Economic Illiteracy: Why Has K–12 Economic Education Failed?

Robert Highsmith

The 2016 election season boggled the minds even of knowledgeable observers predisposed to expect the worst from political candidates. Contrary to the consensus of academic economists,1 Republicans made the following comments in various campaign venues in 2016:

  • “GDP was zero essentially for the last two quarters.” (Donald Trump during the March 10, 2016, GOP debate in Miami, Florida)

  • “Don’t believe those phony numbers when you hear 4.9 and 5 percent unemployment. The number’s probably 28, 29, as high as 35. In fact, I even heard recently 42 percent.” (Donald Trump during a February 9, 2016, victory speech after the New Hampshire primary)

  • “During the eight years under Ronald Reagan, African American median income rose by about $5,000.” (Sen. Ted Cruz during a February 3, 2016, town hall meeting in Henniker, NH)

  • “Obamacare is the biggest job killer in this country—millions of Americans have lost their jobs, have been forced into part-time work.” (Ted Cruz in comments during the January 28, 2016, Iowa Republican debate)

  • “[Gov. John] Kasich delivered the largest tax cut in the nation.” (Comment appeared in a “Kasich for America” advertisement, February 24, 2016)2

Democratic candidates, not to be outdone by the Republicans, pandered similarly well to the economic ignorance of their voters. Democratic candidates made the following statements:

  • Says she will “work to raise the federal minimum wage back to the highest level it’s ever been—$12 an hour in today’s dollars.” (Hillary Clinton in a February 12, 2016, column posted on

  • “We’ve now driven health care costs down to the lowest they’ve been in fifty years.” (Hillary Clinton in comments during the South Carolina Democratic presidential debate on January 17, 2016)

  • “NAFTA, supported by…Secretary [Clinton], cost us 800,000 jobs nationwide.” (Sen. Bernie Sanders in the March 6, 2016, Democratic presidential debate)

  • “Americans are working longer hours for low wages…and yet almost all new income and wealth is going to the top 1 percent.” (Bernie Sanders at the February 4, 2016, Democratic presidential debate)3

Actions taken by any of these candidates, Republican or Democrat, to correct what they say is broken have potential to do serious economic harm to the nation. Most voters would reject them if they had the necessary economic understanding, but they do not. A majority of the public (both Democrat and Republican) in one widely publicized poll say that most Americans want more from the government than they are willing to pay for in taxes.4 Those with higher levels of income or education are among the most likely to say that the public expects more from government than they are willing to pay for in taxes. An inability to connect the dots leaves voters unable to understand the consequences of their votes—for themselves and for the nation.

That economic literacy matters in elections is not in dispute, and there’s no reason to doubt that voters’ economic understanding has consequences in all elections. Today many young voters supported a self-declared democratic socialist in the 2016 primaries. This raises the question, why are American voters so ill-informed about basic economic understanding? What kind of economic understanding do pre-college teachers and students have? Why do they appear to have so little?

Economic Education, Generations 1, 2, and 3

I spent twenty-five years (1969–1996) working in various capacities around the country educating teachers and students in basic economic concepts and principles that appropriate authorities widely acknowledge as providing the essentials for economic literacy.5 The national network of economic educators of which I was a part built national, state, and local capacities to enhance economic literacy from kindergarten through the first two years of college. It created nationally normed and standardized tests to assess the level of economic understanding resulting from its programs, and established a network of researchers and two research journals to motivate scholars to build a scientific foundation for its work. All of this seemingly good work over sixty years notwithstanding, candidates from both political parties discovered anew in 2016 that they gained traction with voters when they appealed to the economic ignorance of their fellow citizens and lost traction when they did not. Why did my colleagues and I fail to deliver on the economic literacy needed by a woefully uninformed electorate?

An attempt to answer that question, at least in part, follows. It includes a description of the economic education infrastructure the national network created during the three generations after WWII to enhance Americans’ economic literacy, and offers speculations that may account for the seeming failure of the effort. The network was called the Joint Council on Economic Education in the first generation, renamed the National Council on Economic Education in the second generation, and rebranded the Council for Economic Education in the current generation. For clarity, references to economic literacy refer to how well teachers, students, and citizens perform on nationally normed and standardized tests of economic knowledge,6 the most common way economic literacy is assessed. Overwhelmingly, assessments of economic understanding have relied upon these tests, and most of the scholarly research has relied on them as well. Other definitions of economic literacy do not come close to rivaling the credibility of the one used here.

The Joint Council on Economic Education (JCEE), founded in 1948 by leaders in organized labor, corporate America, leading universities, and the U.S. government, was created as an antidote to widespread fears that the nation would return to the Great Depression following WWII. Founded and staffed by volunteer leaders of the four sectors of the economy and chaired by the first head of the President’s Council of Economic Advisers, it was a promising start. The American Economic Association (AEA), the leading professional association of economists then and today, played a seminal role in ensuring the objectivity, nonpartisanship, and academic centeredness of the JCEE’s work. The AEA created a standing Committee on Economic Education (CEE) to ensure that the economic content imparted by JCEE programs reflected consensus thinking about the core of economic literacy. Leading researchers associated with the CEE published seminal articles on economic literacy in the American Economic Review, the nation’s most prestigious economics journal, raising awareness of its importance and signaling to scholars that research in the field could be published in prestigious academic journals.

The JCEE also developed and piloted courses for teachers, published teaching materials for national distribution, created statewide affiliates and a model for effective delivery of programs through them, developed the first test of economic understanding for high school students and launched the Journal of Economic Education to encourage research on economic literacy, its sources, and how to sustain it. These achievements, and the success of the founders in producing and energizing a highly trained and dedicated second generation of staff leaders to sustain what they started, resulted in infrastructure of amazing depth and resilience and made the founders’ reputation as the greatest generation of economic educators.

I joined the economic education movement in the late 1960s as part of the vanguard of second generation economic education leaders. Many of us benefited from the National Defense Education Act’s post-Sputnik funding of two year-long, masters-level programs at Purdue University that provided advanced study of economic content and how to teach it effectively, kindergarten through high school. Many of the participants in that program pursued doctoral programs in economics afterward, to prepare them to lead economic education in its second generation.

Our generation expanded the economic education delivery system into a truly national network of statewide councils of economic education, modeled after the successful pilots of the JCEE founders. Each state council recruited the state’s most influential representatives from organized labor, business, academe, and government to serve on its board, and they secured the private and public funds that supported teacher training and development of teaching materials tailored to the state’s unique needs. Each state council built a network of campus-based centers for economic education, located in departments of economics and/or colleges of education, that were critical to its ability to deliver objective, nonpartisan academic economic understanding, and each built a network of school districts dedicated to infusing economic literacy programs in their schools, K–12.

While all of this was going on at the state and local levels, the second generation now leading the JCEE expanded the work of the founders by creating instructional materials and tests to assess the impact of economics teaching beyond high school to the elementary school, middle school, and undergraduate courses in college. It established a research department and conducted national research training conferences at Princeton University to deepen the scientific foundations of the work. The national office conducted several national assessments of economic literacy,7 wrote the national standards for economics still used to assess high school economic literacy,8 and collaborated with the College Board in creating an Advanced Placement course in economics.9

The second generation also created the National Association of Economic Educators, the NCEE, another pillar of the economic education infrastructure, to professionalize the work of the more than two hundred directors of statewide councils and local centers who staffed economic education across the country. It broadened the net of economic education professionals to include interested pre-college teachers and launched a new research journal in 2000, the Journal of Economics and Economic Education Research,10 to study, research, and disseminate information to improve the teaching of economics, with an editorial board composed primarily of directors of councils and centers for economic education.

The third generation of leaders currently in place at the national and state levels is adding to the infrastructure it inherited by marketing economic education with state-of-the-art websites, distributing teaching materials and programs electronically, and linking professionals and programs digitally.

One might reasonably expect that the accomplishments of three generations, many of which survive to this day, would have endowed our country with many if not a preponderance of economically literate citizens. As indicated by the 2016 election season, if it has, they do not yet constitute the critical mass needed to sway elections. The most recent national survey documents that no improvement in measurable economic understanding has occurred in the last two years.11 Why not, after the effort expended by the JCEE in the first generation, the NCEE in the second generation, and the CEE today? The answer needs thoughtful inquiry far beyond the scope of this article and deserves to be the focus of deeper study.

Economic Education, Generation 4?

Several promising lines of inquiry may provide guidance regarding how to enhance the efficacy of economic education going forward. The first of six would investigate the importance of the quality of the national and state-level boards to the success of economic education. The distinguished board members who founded the national organization were followed by less distinguished replacements in each ensuing generation. It’s easy to imagine that the founders’ fear that the nation would slip back into depression lessened with the passage of time after WWII as greater confidence in the nation’s ability to avoid such a calamity was achieved. If so, it is easy to see how difficult it would prove to be to sustain the level of enthusiasm and commitment of the founders. Whatever the reason, the board members guiding the national and state councils today lack, for the most part, the influential voices and outsized personalities from the tops of organized labor, business, government, and academe who energized and funded economic education in its earliest days. Is it possible today to populate voluntary boards at the national and state levels with influential, passionate, and committed volunteers for the mission of economic literacy on which the first generation’s success depended?

Second, are there forces within school districts that militate against sustained, tightly integrated curricular interventions over twelve years of schooling like those required for economic literacy in the U.S.? School districts are inundated with outside requests for a part of the school day to instruct students in matters of vital importance to the proponents. The finite length of the school day and the unrelenting pressure to squeeze in more material militate against the success of initiatives, like economic education, that depend for their success on cumulative learning of teachers and students K–12, far beyond what can be achieved by stand-alone courses offered one time at the end of high school. The normal course of mandating new teacher training programs and instructional initiatives necessarily squeezes out at least part of current programs, weakening their cumulative impact. Is it possible to achieve economic literacy, or any other form of literacy, through the schools under these conditions?

Third, are economic educators holding themselves accountable for success on tests of economic literacy, both at the end of each teacher training program and cumulatively across the array of programs the states conducted? The economic illiteracy of American voters may reflect the failure of economic educators to commit to and hold themselves accountable for achieving measurable results. The JCEE invested enormous resources in creating standardized tests of economic understanding at all levels, elementary school through college, but it did not follow up that investment with accountability standards based on the tests to assess the level of enhanced economic literacy achieved by each program and cumulatively. Busy affiliates were allowed to choose whether or not to use the tests, other pressures can be reasonably assumed to have consumed the available time to do so, and, as a result, no systematic attempt was made by every statewide affiliate to assess the cumulative effects of its programs in enhancing economic literacy, the occasional national assessment notwithstanding. Had a mandate for accountability been in place it would have been possible to demonstrate either the cumulative contributions to economic literacy resulting from such programs or the fine-tuning needed to achieve it. Absent a commitment to tracking the cumulative effects of K–12 economic literacy programs, and holding itself accountable only for demonstrating the results for each teacher training course, economic education today is doubly jeopardized by an economically illiterate citizenry and a paucity of evidence of what can be done to fix it. Would mandated accountability standards for statewide economic education programs enhance economic literacy?

Fourth, do the academic credentials of leaders in economic education make a difference in the economic literacy of the nation’s citizens? The individuals leading the national organization today and many of the state affiliates have impressive qualifications listed on their websites, but their economics credentials are typically not among them. A case can be made that people teach what they know, and if they know economics they have expertise to do economic education. If they do not know economics, it’s vastly more challenging to do economic education, irrespective of titles or organizational affiliations. Leaders without deep training in economics lack the filters for deciding whether to affiliate their organizations with partners (e.g., consumer education, the stock market, career education, personal finance education) offering benefits (e.g., high visibility, relatively easy funding) that can pull energy, focus, and resources away from economic education activities with certifiable impacts on economic literacy. State affiliates relying on center directors who lack economics credentials have even greater challenges in delivering economic literacy. In these situations, K–12 teachers must rely on “economic educators” unequipped with the deep knowledge to impart economic understanding. First generation leaders at the national and state levels for the most part lacked advanced credentials in economics, the second generation had them, and the current generation does not. Do the economics credentials of economic education leaders make a difference in the economic literacy of the teachers and students touched by economic education programs?

Another possible query to account for the level of economic illiteracy, growing out of the fourth above, is whether the benefits of partnerships forged between economic education and other educations were greater or less than the costs in foregone economic illiteracy. Partnering economic education with other educational initiatives (e.g., the stock market education, entrepreneurship education, career education, personal finance education) that have tangential connections with economics but lack its depth and breadth started with the Stock Market Game™, a partnership with the Securities Industry Association.12 Although a handful of anecdotal studies found that the game, like the other partnerships discussed below, contributed to understanding of selected concepts in economics at the moment the students were tested, no carefully controlled assessments of its contribution over time have been conducted to assess the half-life/sustainability of what was learned or its contribution to overall scores on tests of economic understanding.13

The same is true for the partnerships formed with the entrepreneurship education movement when it was the hot partnership, career education, the international economic education partnership I helped to create, or the current personal finance partnership.14 Although each offered the promise of opening up opportunities for enhancing economic literacy in parts of the school curriculum where it was typically omitted, they all arguably pulled attention/energy/resources away from the greater economic education mission and weakened rather than enhanced its ability to deliver on its potential. 

Advocates for such partnerships could have been required to demonstrate the impact of their work on economic literacy before the partnerships were forged, perhaps after pilot tests followed by tests of economic understanding had been administered, and perhaps six or twelve months later as well to assess the enduring benefits in economic literacy compared with the costs, but they were not. This was not done with stock market partners and consumer education partners when I was involved in economic education during its second generation, and I know of no evidence that it was done with more recent partnerships because of the expense of such assessments and the press of other claims on scarce resources. As a consequence, we don’t know whether any of the partnerships enhanced economic literacy, or, if they did, by how much relative to the others, and we need that information to guide policy regarding potential partnerships at the national and state levels going forward.

Sixth and finally, has the public squabbling among economists of different political persuasions weakened the credibility of claims to objective, nonpartisan academic economic education, and contributed to the nation’s economic illiteracy as an unintended consequence? Nobel laureate Paul Krugman uses his pulpit as principal economics commentator at the New York Times and Joseph Stiglitz uses his at Columbia University to represent ideas, some of them economic, in ways that sound contradictory to economists who publish in the Wall Street Journal such as Martin Feldstein of Harvard and John Taylor of Stanford, who reach contrary conclusions.

Underneath their differences, these economists share commitment to an extensive set of core understandings about how the economy works and scholarly tools for deepening that understanding. Their differences result from different sets of values in whose service they put their shared understanding of analytic tools from economics. Economic tools in the service of values favoring a more equitable distribution of income or the greater use of government actions to achieve political goals, for example, lead to very different conclusions from those provided by the same economic tools used in the service of values favoring economic growth and reliance upon private markets to achieve ends. That truth is hidden from many, squabbling among economists is not, and it’s easy to speculate that the result is public cynicism about the potential of economic education to illuminate anything. It’s worth investigating whether such squabbling affects the public’s assessment of economic education’s potential to illuminate lives.


A more rigorous study beyond the ambitions of this article is needed to determine whether the possible explanations for economic illiteracy in America discussed above have merit. Support for any of the speculations here would provide the beginnings of a possible blueprint for achieving the literacy to which economic education has long aspired. For now, despite the astonishing amount of work already done, arguably unique to economics, we must contend with a stark reality. Our citizens, for the most part, are economically illiterate despite the energy and commitment of the JCEE’s founders, despite the curricula developed and teaching materials produced and countless teacher training programs conducted over sixty-plus years, despite major research initiatives incentivized by two scholarly journals and opportunities to publish research findings in numerous other publications, and despite the dedicated service of three generations of economic education professionals and teachers. Given all of that, belief that a more positive outcome is achievable requires a leap of faith. The stakes, especially the ability of the nation to achieve its competing aspirations in the face of limited resources, are too high to succumb to despair that we are destined to remain an economically illiterate people. Let the needed inquiries begin.

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