like this. Most of all, we need to recognise a simple truth: what we invest in young people today will lay the foundations for their lifelong wellbeing and our shared prosperity.