NAEP Economics Results Reveal Proficiency Woes

By Erik W. Robelen — April 24, 2013 4 min read
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More than half of American 12th graders lack proficiency in economics, according to new results from “the nation’s report card,” with no overall change in performance when compared with results from 2006, when the assessment was last administered.

In all, 43 percent of high school seniors scored “proficient” or above on the National Assessment of Educational Progress in economics, which covers such topics as personal finance, business, government policy, and international trade. For African-American students, the figure was just 17 percent and for Hispanics 26 percent.

“It is astonishing that high school seniors do not know more about how economics affects their wallets, their country, and their world at a pivotal time in their lives, whether they choose to enter the workforce or pursue higher education,” said David P. Driscoll, the chairman of the governing board for NAEP, in a press release.

Although the average score of 12th graders did not change, the data reveal some improvements from 2006, when the economics exam was launched. For instance, the percentage of students scoring below the “basic” level decreased from 21 percent in 2006 to 18 percent six years later. In addition, the percentage of Hispanic students scoring at or above basic grew from 64 percent to 71 percent over that time period. (But the proficiency rate for Hispanics did not change by a statistically significant margin.)

In a conference call with reporters, the commissioner of the National Center for Education Statistics, Jack Buckley, suggested that the improvement for Hispanic students may be explained by improved literacy skills rather than better understanding of economics.

The data show a persistent gender gap in economics, with males on average scoring 6 points higher than females on the NAEP scale of 0 to 300.

The results also show substantial gaps by race, ethnicity, and income, consistent with the patterns in evidence across NAEP subjects. For example, the 2012 data show that 53 percent of white students scored proficient or above, compared with 17 percent of black students and 26 percent of Hispanic students. Looked at another way, four out of 10 black students scored “below basic,” as did about 30 percent of Hispanics. For white students, the figure was just one in 10.

“I am particularly troubled about the NAEP economics findings when viewed by race/ethnicity,” said Terry Mazany, the president and CEO of the Chicago Community Trust and a member of the National Assessment Governing Board, in a statement. “This achievement gap is compounded by the parents’ education level.”

He notes, for example, that only 8 percent of black 12th graders whose parents did not finish high school scored at or above the proficient level. This figure jumps to 24 percent proficient or above for black students whose parents graduated from college.

Meanwhile, a scant 3 percent of U.S. students tested reached the “advanced” level.

Sample Question: Price of Grapes

The report provides some examples of questions included in the NAEP in economics. One asks: “Suppose that the price of grapes increased by a large amount. What will happen in the short term to the quantity of grapes demanded? Explain why.”

Only 9 percent of students achieved a “correct” score, while 70 percent of responses were deemed “partially correct.”

Another question asked: Which of the following best describes an opportunity cost for a student who chooses to quit a full-time job to go to college? It offered four answers:

(A) Paying state and federal income tax
(B) Having a higher level of education
(C) Giving up current wages and benefits
(D) Paying for housing and meals

Only 45 percent of students selected the correct answer, C.

Students fared better on a question on the national economy: Which of the following changes is most likely to cause an increase in employment?

(A) An increase in consumer spending
(B) An increase in interest rates
(C) A decrease in business investment
(D) A decrease in income

In this case, 74 percent selected the correct answer (A).

Mazany suggests that one big challenge to economics education is that it rarely gets sufficient attention in schools.

“Economics and financial-literacy components [of the school curriculum] have largely gone the way of health or driver education—often not available as an elective class and certainly not considered mandatory,” he said. “This is unfortunate, considering that everybody—regardless of status and background—is shaped by economic forces and policies. ... At a local level, we all have to pay monthly bills, keep a budget, manage loans, and figure out how to save for a car, house, and other big purchases.”

The new economics data come just a week after the Council of Economic Education issued a set of national standards for financial literacy at the K-12 level.

A version of this news article first appeared in the Curriculum Matters blog.