How an economist would decide the what, when and how of reception year

Clare Sealy has written an amazing blog post explaining why rising 5s need to learn through a mixture of explicit teaching, whole class collective experiences, and play-based encounters. The early years isn’t an area of research for me, but it is a field I spend a lot of time thinking and reading about simply because my own children and those of my friends are currently so young.

Clare’s blog describes the controversies around the question of how we should educate in the reception year. However, I think questions of what and when we should teach young children are equally contentious. Reception year has moved from something that lasted only a few months for many (e.g. me) a generation ago to a de facto compulsory year of schooling and I’d like us* to conduct more empirical research on when it makes sense to teach complex skills such as reading and writing to children.

As an economist, whilst I am supporting my own children in learning new skills (potty training, arithmetic, reading, getting dressed etc…), I wonder why we don’t talk more about the opportunity costs involved in the decisions we make in reception year. What other opportunities must we give up when we decide to teach 4 year olds to read, or to learn some French words, or their number bonds to 20, or to learn a repertoire of songs by heart, or how to identify trees by their leaves?

Economists naturally think in terms of costs and benefits – here our costs are time costs. For example, we choose to potty train children about a year later than they were a generation ago. Why? By delaying we can invest far fewer hours in the process – hours that we then get to spend doing other things. We can afford this delay because disposable nappies are now cheap enough to use for extended periods of time. Equally, we now invest hundreds of hours ensuring children can read the word ‘mat’ when they complete the reception year. That has great benefits to the child, but it has also cost them time which they were then not able to spend doing other things that are promoted in other cultures, such as numeracy or memorising a repertoire of songs, dances and poems.

If an economist was asked how reception year should be organised, they would want some data on these time-investment trade-offs. For example, in the case of teaching a child to read through an explicit phonics programme, they would want to know exactly how the age at which a child starts learning affects the number of teaching hours that need to be invested. The chart below illustrates a trivial example of this. Suppose my daughter started a phonics programme at age 5 and it took her 300 hours of teaching time to complete. How many hours would it have taken if we’d started at age 3? 750 hours? 1000 hours? Would it be worth it? What about if we’d delayed until she was 7? 150 or 200 hours? Would these time gains make it worth delaying? Suppose we could draw a similar chart for a child who comes from a less book-rich home? Would the chart be steeper (i.e. the gap in time investment needed compared to my daughter closed somewhat over time) or flatter? I think we can be fairly sure the curve would be steeper for boys than girls, but by how much? These charts wouldn’t tell you when you should teach phonics, but they would make explicit one bit of evidence we need to decide at what age we should start teaching children to read.


Now, suppose we have two goals – learning to read well enough to pass the phonics test and achieving fluency in number bonds to and within 20. We can choose to start a phonics programme at the age of 4, but that doesn’t leave enough time to also achieve fluency in number bonds as well. Which should we prioritise in the younger children and which should we concentrate on later? An economist would say it depends on the shape of the curves. I suspect (based on my sample size of 2 children) that arithmetic has a flatter curve than reading so that the time investment for learning number bonds at age 4 is not vastly higher than it is at age 5.

These curves are fictional – I don’t know what they look like for real children. But I’d feel far more comfortable explaining to a foreigner why we teach our children to read soon after they are four if I knew the time trade-offs involved in this decision.

Economics is the coldest of the social sciences, but this analysis places every hour of children’s precious lives at its heart. It reminds us that we should take care in balancing the gains from learning new skills against the costly time investments of teaching new stuff to young children. And it reminds us that, whilst it might be more efficient to teach handwriting to four year olds through more explicit and formal methods, this fact alone doesn’t mean we should do it. We should also weigh up the relative time investments involved in choosing to bring forward the teaching of a new skill to the reception year, rather than deferring it to year 1 or 2. Indeed, I suspect much of the raging argument about how we should organise the reception year gets confused by private disagreements about the what and when.

(This is a slightly trivial New Year blog post that summarises everything economics has to say about the reception year. Economists shouldn’t decide what the reception year looks like. Don’t let them.)


* not me


Still reading? OK, here is the indulgent bit where I tell you about my personal views on the reception year:

  • I only did a few weeks in reception class and I did OK in life – I can’t help feeling that if it were so critical to start things young then other countries would be doing it too
  • Child-initiated play was great for my eldest in playgroup, where the adult-child ratios were high; it was pretty sub-optimal in reception year where there were necessarily frequent child-on-child interactions that could not be mediated by an adult, producing endless social/emotional issues. The thought of having to put my youngest through reception year doesn’t fill me with joy for this reason
  • We aren’t ever going to get larger physical spaces and more adults in reception classes. With that in mind, my dream reception year for my children would be 2-3 hours a day at school for collective activities (singing, learning poems, games) and structured work at tables, then back to pre-school for lunch and afternoon play.

Economics of Education

Economists analyse the production of education in this world where resources such as the capital invested in buildings or technology and the labour of the teacher workforce are necessarily scarce. This scarcity of resources means that policymakers must decide:

  1. How much to spend on each stage of education (i.e. what to produce);
  2. How to provide educational services in a way that maximises its benefits to society (i.e. how to produce education); and
  3. Who should have access to each stage of education (i.e. for whom is education provided).

Economic theory is able to help policy makers by providing both facts about the education system and values to inform decision-making. The part of economics that is concerned with establishing facts about the world is called positive economics. It asks questions such as ‘can we improve the quality of teachers by increasing pay’ or ‘will smaller class sizes raise pupil attainment’? Normative economics asks questions that require value judgments such as ‘is it fair to charge higher education students tuition fees’?

A social welfare framework underpins the dominant approach in the economics of education. According to this framework, society should strive to arrange educational services to be produced and distributed in manner that is both efficient and equitable. Efficiency means that educational outputs are maximised, given a set of constrained resources. Equity means that services are distributed according to some principle of social justice or fairness.

Individuals and governments often face hard choices because of the scarce resources they possess. For example, expanding higher education and increasing provision of early years care might both appear to be policies that have the potential to improve the well-being of society overall, but which should a government prioritise? Economists describe the costs of taking a particular action as opportunity costs, because the greatest cost of expanding higher education might be the lost benefits of not undertaking the next best alternative policy, such as increased provision of early years care.

Short history of the economics of education

Economists are normally associated with ensuring that profit-making companies and the overall economy functions well, but they have slowly expanded their interests to new spheres of society. The origin of the economics of education as a significant field within economics dates back to the theoretical and empirical developments made by American economists such as Gary Becker and Jacob Mincer in the 1960s. Their work introduced the idea of education as human capital and they attempted to calculate the economic returns to acquiring education.

Over the past decade there has been an enormous growth of interest by economists in education policy, both in the UK and across the world. This has been accompanied by a growing political interest in market-based reforms across the public sector. These types of reforms include devolvement of financial planning to front-line institutions such as hospitals and schools and giving consumers of public services choice about which provider to use. Economists from other fields such as labour economics have been attracted by the growing availability of large-scale datasets that facilitate complex statistical analysis to analyse the impact of particular policy initiatives. Examples of these data include the National Pupil Database in England, which has collected annual information on the background characteristics and Key Stage attainment data of all pupils in state-maintained schools since 2002, and the PISA, an international survey of the skills of 15 year olds across many industrialised countries.

What is the economic paradigm?

Economic theory makes certain assumptions about human behaviour in order to make predictions about the effects of policy changes. The starting point of economic analysis is that individuals and institutions are rational agents (often given the name homo-economicus), operating with self-interested intent as they make decisions about providing or participating in education. Individuals are assumed to set themselves a goal of maximising their own well-being (or utility), given fixed preferences or tastes for education and a well-defined money constraint. Many economic theories assume that human brains possess perfect computational powers to process all the information needed to make optimal choices at all times!

These economic models of individuals and institutions present a simplified version of reality and for this reason they have been criticised by many sociologists and psychologists who claim they bear little resemblance to the real world. However, economists would argue that these simplifying assumptions are necessary to make precise predictions about the likely impact of policies in this complex world we live in. To put it another way, economists do not really believe that humans are so selfish and simple in their motivations; they just believe that this simplification is a useful analytical tool to help us understand the world better.

Books where you can learn more…

Checchi, Daniele (2008) The Economics of Education: Human Capital, Family Background and Inequality,  Cambridge: Cambridge University Press. [This book provides a comprehensive overview of most of the work currently being carried out in the field]

Le Grand, J., Propper, C. and Smith, S. (2008) The Economics of Social Problems, London: Palgrave Macmillan. [An introduction to economic theory applied to a wide variety of social problems, including education]

Machin, S. and Vignoles, A. (2005) What’s the Good of Education? Princeton: Princeton University Press. [A non-technical UK perspective on the economics of education]

Barr, N. (2004) Economics of the Welfare State, Oxford: Oxford University Press. [If you have studied a little economics before, this book gives an excellent overview of relevant economic theory]

If you can get access to academic journal articles, you might find this an interesting starting point:  Machin, S. (2008) The new economics of education: methods, evidence and policy, Journal of Population Economics, 21 pp 1-19.

Where to find relevant journal articles…

Articles by economists about education policy are published in specialist journals such as:

They also publish in other economic journals, such as:

Other articles can be found across geography, statistics and education journals, such as:

Where to find discussion papers…

IDEAS at RePEc.  Almost all economics of education journal articles are first made available as working papers here.

Institute for the Study of Labor.  The German think-tank IZA publishes many papers in the field of economics of education.

Centre for Market and Public Organisation, University of Bristol.  This is one of the the largest centres for research in economics of education in the UK.

Centre for Economics of Education.  CEE is a multi-institutional research centre based at the Centre for Economic Performance (LSE), IFS and IOE.

Institute for Fiscal Studies.  IFS publishes reports about education spending in the UK.

National Bureau of Economic Research.  NBER publishes many US working papers in the field of economics of education.  However, you need a subscription to download the actual papers.

National Center for the Study of Privatization in Education.  NCSPE is based at Teachers College, University of Colombia.