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Integrating the Economic Way of Thinking into US History Courses

  • M. Scott Niederjohn
  • Colin O’Reilly
Chapter
  • 240 Downloads

Abstract

Can the economic way of thinking be integrated into high school and middle school US history courses? We introduce an instrument, the Test of Economic Thinking, to assess student’s ability to apply the economic way of thinking. In a pilot study involving 120 high school and middle school students across three states, we implement the Test of Economic Thinking to assess the effectiveness of integrating economic concepts into US history courses using the supplemental Economic Episodes in American History textbook. The results indicate that the supplemental textbook improves student’s ability to apply economic concepts. The pilot study suggests that integrating the economic way of thinking into high school US history can be fruitful and that the Economic Episodes in American History text can be a useful tool to facilitate the integration.

14.1 Introduction

History matters. It matters not only because we can learn from the past, but because the present and the future are connected to the past by the continuity of a society’s institutions (North 1990, p. vii).

Douglass North understood that history matters. In the research that led him to a Nobel Prize in economics, he showed how we learn from our economic past. The institutions that support liberal democracy and economic prosperity are shaped by the historical context (Acemoglu and Robinson 2012). History matters because it enriches the lives of the people who study it.

Yet, as important as history is, complaints about its teaching abound. Students complain that history is merely an exercise in trivial pursuit. Professors complain that their students are historically inept. High school and middle school teachers say much the same thing: blame all around. The dismal statistics reported by the National Assessment of Educational Progress regarding young people’s historical knowledge provides empirical evidence that we have plenty of room for improvement (National Center for Education Statistics 2010).

This chapter focuses on three aspects of economics education. First, we examine how the economic way of thinking can be taught in high school and middle school American history courses. As a universal high school graduation requirement American history courses are an opportunity to infuse the economic way of thinking into the curriculum. Second, an assessment instrument designed to test economic thinking skills is introduced and released to other researchers. Finally, we report on a pilot study using the new instrument to measure the effectiveness of a supplemental text on economics in American history. The pilot study finds that the Economic Episodes in American History (EEAH) textbook increases understanding of the economic way of thinking among middle school and high school students.

14.2 Economics: The Missing Link

A complete understanding of history requires a careful integration of key concepts and ideas from several of the social sciences. Several national education organizations emphasize the integration of social sciences into teaching history at the pre-college level. For example, the National Council for History Education (1997) states:

… History is indispensable to an ordered view of the natural sciences, the social sciences, and the humanities. In this sense history is the generative subject, through which students gain understanding of, and respect for, human accomplishments in all fields of endeavor.

They go on to explain that geography and history are “constant companions.” Studying one without the other is nearly impossible. How can one meaningfully study European settlement of North America without reference to the basic tools of geography? History and civics are similarly linked. Imagine trying to teach a government course without reference to the historical context surrounding the writing of the Declaration of Independence and the Constitution. Similar points can be made for military, diplomatic, and religious history.

Similarly, Expectations of Excellence: Curriculum Standards for Social Studies, released by the National Council for the Social Studies (1994), stresses the importance of integrating the key social studies disciplines. Evidence suggest that integrating economics into US history courses can be fruitful (Schug and Niederjohn 2008). The NCSS urges educators to use its standards in both integrated and single discipline configurations—a task requiring teachers to have solid subject matter knowledge and the appropriate instructional tools.

Where is economics in all this? Most often, it is the missing link. The connection between history and economics is rarely made, but it is nonetheless fundamental. The year 1776, for example, produced not one but two documents of historical importance to the new nation. One, of course, was the Declaration of Independence. The other was Adam Smith’s (1776) Wealth of Nations. The founders had read Smith (Fleischacker 2002). Thomas Jefferson had a copy in his library and considered it the best work of its kind. The ideas of Smith were subsequently imbedded into key parts of the Constitution. As a result, the Constitution established a framework for the efficient conduct of economic affairs. It defined the protection of private property and specified that contracts would be enforced in even-handed fashions; it stipulated rules for bankruptcy, an important element since bankruptcy implies a failure to fulfill contracts. In short, the Constitution created a system of well specified property rights, which aligned incentives, reduced uncertainty, and permitted the development of free markets—essential, in Adam Smith’s view, for a productive and prosperous economy. Unfortunately, such economic insights are often completely overlooked in traditional textbooks.

14.3 Integrating Economics Can Strengthen Historical Understanding

Integrating economics into history can help learning in two ways: First, understanding historical events requires the application of basic economic concepts. For example, it is impossible to understand the economic success of the American colonies without a grasp of the institutions inherited from the British such as rule of law, protection of private property rights, and openness to trade. Or, consider the Great Depression, a cataclysmic event in US history. Despite its importance, our textbooks are woefully out of date in the treatment of this topic. They continue to portray the stock market crash of 1929 as major cause of the Great Depression, a view is widely dismissed by economic historians (White 1990). To understand the causes of the Great Depression requires a basic knowledge of monetary policy, fiscal policy, and the importance of international trade.

Second, economics can provide students with a way to prioritize historical content to help them better understand human actions. History often presents students with a confusing array of people, facts, events, locations, and dates. Yet, not all of this information is equally valuable in problem solving. The economic way of thinking provides analytical tools to prioritize the information. It encourages students to focus their attention sharply on the choices individuals made, the costs involved, and the incentives in play. The economic way of thinking takes history beyond the examination of scattered facts and dates and toward a way of thinking critically about people’s choices. This is especially important when people’s choices seem unexpected or are easily dismissed as being irrational or perhaps involving no choice at all. History viewed through the lens of economic logic is an examination of the choices individuals make and why they make them. The economic perspective also helps students better understand how institutions are shaped by individual choices and, in turn, how these institutions themselves provide incentives that influence people’s choices and incentives.

The Voluntary National Content Standards in Economics of the Council on Economic Education states: “Institutions evolve and are created to help individuals and groups accomplish their goals (Council for Economic Education 2010, p. iii).” The standard names banks, labor unions, corporations, and legal systems as examples of important economic institutions. The standard also places emphasis on clearly defined and well enforced property rights as essential to a market economy. A focus on the incentives that institutions create is fundamental to getting the economics right in American history (Council for Economic Education 2010).

How might the emphasis on choices, costs, and incentives reveal a deeper understanding of people’s behavior in the past? Indentured servitude provides a good example. Indentured servitude is often presented as an institution only slightly better than slavery. In fact, the treatment of indentured servitude in US history textbooks is often placed nearby the early description of slavery—implying that they were similar institutions. A careful application of economic principles such as choice and incentives reveals a different picture. The theoretical tools of economics allow students to sift through the same basic set of facts but to arrive at a different destination.

Indentured servants signed contracts that had the force of law. Their provisions were enforced by the courts. Unlike slavery, this meant that both sides had rights. Both sides—masters and servants—were obliged to fulfill the terms of the contract.

Passage across the Atlantic was expensive. For some individuals who faced tough economic circumstances in England, for example, signing an indenture appeared to be their best choice. A new sort of labor market arose. The market, while far from perfect, by and large allowed the parties involved to accomplish their goals. On the one hand, colonial farmers, artisans, and other business people had high demand for people to work. The colonies always faced labor shortages. On the other hand, many people in England—those willing to take serious risks—were willing to sign indentures in the anticipation of obtaining new economic opportunities in North America.

Much to the dismay of the Spanish and the French, indentured servitude provided the impetus for the widespread settlement of people from Britain in North America. It helps explain how market institutions—and the prosperity they produce—were established in North America and not in South America. And, as quickly as indentured servitude arose, it faded away. Parliament passed no law to eliminate the system. Instead, the incentives changed once again. As the cost of passage across the Atlantic became less expensive, people wishing to come to North America made different choices. Why sign a labor contract when you can save up some money and purchase a ticket?

14.4 A Pilot Study: Economic Episodes in American History and the Test of Economic Thinking

Economic Episodes in American History (EEAH) is a textbook supplement designed to provide teachers of US history with a simple tool to sharpen students’ historical understanding through the integration of basic economic principles into existing US history courses (Schug and Wood 2011). It includes a broad collection of vignettes from every major period in US history featuring content where economic principles are most relevant. Most importantly, it explicitly teaches the economic way of thinking with a consistent emphasis on importance of individual choices, costs, incentives, institutions, and trade.

A grant was obtained from a national foundation to sponsor workshops for teachers designed to instruct them on how to use the EEAH book within their existing US history courses. The grant provided funding for full day workshops for fifty teachers on EEAH during the summer of 2017. Teachers that attended the workshop received a small stipend and a classroom set of EEAH texts. Further, teachers were introduced to a new assessment instrument called the Test of Economic Thinking (TET) and further stipends were offered to those teachers willing to pre- and post-test their students using this instrument before and after teaching a set of EEAH lessons.

The Test of Economic Thinking is intended to measure how well students are able to apply a problem-solving approach called the “economic way of thinking.” This is a system of logical thinking that is based on key assumptions deeply rooted in traditional economic analysis. The economic way of thinking involves the application of one or more well established principles which include, but are not limited to, the following: choices and scarcity, costs, incentives, economic systems, voluntary trade, and primary and secondary effects. The Test of Economic Thinking is designed primarily for high school students and deliberately focuses on only these six principles of economic thinking. Thus, many important principles have been excluded.

The Test of Economic Thinking consists of thirteen situations for students to consider. Students read each situation and then circle the letter of the answer that best reflects the principles of economic thinking. Students are then asked to indicate the top two economic principles that are the most appropriate to apply to the situation under discussion. Using this approach, the Test of Economic Thinking measures two types of thinking skills:
  1. 1.

    the respondent’s ability to recognize the best economic explanation underlying a situation and

     
  2. 2.

    the respondent’s ability to predict the outcome of an economic situation.

     

Each skill is tested in each of the thirteen scenarios making the maximum score on the test twenty-six points. The body of the test and scoring rubric are included as an Appendix.

14.5 Evaluating the Test of Economic Thinking

We assess the efficacy of the supplemental Economic Episodes in American History textbook at increasing understanding of basic economic concepts among high school and middle students. Instructors were recruited from three different schools in three different states to participate in the experimental pilot study. Consent from the parents or guardians of the students was obtained for 130 participants and the study received approval from the Creighton University Institutional Review Board.

Data were obtained from two sources. The results from the Test of Economic Thinking were used to measure student understanding of economic concepts and a multiple-choice survey of participants provided a limited set of additional descriptive statistics about the student participants. Full demographic information was not collected to ensure anonymity of participants, all of whom were minors. Ten students that completed consent forms did not complete some other aspect of the study. Participants with incomplete information were not included in the analysis which reduced the sample to 120 participants.

Student performance on the Test of Economic Thinking was measured prior to a semester of instruction supplemented by the EEAH text to establish a baseline level of student understanding. For each of the three instructors at least one section of US history or social studies was designated to receive instruction supplemented by EEAH, the treatment group, and at least one section was designated to serve as a control group. The control sections received traditional instruction. After a year or semester of instruction, students in both the treatment group as well as those in the control group completed the Test of Economic Thinking again.

Many studies assessing the efficacy of a particular teaching method on improving economic reasoning use a study design that involves a group of students that receive treatment and a group that does not (Yamarik 2007; Emerson et al. 2015). However, if assignment to the treatment group is not random, simply comparing the mean score between the treatment and control group will yield biased results. Factors that affect test performance or learning outcomes may be correlated with assignment to the treatment group (Haughton and Kelly 2015). For example, the course section receiving the treatment may happen to contain a disproportionate number of the honors students or be scheduled at a time of day in which students are more focused. To overcome the potential bias, we follow Dickie (2006), among others, by implementing a pre-test-post-test control-group design, also known as a difference-in-difference study design.

The so-called difference-in-difference study design captures variation in student performance along two dimensions. First, we measure performance based on assignment to a treatment or control group. Second, we measure variation over time, with test scores at the start and end of the semester. The difference-in-difference study design allows for the identification of the causal effect of treatment (Angrist and Pischke 2009).

The field experiment yielded pre- and post-test scores for 120 participants that completed the study across ten class sections. The five treatment sections contained 65 students and the five control sections contained 55 students. The largest section included 19 students participating in the study and the smallest had only 4 students participating. See Table 14.1 for the average pre- and post-test scores, the standard deviation of test scores, and the number of students by section. Treatment sections are indicated with an asterisk.
Table 14.1

Descriptive statistics

 

Average test score

Standard deviation

Number of students

Section 1

Pre-test

24%

10%

18

Post-test

23%

10%

 

Section 2

Pre-test

18%

9%

12

Post-test

22%

10%

 

Section 3*

Pre-test

24%

9%

19

Post-test

29%

12%

 

Section 4*

Pre-test

32%

14%

10

Post-test

39%

12%

 

Section 5*

Pre-test

29%

9%

18

Post-test

35%

9%

 

Section 6

Pre-test

22%

6%

9

Post-test

29%

13%

 

Section 7*

Pre-test

28%

8%

10

Post-test

32%

14%

 

Section 8

Pre-test

23%

7%

12

Post-test

27%

9%

 

Section 9

Pre-test

19%

4%

4

Post-test

38%

20%

 

Section 10*

Pre-test

20%

9%

8

Post-test

53%

9%

 

Treatment sections are indicated with an asterisk

14.6 Empirical Results

The average post-test score for students in the control sections was 26% and the average score in treatment sections was 36%. However, the treatment group also outperformed the control group by five percentage points on the Test of Economic Thinking prior to treatment, an indication that assignment into the treatment and control sections is most likely not random. Therefore, the large gap between the post-test scores of students that received treatment those that did not cannot be interpreted as causal.

The causal effect of treatment is identified through the difference-in-difference study design as visualized in Fig. 14.1. The difference between the pre-test score and the post-test score constitutes the first difference, which can be calculated for both the group of students that received treatment and for those that did not receive treatment. The second difference is calculated as the difference between the change in scores for the control group and the change in scores for the treatment group. Therefore, the effect of using the textbook is the difference in the size of the gap between the first two columns and the gap between the third and fourth columns in Fig. 14.1.
Fig. 14.1

Causal effect of Economic Episodes of American History of economic thinking

The difference between pre- and post-test scores for the control group is four percentage points and the difference between pre- and post-test scores for the treatment group is nine percentage points. As stated before, the causal effect of treatment is the difference between the change in scores of these two groups, in this case five percentage points. Therefore, the effect of treatment by using the EEAH text is to increase scores on the Test of Economic Thinking by five percentage points. But is an improvement of five percentage points large? The standard deviation of test scores is 12 percentage points; therefore, treatment increases performance on the Test of Economic Thinking by almost half of a standard deviation.

To assess the statistical significance and robustness of these findings we conduct difference-in-difference regression analysis as described by Eq. 14.1. The test score, Scoreit, of student i in period t is estimated by Postit, a variable indicating if the score corresponds to a pre-test or a post-test and by Treatit, a variable that indicates if the student was assigned to receive treatment during the study. The variable of interest is an interaction term between the post-test indicator and the treatment indicator, Post ∗ Treatit, which obtains a value of one for observations that correspond to post-test scores for students that received instruction using EEAH text. To control for teacher and school effects that do not change over time we include a teacher fixed effects, μi. Some specifications include additional control variables that are included in Xit. The estimate of β3 is therefore the effect size of treatment as shown in Fig. 14.1.
$$\displaystyle \begin{aligned} Score_{it} = \beta_0 +\beta_1 Post_t + \beta_2 Treat_i + \beta_3 Post*Treat_{it}+ \gamma X_{it}+\mu_i+\epsilon_{it} \end{aligned} $$
(14.1)
The baseline results of the difference-in-difference regression are presented in the first column of Table 14.2. The coefficient on the variable of interest, the post-test-treatment indicator variable, is positive but is not statistically significant. However, once we account for teacher specific effects in Column 2, the effect of treatment is statistically significant at the 10% level. The teacher fixed effects that account for unobserved differences in teacher quality, school quality, and other omitted school level factors have a significant effect on tests scores and improve the fit of the model. The R-squared increases from 0.18 to 0.23 after their inclusion. In Column 2, the estimate of β3 is 0.046, an indication that treatment using the supplemental text tends to increase scores on the Test of Economic Thinking by 4.6 percentage points.
Table 14.2

Effect of the EEAH text on the test economic thinking

Variables

(1)

(2)

(3)

(4)

 

No fixed effect

Fixed effect

FE and controls

FE and controls

Post-test

0.042**

0.042**

0.042**

0.029

 

(0.019)

(0.019)

(0.019)

(0.018)

Treatment

0.053***

0.040**

0.042**

0.039**

 

(0.017)

(0.017)

(0.018)

(0.018)

Post*treatment

0.046

0.046*

0.046*

0.055**

 

(0.028)

(0.027)

(0.027)

(0.027)

Mother’s education

  

0.039**

0.038**

   

(0.016)

(0.016)

Sports

  

− 0.049***

− 0.050***

   

(0.017)

(0.017)

Job

   

− 0.00

    

(0.020)

College

   

0.011

    

(0.021)

Constant

0.217***

0.194***

0.195***

0.192***

 

(0.011)

(0.014)

(0.020)

(0.023)

Teacher FE

 

X

X

X

Observations

240

240

238

232

R-squared

0.1843

0.233

0.271

0.2741

* indicates 10% level of significance;

** indicates 5% level of significance;

*** indicates 1% level of significance

Additional control variables are added in the subsequent columns of Table 14.2. As a measure of parent’s education, we include a variable that indicates if the student’s mother has completed high school. The effect is statistically significant, indicating that students with mothers that completed high school have, on average, higher test scores. As a measure of extracurricular involvement, we include a variable equal to one if the student participates in sports during the school year. Participating in sports has a negative and statistically significant effect on test scores. The negative effect may be due to students allocating less time to studying while playing sports or may indicate that students involved in sports are generally less academically inclined. More importantly, the inclusion of these control variables does not alter the estimated treatment effect.

The final two control variables are included in Column 4. One is an indicator for whether the student self-reports a plan to attend college and the other indicates whether a student is working a job during the school year; neither of these controls are statistically significant. The inclusion of these two controls reduces the sample size to 116 students due to missing data. The loss of these four observations modestly increases the effect size which increases the statistical significance of the treatment effect; however, this is an artifact of the arbitrary loss of four observations.

14.7 Conclusion

Ten sections of US history and social studies consisting of a total 120 students participated in a study of the effectiveness of a supplemental textbook. The supplemental economics textbook, Economic Episodes in American History (Schug and Wood 2011), infuses the economic way of thinking into vignettes about US history with the goal of improving student’s ability to apply the economic way of thinking.

The pilot study assesses student’s ability to apply the economic way of thinking based on their performance on the Test of Economic Thinking, an instrument introduced in the present study. The test was administered at the beginning of the semester and at the end of the semester to assess performance over time. Further, some class sections received treatment in the form of instruction using the supplemental textbook, while others did not. Through this difference-in-difference study design, we identify a positive and marginally statistically significant effect of treatment using the Economic Episodes in American History textbook on test scores. The results indicate that the textbook increases student’s ability to apply the economic way of thinking to various scenarios. Specifically, treatment improved scores on the Test of Economic Thinking by about five percentage points. The positive effect is robust to the inclusion of a limited set of control variables.

The results of the pilot study provide modest evidence that the Economic Episodes in American History textbook can help to infuse the economic way of thinking into high school and middle school US history courses. However, some caveats must be noted. The pilot study was conducted on a modest sample of 120 students. Further research on a larger sample is needed to draw more general conclusions and to increase confidence in the results found in this pilot study. In addition, the main effect identified here is only statistically significant at the 10% level. Studies with a larger sample may be able to identify more precise estimates of the effects described in this study.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • M. Scott Niederjohn
    • 1
  • Colin O’Reilly
    • 2
  1. 1.Lakeland UniversityPlymouthUSA
  2. 2.Creighton UniversityOmahaUSA

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