New technology in schools: is there a payoff?

In recent years the role of investment in Information and Communication Technology (ICT) as an effective tool to raise educational standards has attracted growing attention from both policy makers and academic researchers. While the former tend to express enthusiastic claims about the use of new technologies in schools, the latter have raised concerns about the methodological validity of much of the research undertaken. The view that ICT could help to raise educational standards dates back to the Fifties, and builds on some of the original findings by the Harvard psychologist Skinner (1954, 1958). More recently, support for the effectiveness of ICT as a teaching and learning device comes from the educational literature. Yet results are generally inferred from simple correlations between ICT and pupil performance, without taking full account of other factors (such as school characteristics, resources and quality) that may be related to both ICT resources and pupil outcomes. These methodological short-comings cast serious doubt on the validity of most of the existing research which finds a positive relationship between computers (and/or computer software) and student outcomes. In contrast, the small number of economic studies that address these issues by applying more rigorous methods of analysis, report no evidence for a positive impact of ICT on pupil outcomes. In recent years, and in parallel with the widespread belief that new technologies account for much of the productivity resurgence in workplaces in the Nineties (see Jorgenson and Stiroh, 2000), the UK government has motivated its sizable ICT investment in schools by stressing the importance of ICT in raising educational standards and creating opportunities for every child. The positive rhetoric about ICT in the UK has been backed up by considerable government investment. Starting from 1997, the government has encouraged the widespread use of ICT for teaching and learning in schools: formal plans were set-up under the ‘National Grid for Learning’ in order to equip schools with ICT facilities and train teachers to make an effective use of ICT. Between 1998 and 2002, ICT expenditure in England almost doubled in secondary schools, and increased by over 300 percent in primary schools. In this paper, we ask whether this considerable increase in ICT investment has made any difference to educational standards. More specifically, we evaluate whether changes in ICT investment had any causal impact on changes in educational outcomes in English schools over the period from 1999 to 2003. To do this, we mainly rely on administrative data at the level of Local Education Authority. We also make use of detailed information contained in a survey about ICT use in English schools to help interpret our findings. To identify the causal impact of ICT use on pupil achievement, we exploit a policy change that occurred in 2001, using an Instrumental Variable (IV) approach. Specifically, we consider how a change in the rules governing ICT investment in different regions of England led to changes in ICT investment and subsequently changed educational outcomes. In our quasi-experimental setting, we identify the impact of ICT investment using the magnitude of the gain or loss experienced by different LEAs as a result of the change in the funding system. The results should be interpreted as the causal effect of ICT investment on educational outcomes for LEAs that were substantially affected by the change in the funding system over this particular time period (i.e. it is not the average effect of a change in ICT investment for the whole population of schools). Unlike previous economic studies, we find evidence for a positive causal impact of ICT investment on educational performance in primary schools. This is most evident in the teaching of English, where we also show evidence that there is high use of ICT for teaching purposes. We also observe a positive impact for Science, though not for Mathematics. Hence, in this context, there is evidence of a causal link between a substantial increase in ICT investment and a rise in educational standards.