“Quality Education” in North America
Adam MacRae 
May 10, 2022
Adam MacRae
May 10, 2022 For the fourth instalment of Holocene’s Global Goals Briefings, we look at “Quality Education” in North America and the provision of free primary and secondary education. More specifically, the two main indicators for the goal are a minimum proficiency in reading and mathematics, as well as the completion of schooling.
On a global level, around 90% of children attend primary school, with 80% of those who attend going on to complete it. This is a remarkable accomplishment, especially as the rate increased by 40% over the past two decades. However, much work needs to be done as the rate of attendance drops to 75% in poorer homes and the progress in the rate of attendance has stalled in recent years leading to serious reductions in educational outcomes across the globe.
The origin of what we call ‘universal education’ dates back to the early 1700s in Prussia when Frederick William established a universal primary education system. Prior to this most of the education that was offered was left to the domain of religious institutions such as the Catholic or Protestant Churches. From these modest origins, the idea took off first in the rest of Europe and then across the world. Today, over 150 countries now have legal obligations to provide at least 9 years of compulsory education.
As highlighted above, the rise of universal education has been an overwhelming success. Unfortunately with the pandemic, many of the gains made in recent years were wiped out in terms of both attendance and outcomes.
By mid-April 2020, UNESCO estimated that 1.6 billion children (94% of all students) were no longer being taught in a physical classroom. While lockdown severities differed in each country, in North America as a whole it could be described as ‘partially open’. Due to state-level discretion in the US, combined with the disparities between high and low income countries, remote learning was the de-facto method for millions of students. For those less well off, students were hit especially hard as their lockdowns were more severe, long-lasting, and less equipped for remote learning than their richer counterparts.
When examining education, there are 3 equal considerations to take note of: attendance, outcomes, and funding.
Attendance can be divided into ‘how much’ and ‘where from’. Concerning how much, we are referring to the headline numbers of absolute attendance. Complementing the attendance rates mentioned above is the rate of completion of secondary schooling which varies widely in North America: the US enjoys a rate of 92%, whereas in Haiti only one third of people complete secondary school.
For many students, attending school (particularly in-person) leads to many other benefits that are not specifically related to educational outcomes. For example, in the US around 26 million children – nearly half of all students – qualify for either free or reduced-price lunches. When these students are not able to attend in person, they could potentially miss out on the one nutritional (or substantive) meal of the day.
The ‘where from’ is more nuanced and refers to whether the child is attending school in-person or remotely and where some of the biggest divergences are visible. As one would suspect, the most important factor in a student’s ability to attend class remotely is via Internet access, a factor which changes wildly across and within countries as highlighted in Figure 1. Across countries, Bermuda and Aruba lead the way with rates in the high 90s, while Nicaragua has a rate of less than 30. Within countries, inequalities persist as well. Using the US as an example, there are 7 million school-age children who cannot access the Internet at home and are currently being left behind.
For the purposes of this briefing, the primary outcome of quality education is basic literacy and numerical skills. While global youth literacy rates have progressively increased over the years from 86.5% in 2000 to 92% in 2020, there is still more work to be done in North America. Furthermore, the pandemic has had a terrible impact on learning outcomes in rich and poor countries alike. Even in richer countries, teachers reported that students were on average two months behind where they ought to be.
While impossible to fully calculate, some researchers estimate that these learning losses could lead to a reduction in $10 trillion in lost lifetime earnings. Reversing these learning losses across North America and the world will be necessary for any hope of achieving the Global Goal of Quality education.
On a more personal level, the past few years have had serious outcomes for children. Many studies have shown overwhelming evidence that we are heading towards a youth mental health crisis due to stress and the isolation of online learning. This will have to be addressed in the years to come.
The primary source of funding is through government spending, though this varies widely as illustrated in Figure 2. While many people point to the role of international aid and development, it does not in fact represent a significant amount.
UNESCO data tells us that while government spending across the world has increased in recent years, there are certain unequal trends. The first is that due to Covid, government spending for education has been reduced more significantly in poorer countries than in richer countries. The second is that higher income countries bear a greater financial burden for tertiary education while people living in poorer countries have to contribute more to primary education. A final point is the GDPs of the countries in question. Despite similar rates of investment, the poorest countries pay around $48 a year for each student while rich countries spend nearly $8,500. Unfortunately, in order to close the gap in learning outcomes this leads to, it is estimated that lower and middle-income countries will have to increase their rates of investment from an average of 3.5% to 6.3% in order to support the global goal.
Given the changing nature of education throughout the pandemic, there are two main areas of focus investors and policymakers are prioritising to address learning outcomes across the world. The first is improving remote education and the second is investments in helping students ‘catch up’ in-person. In the VC world, this niche of the market is called ‘Ed Tech’, short for Education Technology and includes everything from remote tutors, educational platforms, and supporting technologies. As a sector it has attracted significant interest in recent years with VC funding doubling from $7 billion in 2019 to $16 billion in 2020. Below are some of the companies in North America doing great work in the Ed Tech space.
In our research at HIC, we identified three interesting companies based in the North America looking to address quality education.
Based in San Francisco, Outschool raised $240.2M in Series D funding to support its growth as a marketplace of live online classes for kids that connects students, parents, and teachers together.
Headquartered in Ontario, Canada, Prodigy has raised over $125M for its game-based learning solution. Children in grades 1-6 can play games created by their teachers to learn mathematics while having fun.
Also headquartered in Canada, this company out of Montreal has raised over $390M and created an educational support system that provides personalised tutoring accessible to every student tailored to the requirements of their state curriculums.
These three companies are just a sample of the great work happening in this space and we at HIC will be keeping an eye on this in the months to come.