Saturday, September 16, 2017

Dealing with the hypocrisy surrounding academic achievement in Singapore.

The inspiration for the post came about because I am currently reading Private Education Singapore : Contemporary Issues and Challenges by Sam Choon-Yin, the Dean of PSB Academy. I picked this book up out of personal curiosity and, given my career plans, I really have no business sticking my nose into Private Education industry in Singapore but the information contained within the tome is too interesting for me to miss out on it.

More details will follow once I finish the book but I just want to share some ideas surrounding Singapore's inherent hypocrisy around academic achievements and how we can employ some economic concepts to understand why people sometimes act like hypocrites when it comes to academic performance in our neurotic society today.

I think the starting point is to understand what a positional good in economics is all about.

A positional good has this property whereby the benefits that you derive from this good is much greater when fewer people have such a good. Folks with this good essentially play a zero-sum-game against folks who do not have this good. In Singapore, a higher education like a degree is a positional good. The fewer people with access to a higher education, the more benefits accrue to folks with a degree.

Let us use this economic idea to deal with some situations we face in our daily lives.

a) People who want to de-emphasise the professions in daily conversation in favour of vocational training.

I observe that this is getting more common in a competitive society. There is always someone who speak of hawkers, plumbers and electricians as if they are noble savages and decry others who are academically competitive because in some Western societies, we are observing that salaries of folks who perform technical or personal services are climbing but the professions are currently being disrupted.

Normally, I would respect these folks if they are consistent with their proclamations with kids who take up a vocational career. But if you look at what they do for their own children, you will find that they often enrolled their own kids in the better local or foreign university programs.

The idea that education is a positional good completely explains such behaviour : If you can convince other people to play down their academic ambitions, it's ultimately better for yourself or your children.

My dad's friends have always teased me for academic performance for decades. You can hear a pin drop when I tell them that if they have a problem with my stellar performance, they need to get their own kids to drop out of school for their own good and let me mind my own business and personal ambitions.

Of course, not everything these folks say is untrue.

The Singapore government is raising the percentage of the cohort who can get into local universities to 40%. This will effectively reduce the benefit that any person can derive from having a degrees versus those who are not having a degree because the situation in the future is that more people have degrees.

The effect of this policy is predictable :  The arms race fought between parents will simply shift towards getting their kids into prestigious postgraduate qualifications.

The erosion of the benefits of having a degree is not about seeking vocational or lower qualifications but seeking more complicated and prestigious academic credentials.  Net result : People are going to spend a greater part of their lives in school reading more complicated academic texts.

Therefore, hypocrites really just want you to play the game the wrong way.

b) Legal industry's problems derives from legal training being a positional good.

This cuts deep into the bone for my classmates currently doing Part B.

A licensed advocate and solicitor 20 years ago makes a decent premium compared to an engineer even though we never had that situation where the law faculty attracted all the folks with straight As unlike our current situation today. The problem then was that the earnings of a legal professional is tied to the value of a law degree as a positional good. Fewer people with the degree that leads to a practise license would spark a war of talent among law firms. As an engineer who had my salary depressed by decades of additional engineering manpower supply from India and China, I found it hard to accept that I had to live on a lower standard of living because of the choice of my degree.

The music for legal professionals has stopped recently when parents started sending their kids to approved law schools by the dozens. These returnees from foreign countries created a lot of supply and  law firms can basically offer any salary package to a rookie associate because there are so many folks willing to do the work for less pay.

Of late, a lot of VIPs have spoken about the need to treat junior lawyers better and it was particularly entertaining that they are using a moral appeal in the hopes that things will get better.

I would suggest to my cohort that moral appeals seldom work where economic incentives are absent to improve someone's lot in life. Just look at how badly some of us engineers are doing in our 40s today.

Your legal qualification is a positional good, things can only get better when the industry has the ability to squeeze out more people and prevent others from joining the profession.

But this introduces a problem for us Part B students because wishing for that might mean that we, too, would be squeezed out in the process of tightening standards.

c) The solution ?

At the micro-level, there's hardly very much we can do when everyone is sacrificing other non-positional goods like building a family or getting more time for leisure. In Singapore, it's just nothing but the endless struggle for positional goods - better degrees, better grades and hopefully, better pay. The authorities love this because this makes us such hard-working and conscientious workers.

Perhaps the financial blogosphere has part of the answer - Struggle now and build up a portfolio of savings that can replace part of your income.

The trump card in Capitalism is more Capital.

No company will deny you your dividends over your educational qualifications.

But to earn enough to put some aside in an investment portfolio requires decent pay - which is a function of educational qualifications in the first place.







2 comments:

Spur said...

Those VIPs are KPKB becoz it's affecting more & more of their family members. Not just for law but also for medicine. The other side of the coin is that by commoditizing such services e.g. legal or medical, it probably benefits more of the masses with greater access (cheaper) & more choices. In previous decades many such professions were (and still more or less are) protected by policy mainly through quota as well as family background checks. Such artifices can be easily removed if there is societal changes and/or political change of direction. It can be seen that over the decades as previous generations of policymakers are replaced by new ones, a greater degree of laissez faire is being tolerated.

E.g. 10 years ago, getting an average lawyer to do probate was easily $4000 a pop, even for brain-dead straightforward cases. Now one can find lawyers doing it for $1500 all-in pricing. After factoring general inflation, that's like $1100 in 2007 dollars.

A near 4X drop in value --- that's what VIPs are KPKBing about.

Christopher Ng Wai Chung said...

Thanks, I was not aware that probate can be so cheap myself !