Final Contribution of Gifted Education to the New Zealand Economy Stage 1: Scoping

Contribution of Gifted Education to
the New Zealand Economy
11 April 2014
Final
Stage 1: Scoping
Preface
This report has been prepared for The Gifted Children Advancement Charitable Trust by Jason
Leung-Wai and EeMun Chen from MartinJenkins (Martin, Jenkins & Associates Limited).
Our goal is to improve the effectiveness and efficiency of the organisations we work with. We do
this by providing strategic advice and operational support in the following areas:

Strategy, Transformation & Performance

Policy & Economics

Evaluation & Research
MartinJenkins was established in 1993 and is 100% New Zealand owned. It is governed by
executive directors Doug Martin, Kevin Jenkins, Michael Mills, Nick Davis and Nick Hill, plus
independent directors Peter Taylor (Chair) and Sir John Wells.
Contents
Introduction
1
The Gifted Children Advancement Charitable Trust
2
Other support for gifted children
Gifted and Talented
4
8
What is gifted and talented?
8
Measuring gifted and talented
9
The case for investment in gifted and talented
10
Delivery gap
10
Excellence gap
11
Economic growth
13
Summary
16
Measuring the contribution of gifted education to the New Zealand economy
Summary
Recommendations
17
19
20
Collecting information on alumni
20
National best practice
21
International best practice
21
Bibliography
Appendix 1
22
Available information
24
Tables
Table 1:
Table 2:
Table 3:
Table 4:
Location of Gifted Kids activity ..................................................................................... 3
Students attending Gifted Kids, 2000 to 2013 ............................................................. 3
Approaches to measuring the contribution of gifted education .................................. 17
Available information .................................................................................................. 24
Figures
Figure 1:
School leavers by highest attainment and school decile, 2012 ................................. 12
Introduction
This scoping study outlines the economic arguments for focused investment into gifted
education. It also outlines the different methodologies for identifying the economic contribution
of gifted education and the contribution that Gifted Kids makes to enable gifted children to reach
their potential.
This scoping study is divided into four sections, which
1
outline the purpose and activity of the Gifted Kids programme
2
review the international literature on the correlation between IQ and economic wealth
and identifies approaches to measuring the economic value of gifted education, and
3
determine whether the methodologies are applicable in New Zealand and whether
New Zealand information is available to replicate the study/studies.
4
recommend what Gifted Kids can do to increase understanding of the economic
benefit of gifted education to New Zealand.
1
The Gifted Children Advancement Charitable
Trust
As well as increasing the strengths and the potential of gifted and talented children, specialist
gifted and talented programmes can address issues associated with disengagement,
underachievement and failure. We just don’t know how successful these children could be and
we should. Internal surveys by Gifted Kids show 99 percent of students believe Gifted Kids
helps them to achieve excellence and 84 percent of their school teachers believe that Gifted
Kids is helping their students.
The Gifted Children’s Advancement Charitable Trust (Gifted Kids) was established in 2000 by
Christine Fernyhough and Craig Anderson to ‘provide for and advance the education and social
development of gifted children by the provision of suitable facilities and programmes’.
Gifted Kids discovers, develops and celebrates gifted education and research in New Zealand
by working with local schools and families to provide services that enable gifted children to
develop their talents to their fullest potential. This is currently done through:

Gifted Kids Classes run by specialist Gifted Kids educators

Gifted Kids Centres funded and overseen by local communities with professional support
from Gifted Kids staff

Consultancy providing tailored professional development for educators, schools and parent
support workshops

A Gifted Kids Alumni Network.
Activity
Gifted Kids programme arm operates one-day-a-week classes for 7-13 year olds (Year 3-8
students) from local state schools who have been identified as having outstanding intellectual
and/or creative ability.
Children from over 160 different schools currently access the Gifted Kids curriculum at seven
sites around the North Island and three centres nationwide (Table 1).
2
Table 1:
Location of Gifted Kids activity
Type
Region
Location
Classes
Northland
Selwyn Park School, Dargaville
Auckland
Flat Bush School
Stanhope Road School
Waikowhai Intermediate School
Rotorua
Sunset Primary School
Hutt/Wellington
Rata St School and The Computer Clubhouse,
Naenae
Miramar Central School
Centres
Masterton
Masterton Intermediate School
Dunedin
North East Valley Normal School
Invercargill
ILT Gifted Kids Centre
There have been an estimated 3,400 students attend Gifted Kids since it opened in 2000
(Table 2).
Table 2:
Number of
students
Students attending Gifted Kids, 2000 to 2013
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
14
150
250
350
400
450
450
500
550
450
450
350
300
320
Source: Gifted Kids Database
More than 50 percent of students are from decile five or below schools and around 40 percent
of students are Māori or Pasifika.
Gifted Kids also offers professional development, support and consultancy services to
educators and schools and also workshops for parents.
3
Accessibility
Students are referred to the programme based on academic and/or creative ability (or potential
ability), identified by their school and/or family. This referral is followed by a group workshop
with the specialist Gifted Kids Entry Selection Team. Data from multiple sources is gathered,
triangulated and analysed to Gifted Kids Entry Selection benchmarks.

Some formalised testing that indicates the child is working or able to work at or above the
95th percentile; e.g. school reports or tests, extra-curricular activities, etc.

Specific information about the child's learning, social behaviour or development indicating
characteristics and/or ability in the gifted category, e.g. reading well at three years of age.

Examples of the child's work, e.g. writing, art, mathematics.

The ability to competently handle curriculum standards set for an age two years or more
above the child's age in their area of strength.
Other support for gifted children
Gifted Kids sits within a wider support framework for gifted and talented. Support for gifted and
talented children is provided by both government and the community. Community support is
largely provided through Trusts, with support from individual donors, families, charities and
volunteers.
Identifying the additional contribution of Gifted Kids to economic growth is complicated by the
government response and other support mechanisms that may also target gifted and talented
children.
Government response
The higher failure rate and underachievement of gifted and talented children is accepted at a
policy level, with the Ministry of Education requiring schools to identify and provide for the needs
of gifted and talented students.
Gifted and talented practice is expected in all schools in New Zealand. National Administration
Guideline (NAG) 1 (iii)(c) requires boards of trustees, through their principals and staff, to use
good quality assessment information to identify students who have special needs (including
gifted and talented) and to develop and implement teaching and learning strategies to meet the
needs of these students.
4
The Government has established national priorities under the following themes:

Economic transformation

Families, young and old and

National identity.
The Ministry suggests that the provision of programmes for gifted and talented students
contributes to these priorities and goals. They believe that effective gifted and talented
programmes help students to be healthy, innovative, creative, and confident learners who
achieve to their potential. Through these programmes, students are encouraged to take pride in
who they are and in their abilities, and to use these attributes in contributing to New Zealand
society. (Education Review Office, 2008)
However, in practice, a review of schools provision for gifted and talented children (Education
Review Office, 2008) suggests inconsistent application and performance with regard to gifted
and talented programmes in schools. Further, the quality of gifted and talented programmes is
skewed toward higher decile schools. In a review of 315 schools only 17 percent had provision
across the five areas evaluated and these tended to be high-decile schools in urban areas.
Thirty-five percent of the schools did not have good provision for gifted and talented students in
any of the evaluative areas.
1
Current activity is related to teacher curriculum support. According to the Ministry of Education
up to 50 schools will receive a targeted initiative, four resources will be developed and 10
regional strategy groups will be held. Further, 39 primary schools, eight secondary schools and
25 schools in five clusters would receive professional learning and development to support
teachers and school leaders to provide opportunities for gifted and talented students to reach
their high achievement potential.
The cost of these services is not available publicly. According to a 2011 article in the Education
2
Review , the Ministry of Education allocates around $1.2 million annually for gifted and talented
education. However, the article suggested that the majority of funding was allocated to online
materials and information on the TKI website, an email listserv, and professional development
at regional levels. Our understanding is that the funding for gifted and talented has not changed
significantly since then.
1
(Ministry of Education, 2013)
2
http://www.educationreview.co.nz/postgrad-and-research/september-2011/a-gifted-education/#.UzSp1pD2-Ul
sighted on 28 March 2014
5
Community support for gifted and talented children
There is also a network of community and parents, as well as the Gifted Kids programme, which
supports gifted and talented children and their families.
New Zealand Association for Gifted Children
3
The New Zealand Association for Gifted Children supports gifted students and their families
4
through a range of services. Regional branches organise outings, activities and talks for
students and parents. They have a library of books on giftedness, which are available for
members to borrow. An online forum on their site provides a place where parents can discuss
some of the issues they face in parenting a gifted child. They publish a magazine with a focus
on gifted children in New Zealand.
The Gifted Education Centre
5
The Gifted Education Centre was established as the George Parkyn Centre in 1995 to promote
professional support services for gifted children and all those living and working with them, and
is a registered non-profit charitable trust. The Centre runs a One Day School Programme in 13
6
venues nationwide , and has an online One Day School Programme. It also runs a range of
workshops and seminars.
The Gifted Children’s Advancement Charitable Trust and the Gifted Education Centre formally
announced their decision to merge and create the New Zealand Centre for Gifted Education.
This will come into effect sometime in 2014.
giftEDnz: The Professional Association for Gifted Education
7
Established in 2009, giftEDnz is a national association that provides networking, advocacy, and
support related to evidence-based practices in the education of gifted and talented students.
3
http://www.giftedchildren.org.nz/
4
Regional branches are based in Auckland, Pukekohe, Tauranga, New Plymouth, Wellington, and Christchurch.
There are other gifted groups in Hamilton, Rangiora, Taupo and Dunedin.
5
http://www.giftededucation.org.nz
6
11 in the North Island and one in the South Island.
7
http://www.giftednz.org.nz
6
giftEDnz provides a way of working together to nurture gifted and talented students, teachers,
principals, counsellors, RTLBs, educational psychologists, teacher educators, professional
development providers, researchers, postgraduate students and anyone with a professional
interest in gifted and talented education.
In addition to a quarterly online newsletter, the association hosts biennial national conferences
and an annual symposium, as well as special interest groups for professionals working with
gifted children in their early years of education, those who are twice-exceptional, and,
importantly, learners who are Maori with special abilities and qualities.
7
Gifted and Talented
This section defines gifted and talented and how the gifted and talented might be measured.
What is gifted and talented?
The term ‘gifted’ is often used in the literature to refer to high intelligence or academic aptitude
(Ministry of Education, 2012). ‘Talent’ usually refers to a high level of performance in a field or
area – for example, music, art, craft, dance or sport.
It is now generally accepted that the gifted and talented are not simply those with ‘high
intelligence'. In some cases ‘gifted’ and ‘talented’ are used to express a single concept (‘gifted
and talented’, GT, G & T, GAT). Definitions of gifted and talented can be classified as
conservative, liberal or contemporary:

Conservative definitions are usually based on a single criterion, such as intelligence, where
identification is based on a high IQ score. These definitions usually limit giftedness and
talent to a small percentage of the population (for example, 1–3 percent)

Liberal definitions are based on a broad range of criteria. They adopt an inclusive approach
that accepts a fairly high percentage (for example, 10–15 percent) of the population as
having special abilities.

Contemporary definitions tend to avoid stating any specific percentage of the population as
being gifted or talented because of different interpretation of variables associated with the
concept.
Riley et al (2004) identified six broad areas of giftedness and talented:

intellectual/academic

creative abilities

expression through visual and performing arts

social/leadership

culture specific abilities and qualities

expression through physical/sport.
8
Measuring gifted and talented
The various definitions and concepts of gifted and talented makes measurement difficult,
particularly when using contemporary definitions. However, with conservative definitions, the
measurement or indicator of ‘giftedness’ is usually related to various measures of cognitive skill,
for example, using measures of IQ, cognitive ability (e.g., Spearman’s g) or intelligence levels
8
through student achievement (PISA, TIMSS, PIRLS) .
Work by Rindermann (2008) and Rindermann, Sailer and Thompson (2009) suggests that
cognitive and intelligence can be used interchangeably, as national IQ results correlate so
th
highly with the results of international school assessments (TIMSS, PISA, PIRLS). The 95
percentile was equivalent to a within country IQ threshold of 125. Further, Rindermann, Sailer
and Thompson (2009) found that the positive impact on GDP can be isolated mainly to STEMrelated (science, technology, engineering and mathematics) achievement as opposed to
achievement outside the STEM fields, suggesting the former are the main drivers of national
affluence.
Percentiles, or the proportion of students who attained PISA level six in mathematics and
science, can be used to estimate the number of gifted kids in New Zealand.
8
TIMSS – Trends in International Math and Science Study is given every four years. 63 nations and 14
benchmarking participants took part in TIMSS, which is given at both fourth and eighth grades; PIRLS - Progress in
International Reading Literacy Study, is given every five years. 49 nations and nine benchmarking participants took
part in PIRLS. The latest international test scores were released in 2012. PISA (Programme for International
Student Assessment) is an international study that assesses three areas of knowledge and skills – reading,
mathematical and scientific literacy. Just over half a million students from 65 countries took part in PISA 2012. In
New Zealand, close to 4,300 students from 170 schools took part in the study in 2012.
9
The case for investment in gifted and
talented
Programmes to support gifted and talented children and enable them to reach their potential are
important for three main reasons. The first is a delivery gap, where the unique needs of the
gifted and talented population are not being met by mainstream curriculum, resulting in higher
failure rates and underachievement. Within this delivery argument sits a second reason related
to equality, which suggests that the gifted and talented in lower socioeconomic groups are
disadvantaged. This is referred to as the “excellence gap”. The third is an economic growth
argument, whereby enabling gifted and talented children should result in higher levels of
economic performance.
Delivery gap
Gifted (more so than talented) children are more likely to fail or underachieve than the general
population (the Delivery Gap). This underachievement is exacerbated in lower socioeconomic
groups (the Excellence Gap).
Gifted and talented children think and learn differently to the general population, and so
mainstream schooling often works against them. As a result, gifted children are more likely to
fail or underachieve.
Higher failure rates
A higher proportion of the gifted children population fails the school curriculum than the general
population. This is counterintuitive as gifted children are considered to be “smarter” and should
therefore not have a problem completing the curriculum. However, the reasons that gifted
children are more likely to fail are well documented (see Ministry of Education (2012)).
Drop outs generally are related to high social costs: higher unemployment, frequently suffer
from health problems, more often involved in deviant activities, and become dependent on
social welfare/state support programmes (Garnier, Stein & Jacobs as cited in Stamm, 2008).
Internationally, the estimates of gifted students who drop out of high school range widely
between 4 and over 20 percent often due to different criteria used to measure giftedness
(Stamm, 2008).
The drop out rate for New Zealand gifted children is unknown, but in 2012, the percentage of all
school leavers who left with little or no formal attainment was 5.8 percent (Ministry of Education,
2014).
10
Underachievement
Underachievement is the difference between what a student is capable of doing/producing (their
potential) and what they are actually doing/producing.
Dowdall and Colangelo (1982) explain that there are three underlying themes in the definition of
underachievement:
1. Underachievement as a discrepancy between potential achievement and actual
achievement
2. Underachievement as a discrepancy between predicted achievement and actual
achievement
3. Underachievement as a failure to develop or use potential.
Moltzen (2011) cites a number of studies which highlight that underachievement by gifted
children is widespread, and acknowledges that “it is difficult to measure the exact magnitude of
the problem, but it is large” (Davis & Rimm, 1998).
The loss to society of the unrealised potential of gifted children is a significant issue.
Excellence gap
Intelligence has a normal distribution. Therefore there are likely to be as many gifted children
born into lower socioeconomic economic groups as higher socioeconomic groups.
The excellence gap suggests that gifted children from lower socioeconomic groups do not
develop their ability as well as gifted children from higher socio economic groups (Feinstein,
2003). This is consistent with general educational achievement where students from lowest
income families were approximately eight times more likely to be dropouts than those from the
highest income families (National Center for Education Statistics, 1997).
For low-income students, Wyner, Bridgeland and Diiulio (2007) found that only 56 percent of
first graders remained in the top achievement quartile by the fifth grade, compared to 69 percent
of higher income children. These academic disparities persist through and after high school.
Wyner et al. found that although high achieving, low-income students tend to graduate from
high school on time, they are more likely to attend less selective colleges than their more
advantaged peers (21 percent vs. 14 percent), are less likely to graduate from college (49
percent vs. 77 percent), and are less likely to receive a graduate degree (29 percent vs. 47
percent).
11
This is apparent in New Zealand schools, where higher decile schools have a greater proportion
of school leavers achieving higher levels of attainment. Conversely, very few leavers in decile
ten schools (4 percent) leave with no qualifications compared to 29 percent in decile one
schools (Figure 1).
Figure 1: School leavers by highest attainment and school decile, 2012
<level 1
Level 1 +
Level 2+
level 3 +
% of school leavers
100%
80%
60%
40%
20%
0%
Decile Decile Decile Decile Decile Decile Decile Decile Decile Decile Total
1
2
3
4
5
6
7
8
9
10 Leavers
2012
source: Ministry of Education
Note: Schools in decile one have the highest proportion of students from low socio-economic backgrounds.
Schools in decile ten have the lowest proportions of these students.
In the latest PISA results, less than one percent of New Zealand students in the low
9
socioeconomic status attained Level 6 in mathematics or science. This compared to 4.5
percent and 2.7 percent of all New Zealand students attaining Level 6.
9
12
The 25 percent of students with the lowest index of economic, social and cultural status
Economic growth
Higher levels of education and IQ are positively correlated to economic performance.
Level of education and growth
The level of education has a direct bearing on the ability of the individual to earn more. This
translates through to the national level, where countries with higher educational attainment have
higher per capita incomes (Hanushek & Woessmann, 2010).
In 2010, average earnings in New Zealand were 24 percent higher for those with a tertiary
education compared to those with only upper secondary and post secondary non tertiary
10
education . Further, people with a tertiary education are more likely to be employed and are
less affected by fluctuations in unemployment than those without a tertiary qualification
11
(Education Counts, 2012).
IQ and economic growth
The OECD’s statistical analysis and 23 case studies of regions across the OECD area find that,
for all regions, human capital is critical for growth (OECD, 2012). The link between human
capital and cognitive skill has been shown across a range of different research disciplines to
explain job performance, income, national income and income inequality (Schmidt & Hunter,
1998; Lynn & Vanhanen, 2012).
10
This premium was lower than for OECD countries (55 percent) and well below the United States (77 percent) and
the United Kingdom (65 percent) (Education Counts, 2013).
11
In 2010, the unemployment rate for people with a bachelor degree or higher was 4.1 percent compared to 8.3
percent for people with a school qualification and 9.4 percent for people with no qualification.
13
Lynn and Vanhanen’s (2002) book made the case that there was a high correlation (between
r=0.57 and r=0.77) and therefore causal relationship between mean IQ and per capita income
(on a number of measures: GDP per capita, real GDP per capita, GNP-PPP per capita, GNP
12
per capita, GNI-PPP per capita) . This was based on the administration of intelligence tests for
the populations of 81 nations. A number of criticisms of the work have been made Barnett and
Williams (2004):

Validity of national IQs.

Reliability of national IQs.

Direction of causality.
On the validity critique, Lynn and Vanhanen (2005) respond by showing that the majority of
national IQ tests used were based on nonverbal tests (such as Raven’s Progressive Matrices)
and are therefore more culturally fair. They also note the relationship between national IQ and
education attainment to indicate the validity of national IQ as a measure of cognitive ability.
On reliability, Lynn and Vanhanen (2005) use two or more independent investigations for 45
countries and found that the correlation, and therefore reliability, between two measures was
high (at .94).
In their defense, Lynn and Vanhanen (2005) explain that they do not subscribe to a one-way
causal relationship between IQ and income, instead they proposal a reciprocal interaction, so
that national IQs determine wealth, and national wealth is a determinant of IQ (particularly
through environmental determinants such as poor nutrition and health).
Lynn and Vanhanen’s (2012) most recent review shows that the relationship between IQ and
economic growth holds over long time periods (for example, between 1500 and 2000). Note
that over very short time periods (for example, 10 years), the correlation is usually lower and
often zero, due to various economic shocks which are smoothed out over longer time periods.
Interestingly, these studies suggest that lower IQ countries do not experience faster economic
growth rates than high IQ countries (built on the assumption that technology and management
practices would accelerate growth at a higher rate for lower IQ countries). It has been posited
that higher IQ countries may have greater ability to establish effective economic institutions
which underpin economic growth (Meisenberg & Lynn, 2011 as cited in Lynn and Vanhanen,
(2012)). This leads to the hypotheses that argue the economic contribution of the gifted and
talented; the “smart fraction” or the “intellectual class”.
12
14
Meisenberg (2004) subsequently measured per capita income as log GDP and increased this correlation with
national IQ to 0.82
Gifted and talented and economic growth
Increasing the share and performance of our gifted and talented can have a greater impact on
economic performance than increasing the mean. However, this is also dependent upon
increasing the mean to provide the pool of talent.
There is a body of work suggesting that an increase in the cognitive ability at the gifted and
talented group level has a greater impact than increasing the cognitive ability of the mean.
Further, the larger the proportion of contributing gifted citizens in an economy, the greater the
impact on economic performance.
Rindermann, Sailer and Thompson (2009) posit the “smart fraction” theory, where gifted and
th
talented persons (defined as the 95 percentile) are especially relevant for societal
development. Rindermann and Thompson (2011) put forward the “intellectual class
hypothesis”, which posits that individuals who are cognitively highly competent should have a
positive effect on affluence, politics and culture in their society. This is a similar hypothesis
alluded to in a number of other disciplines including Florida, (2002) “the creative class”,
Hanushek and Woessmann (2009) “rocket scientists”, Pritchett and Viarengo (2009)“global
performers”.
Hanushek and Woessmann (2007; 2010; 2012), have a focused stream of work that shows
educational performance at different points in the distribution have separate effects on
13
economic growth. Using PISA test data and GDP across 24 OECD countries, they found that
a 10 percentage point increase in the basic skill share is associated with 0.3 percentage points
higher annual growth. This compares to 1.3 percentage points higher for the top skill share.
However, when comparing OECD countries the effect on GDP is insignificant between basic
skill share and top skill share. A conclusion is that high performers make higher contributions to
growth, and that this observation is more apparent in poorer countries.
A case was put forward by Moltzen (2003) that while New Zealand was not categorized as a
poor country, its transformation from an agricultural commodity based economy to one based
on innovation and newer specialized skills, means it would benefit from increases in the number
and share of its smart fraction.
14
Building on the Hanushek and Woessmann’s work and addressing some of the criticisms ,
Rindermann and Thompson (2011) concluded that “in modern society, the cognitive level of
13
Programme for International Student Assessment.
14
Using GDP as an indicator of wealth rather than ‘log GDP’ which would give relatively more value to increased
wealth at lower levels than at higher levels; a number of countries were missing from the analysis; the three
cognitive ability levels were highly correlated with each other; it failed to explore the impact of other possible
determinants of wealth; and did not explore the hypothesis that the development and functionality of economic
institutions themselves could depend on cognitive ability, especially on the cognitive ability of an intellectual class.
15
the intellectual class and its relative size are more important for economic development
than are the mean cognitive level or the cognitive level and relative size of lower-ability
groups” (p. 761) The study found that an increase of 1 IQ point in the intellectual class raises
the average GDP by 2.04 times the increase of 1 IQ point in the mean.
Rindermann (2012) went further, exploring the cognitive ability level of the intellectual class. He
suggested that there was a network dimension where the cognitive competence of social
networks, institutions and societies in their interplay that enabled wealth. Rindermann’s
conclusion was that “wealth in modernity depends largely on technological progress and
this progress depends on the ability level of the intellectual class” (p. 112).
Summary
The evidence identifying the delivery and excellence gaps, and the positive relationship with
economic performance provides sound arguments to provide targeted support for gifted and
talented.

Delivery gap – left in mainstream education, gifted kids are more likely to fail or
underachieve.

Excellence gap – gifted children from lower socioeconomic groups do not develop their
ability as well as gifted children from higher socio economic groups.

Economic performance – there is a positive relationship between both higher education
and IQ and GDP growth. Further, improved performance at the high skill level will have a
greater impact on economic growth that improved performances at lower skill levels.
Thus, there is a cost to society in terms of increased failure but also in terms of lost potential.
There is direct economic benefit from reducing the failure rate of gifted children across all
socioeconomic groups and enabling them to achieve their potential in terms of incomes and
associated contribution to GDP. There is also the additional benefit of reduced costs to society
for those that fail (crime, employment costs, and health costs). In addition, there is an added
economic benefit in terms of achieving increased rates of economic growth through increasing
the “smart fraction” of the population.
There does not appear to be precedence for measuring the economic value of gifted education.
There are studies that evaluate the programme effects and the effects of programme design on
intended outcomes, and there are studies that highlight how the top tier in terms of cognitive
ability contributes to economic growth. However, to date, there is no published or ‘grey
literature’ that measures the full economic value of gifted education.
16
Measuring the contribution of gifted
education to the New Zealand economy
From the literature review no studies were identified that effectively quantified the contribution of
gifted education at an individual or a national level and that could be replicated in the New
Zealand context. However, the delivery and excellence gaps, and the relationship between the
share of gifted and GDP growth (the smart fraction) suggest three broad approaches could be
used to quantify the contribution of gifted education to the New Zealand economy.
Table 3:
Approaches to measuring the contribution of gifted education
Approach
Description
Individual
benefits
approach
This approach would measure the contribution of gifted education at the
individual level. The basic premise is that individuals with higher qualifications
make more money and are less likely to be unemployed than individuals with
lower qualifications, on average.
We know that average earnings in New Zealand in 2010 were 24 percent
higher for those with a tertiary education compared to those with only upper
15
secondary and post secondary non tertiary education . Further, people with a
tertiary education are more likely to be employed and are less affected by
fluctuations in unemployment than those without a tertiary qualification.
By understanding the likely increase in the proportion of gifted children that
continue through to tertiary education as a result of gifted interventions we can
estimate the likely average income effects over the lifetime of an individual.
This approach underestimates the benefits of gifted education as it does not
consider societal benefits and costs.
Increase in
GDP
approach
This approach aims to identify the additional GDP that would result from an
increase in the smart fraction or intellectual class. This captures the wider
benefits of having a larger intellectual class.
There is a stronger correlation between high national GDP and the smart
fraction than high national GDP and average cognitive ability.
15
(Education Counts, 2013). This premium was lower than for OECD countries (55 percent) and well below the
United States (77 percent) and the United Kingdom (65 percent).
17
Hanushek and Woessmann (2009) in a study of student achievement and
within country distribution, found that a 10 percent improvement at the top end
of the ability range would have four times greater impact than a ten percent
improvement of average ability levels (1.3 percentage points compared to 0.3
percentage points). However, this does not hold when looking at the OECD
sample.
Rindermann and Thompson (2011) found that an increase of 1 IQ point in the
intellectual class raises the average GDP by 2.04 times the increase of 1 IQ
point in the mean.
Applying these ratios to the New Zealand situation would give an order of
magnitude of the potential increases that could result if effective gifted and
talented programmes were implemented.
Full Cost
Benefit
Approach
The most comprehensive approach would be to apply a cost-benefit analysis
where the benefits of reduced rate of failure and improved economic outcomes
are compared to the cost of delivering the programme.
Cost Benefit Analysis is an economic assessment tool that identifies all the
costs and benefits over the lifetime of the intervention/policy to determine
whether it is a sound investment decision or to compare against other
investments. Benefits and costs are identified and expressed in monetary
terms and adjusted for the time value of money so that all flows of benefits and
costs are expressed on a common basis in terms of their net present value.
While Cost Benefit Analysis has not been applied to gifted and talented, it
been applied to other similar areas such as Early Childhood Education (ECE),
where the interventions (costs) and the economic and wider benefits
associated with ECE are relatively consistent.
Lynch (2004) applied a cost benefit approach to identify the economic
contribution of Early Childhood Development (ECD) programmes. The study
found that providing all 20 percent of the nation’s (US) three and four year old
children who live in poverty with a high quality ECD programme would
generate a positive return by year 17. The results also include an increase in
GDP and a decline in costs related to crime. The analysis of four ECD
programmes identified benefit-cost ratio ranging from 3.78:1 up to 8.74:1.
In New Zealand, there have been no cost-benefit analyses into ECE
programmes. Rather, the economic evidence cited by the ECE Taskforce in
their final report (2011) relies heavily on this overseas (US) data.
18
Summary
The ability to apply the findings from international studies to New Zealand is hindered by a lack
of complete information. Identifying and collating the necessary information would require a
significant investment in time (longitudinal data) and resource.
The most accurate and robust approach would be to do a cost benefit analysis, as applied in a
number of ECE studies in the United States and referenced in the ECE Taskforce report to
support further investment in ECE in New Zealand. However, this is well outside the resourcing
and timeframes of this project.
Similarly, the increase in GDP approach is complex and is subject to a number of factors and
assumptions, which is why it has not been extensively applied. In our view, this approach would
be useful only in terms of providing some orders of magnitude or to demonstrate the
relationship between an increased smart fraction (facilitated by the gifted programmes) and
GDP growth.
Further hindering all of these approaches is the fact that there is limited information on gifted
children in New Zealand. The focus of work through the Ministry of Education is operational in
terms of addressing the delivery gap. Further, their liberal/contemporary approach toward
identifying and defining gifted and talented means there is no evidence of the quantum, or
identification and tracking of gifted children.
19
Recommendations
Based on this scoping study, the information needed to estimate the contribution of gifted
education to the New Zealand economy is not available. Further, the timeframe required to
collect the necessary evidence as well as the complex methodology means that a robust
estimation of the contribution of gifted education to the New Zealand economy (proposed stage
2) is not currently a viable option.
However, from a theoretical perspective there is strong evidence that a higher proportion of
gifted people in an economy will result in increased economic performance.
In terms of taking this project forward, we recommend that Gifted Kids undertake research to
increase the understanding of the value of gifted education. While the research will not give us
the “answer” it will go some way toward providing a quantitative assessment to support
investment in gifted and talented programmes. Further, in the longer term it should provide the
data required to undertake a full cost-benefit of the value of Gifted Kids and the contribution of
gifted education to the New Zealand economy.
Collecting information on alumni
The main evidence base for estimating the value of gifted education is the future performance of
alumni. A robust monitoring system should be set up that collects relevant demographic and
performance of children that attend Gifted Kids and then monitors their performance going
forward – secondary, tertiary, job etc.
There is also potential to capture information on existing Gifted Kids alumni, which could
provide useful information on students who have been through the programme. There is
potential to put together case studies of successful alumni that can be used to promote the
programme and its effectiveness.
The data collected from alumni should:

show how Gifted Kids has addressed the delivery and excellence gap.

contribute to future analysis on the relationship between gifted children that achieve their
potential and economic growth.
20
National best practice
There is potential to assess or describe the performance of schools that successfully apply the
National Administration Guideline on gifted and talented well.
Further, there is a range of partial analysis that would support the case for gifted education
programmes. Possible areas include:

identifying the extent of the problem. That is identifying the number of gifted children in
New Zealand.

identifying the proportion of those that are likely to fail or underachieve and then the
potential costs of failure, and the lost benefits from underachievement.

exploring the potential impact of cognitive ability on economic growth in New Zealand –
based on international evidence.

outlining the potential benefits of gifted education on different outcome areas – partial
analysis as outlined in the previous section.
International best practice
The research programme should investigate how other countries are approaching gifted
children issues, particularly those that are proactively seeking to identify and accelerate the
performance of gifted children.
21
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Appendix 1
Available information
The following table identifies information that could be used to support partial analysis of the
economic contribution of gifted education to the New Zealand economy.
Table 4:
Available information
Measure
Description
Source
Population/GDP/employ
ment/incomes
Information on population, employment and GDP is available from
Statistics NZ and can be used to identify average GDP per capita
and GDP per employee
Statistics NZ
School roll
Available by Decile and Ethnicity and student year level 2005 to
2013
Education counts
PISA results by subject
and by socioeconomic
status
4.5 percent of New Zealand students attained level six on the PISA
mathematics scale. 2.7 percent of New Zealand students attained
level six on the PISA science scale
Ministry of
Education
Less than one percent of New Zealand students in the low
socioeconomic status (25 percent of students with the lowest index
of economic, social and cultural status) attained level six in
mathematics or science.
Drop out Rate
Smart Fraction
We know the general failure rate for all students in New Zealand
(5.8%). We don’t know the drop out rate for gifted children
although we know it is higher. Internationally it is somewhere
between 4 and 20 percent.
(Ministry of
Education, 2014);
In a study of student achievement and within country distribution,
found that a 10 percent improvement at the top end of the ability
range would have four times greater impact than a ten percent
improvement of average ability levels (1.3 percentage points
compared to 0.3 percentage points).
Hanushek and
Woessmann
(2009);
An increase of 1 IQ point in the intellectual class raises the average
GDP by 2.04 times the increase of 1 IQ point in the mean.
Education and
income/employment
Between 2002 and 2011 the average unemployment rate of those
with no school qualification was 2.6 times the average
unemployment rate of those with a tertiary education;
Between 2002 and 2011, for people aged 15 plus, the real median
hourly earnings for a person with a bachelor degree ($27.15) was
1.7 time higher for a person with no qualifications ($16.88).
24
(Stamm, 2008)
Rindermann and
Thompson (2011)
Education at a
Glance (2012);
New Zealand
Income Survey