teachers: not what they used to be

[Max Sawicky]

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

Insofar as the public sector is less productive,
efficiency dictates a shift of resources, but this
assumes the pre-existing level of resources was
efficient to begin with and abstracts from how
income growth might affect preferences for this
or that.

Baumol's story could be used to defend increased
public sector costs.  It boils down to, look, if
you want your kid to have the same math teacher
you had, you have to recognize the old boy could
make a lot more now then before.  The out-migration
of skilled women from this sector previously mentioned
goes to the same point.

I think laying Pritchett and Summers on Baumol is
a bit much.  After all, Baumol has read Capital
three times.

mbs