Education Assessment with Paul Grimes Transcript

Education Assessment with Paul Grimes Transcript

Charles Davidson: Welcome to the Federal Reserve's podcast concerning our assessment of the bank's economic and financial education program. We're talking today with Paul Grimes, Associate Dean of the College of Business at Mississippi State University, who conducted the assessment, along with Bill Bosshardt of Florida Atlantic University.

Welcome today Paul, and thanks a lot for being with us.

Photo of Paul GrimesPaul Grimes: Happy to be here.

Davidson: First off, Paul, economic education, generally, why is it important? Is this, in general, an undertaking that's worth doing?

Grimes: Economic education and financial literacy are extremely important to us as a country in a number of ways. Most importantly, understanding how the economy works, I think, is very essential for households in terms of making decisions. Decisions about education, decisions about jobs, decisions about how to spend their income, how to save their income, how to prepare for retirement, and the list goes on and on. But in addition to those, sort of, household financial, sort of, undertakings, it's also important to be a well-rounded citizen.

Davidson: Now, I know this may be a bit of a tricky question, but in general, as a society how educated are we about economics?

Grimes: Surprisingly, we are not as educated as we seem to think we are. In fact, we are conducting a study that I was presenting earlier today at the Southern Economic Association meetings, and we had done a national sample of households, and we were asking them the question - the question you just raised, "What is your level of understanding about the economy and how the economy functions?" And 79% of our respondents indicated that they had a fair or good understanding of the economy, and 12% said they had an excellent understanding of the economy.

But in that very same survey, when you actually give them an economics quiz, which we did (we gave them seven questions about very basic economic concepts) the average score on the questions was 50%. So, that's below a D in most classrooms in this country.

Davidson: Well, turning now, Paul, more specifically to the assessment project for the Atlanta Fed, and I should point out that this is also an assessment undertaken in conjunction with the Federal Reserve Bank of St. Louis. First off, in general, what were the significant findings?

Grimes: We looked at a large portfolio of these programs, and then we wanted to find out, well, are these programs being effective? Are they delivering economic education to K12 teachers in particular, which is the primary target audience for most of the programs.

It is a general rule, yes they are.Â,â  The programs are effective in delivering educational content that improves teacher understanding.Â,â  And of course, if the teachers donâ??t understand the material, they cannot effectively deliver that to their students.Â,â  And so the first step is obviously, can we improve teacher understanding? And when we went out there to benchmark that, to begin with, many teachers are very much like the general public, that they donâ??t have a really good, strong economic understanding or financial literacy themselves.Â,â  And so a lot of these programs are getting teachers up to the point where they are comfortable with that material to teach in the classroom.Â,â  The evaluation, also, went beyond just, well, how much did the teachers learn by going through the programs? We also wanted to find out, are they using what they learned in the classroom?Â,â  And so we were able to quantify and verify that, yes, not only are our teachers learning the material as demonstrated by test scores, but theyâ??re reporting back to us that significant numbers of students are being reached with the new learning, and with the materials that the Federal Reserve provides.

Davidson: So all in all, it sounds like it was pretty encouraging?

Grimes: Yes, basically, it was very encouraging. Most of the programs had positive effects that we were able to identify and quantify. Each of the programs, though, we were able to come up with some suggestions for modification and enhancement.

Davidson: Well, as I understand it, one of the specific findings that you all came up with involved having the Fed focus on what the Fed does best. Can you explain that?

Grimes: Well, the Fed, in terms of its educational outreach programs, are primarily interested in what I would classify as three general areas that they definitely do best. The first is Federal Reserve education. Teaching the public about the Federal Reserve System as an institution, and understanding the monetary system, and, in particular, how the Fed's actions, through its monetary policy, affect that monetary system and ultimately effect the business community and households across the country. So Federal Reserve education: number one.

But to understand what the Fed does, to understand monetary policy and its impact on the economy, you have to understand a little bit about basic economics. And so economic education is the second thing that the Federal Reserve does very well.

So number one would be Federal Reserve education, number two would be economic education, and then number three, very importantly, particularly in today's economic environment, is financial education. Personal financial literacy is a really hot topic right now, and it's a hot topic because of what we have gone through over the last two to three years. The high unemployment rates, the foreclosures, all of this stuff has led a lot of folks to say, "Well, wait a second, a lot of these negative outcomes were based on bad decision making." And so the role for the Fed in this case is â?? well, if we can promote personal financial literacy, personal financial responsibility through the education system, kids will be leaving school with a better understanding of how to manage their own affairs.

Davidson: Paul, in a sense, given what we have been through economically as a country, is this an opportune moment for economic education?

Grimes: Yes, absolutely. In fact, Ben Bernanke has said that; he has been on record saying that we have an opportunity here, that the financial crisis, and the ensuing recession, really opens the doors, and people are interested in economics right now for the first time in a long time. They're interested in encouraging children to become more financially literate, and so I hope that we seize the moment and we take advantage of this opportunity.

Davidson: Well, I know this is a little bit more difficult to really measure, but we talked a bit about the fact that we are reaching teachers, and the program seems to be effective there. How do we tell if it's really helping the students they teach?

Grimes: That's a great question, and it's a question a lot of people are asking. It's very difficult to get direct observation on student learning after a teacher workshop. Optimally, we would want to go visit the teachers after they had attended a Fed program, visit their classrooms, and test their students, and to find out: Are students learning this material that the teacher is bringing back from the workshop experience? There are a variety of hurdles that stand in the way of doing that in an easy and straightforward manner; most importantly are the new federal regulations regarding personal privacy. So if we're testing children in a K-12 environment, most of them are going to be under the age of 18 and they're going to be minors, and therefore you'd have to have parental permission to actually test and survey those students.

And on top of that, not only is there that bureaucratic hurdle, but with No Child Left Behind our teachers and our students are being tested tremendously more often than they used to be, and so there is a lot of reluctance on the part of school administrators and teachers, in particular, about taking more time away from their lessons and spending more time on testing. So there are all these kinds of issues.

Now what we can do is, over the long run, is we can work closely with school districts and with state departments of education to get economic and financial questions embedded in some of those tests that they are taking for No Child Left Behind and for various other assessment purposes. And, I know here in the state of Georgia, high school students have to complete a high school course in economics before they graduate, and not only that, but the Georgia Department of Education requires them to take a test on economics. And so, here in Georgia, you've got a great measure of how much kids are learning in their economics classes, and this can be base-lined and tracked over time. Unfortunately, we don't have that ability in most of the states, in either the Atlanta district or the St. Louis district, so we're unable really to pull anything like that.

So, given these difficulties, what did we do during our evaluation of the Fed's programs? Well, we were really limited to looking at teacher reports, and we would ask them, "Do you believe that this experience improved your teaching?" And so, when we look at those numbers we feel pretty confident that when they turned out to be positive that there really is some student learning going on there. Even though we don't have direct observation of that, we do have indirect measures that do indicate positive successes.

Davidson: Well, Paul, thanks very much for your time today, enjoyed chatting with you.

Grimes: Well, thank you; real pleasure to be here.

Davidson: We've been speaking again with Paul Grimes, Associate Dean of the College of Business at Mississippi State University, and also co-author of an extensive assessment of the Atlanta Fed and the St. Louis Fed's economic education programs.

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