>William Baumol explained the rise in the relative
>price of public services with this reasoning decades
>ago. It is logical for the public sector to switch
>from more- to less-skilled workers in this context,
>abstracting from other things. There is no necessarily
>negative political connotation.
Yeah, Baumol's disease. Teaching isn't subject to Moore's law and all that. But there's plenty of political connotation to it. If we follow market logic, resources should follow productivity for the maximum payoff, and we shouldn't care if teachers are poorly paid, because they're getting what they deserve, marginal product-wise. The logic of it is impeccable, in the Larry Summers/Lant Pritchett sense, no?
Doug