Economic Literacy of Teenagers – by Steven Kyle

Steven Kyle really took me seriously when I offered to post stuff by Angry Bear readers. M. Jed also had a write-up, as did Alex Gorski. Where are the rest of you?

Here’s Steven Kyle’s latest. I suspect some parts of this will look very familiar to those of you have had the opportunity to teach econ in the past few years:

Economic “Literacy” of Teenagers

I teach a large course in principles of economics and often do informal surveys of student opinion to see what sort of notions they arrive with. I guess I have two thoughts – one of them is to find out what the Future of Our Civilization will be like since these kids will be running the show when I am retired and the other is to find out what economic ideas are written on the tabula rasa of the 18 year old mind. Most of them have no previous economics training and are largely telling me what they learned as conventional wisdom at dinner table conversations. I think it is revealing of what their personal experience has been – Even the most aware don’t remember much before around 2000. By far the majority of the students are not future Econ majors. They take the course to fulfill core requirements for their majors but most aren’t going to go much further than Econ 102.

– Here is a not necessarily exhaustive list of some observations:

1. They don’t see the problem with deficits or the national debt. It hasn’t been a problem yet, it is boring and probably most important, they themselves live on credit cards and have happy lives so why shouldn’t the country?

2. Inflation is a completely alien thought to them. We economists are totally convinced of the importance of compound growth rates and what the price index has done over the past few decades but today’s college students (unless they are from Argentina or some other place where inflation is an issue) simply have no experience of it. Prices haven’t gone up more than 2 or 3% a year in their lifetimes so they completely glaze over at being told how important it is to avoid it.

3. They are convinced that Social Security is doomed and there is no way it will be there for them. Many cite the much quoted factoid that the number of workers per retiree is declining. Given these opinions they are mostly in favor of revamping the program since they see it as a tax with no future benefit.

4. International trade is viewed with suspicion. I can make them look at the labels on their clothes all day to demonstrate how important imports are to them and they will still worry about shipping jobs overseas and/or environmental issues. Of course, since I teach them that international trade always has both winners and losers and truth lies in the data maybe I am at fault here. Next time I do the course I think I will ask them if they would be willing to pay 5% more for their clothes if that meant more jobs here in the US. I bet they would do it even if the sum total of the losses far outweighed the gains.

5. There are no Luddites that I can find. Technological change is taken for granted. In fact, it is embraced fervently by all. Today’s college students seem more interested in finding a job making new technologies than worrying about losing jobs because of it.

6. Environmental awareness seems universal. All are against pollution but there is no consensus on what to do about it and no real awareness of, or support for such economistic solutions as tradable permits.

So there you have it. I suspect this is a fairly reasonable barometer of what opinion is among the population a whole or at least among those who are more or less aware but aren’t economists. Comments?