Can reducing inequality also stimulate economic growth? Some economists have suggested that better education would both help the poor and boost the total economy. In the first article in this series, Economic Impacts of Inequality, I described Arthur Okun’s metaphor of redistribution taking place with a “leaky bucket” in which some of the money taken from the rich is lost before it gets to the poor. If education could help the poor as well help the overall economy, then the leaky bucket would turn into a “widow’s cruse,” with more benefit to the poor than was taken from the rich.

The economists writing about inequality for Standard & Poor’s report cited research showing that education correlated with income and wealth—no surprise there.

Perhaps the movement to reduce inequality will lead to improvement in education for the poor, helping stimulate long-term growth in the economy. It’s possible, but don’t count on it, because  the education system may have increased inequality.

Some years back, two economists, Lee Hansen and Burton Weisbrod, published a study of higher education in California that found a net transfer to upper income families from  lower income families. High-income kids attended the expensive schools, such as Berkeley and UCLA. Lower-income children were less likely to attend college, and when they did attend, they went to a lower-cost junior college or state college. The researchers then compared education services received to taxes paid, and concluded that California’s higher education system worsened economic inequality.

In K-12 education, our public education system tends to perpetuate poverty.

A number of studies have found less effective teachers are more common in high-poverty schools. For example, earlier this year the StarTribune reported, “Six years after Minneapolis schools broke the iron grip of seniority in filling teaching positions, the disparity in teacher experience remains as wide as ever, with the least-experienced teachers still concentrated at the city’s high-poverty schools.”

A recent study by a liberal group found that the top teachers are rarely teaching poor and minority children.

In California, a judge overruled long-standing laws and union contracts, arguing that the practices had placed the worst teachers before the most vulnerable students: the poor, minorities and non-English-speaking children. The judge’s decision cites very strong evidence. For instance,

“Based on a 4 year study, Dr. Kane testified that students in [Los Angeles schools] who are taught by a teacher in the bottom 5% of competence lose 9.54 months of learning in a single year compared to students with average teachers.”

“Unfortunately, the most vulnerable students, those attending high-poverty, low-performing schools, are far more likely than their wealthier peers to attend schools having a disproportionate number of underqualified, inexperienced, out-of-field, and ineffective teachers and administrators. Because minority children disproportionately attend such schools, minority students bear the brunt of staffing inequalities.”

If we simply increase what we have been doing in education, the poor are unlikely to be the beneficiaries. There may be a way to have an improvement in education for the poor which would be helpful to the overall economy. That would require changes likely to be opposed by teachers unions. Further, if we make a concerted effort to place the best teachers in the schools teaching the poorest students, will middle class parents raise an uproar over the teachers left for their children?

Furthermore, it’s easy to say that children from low-income families do worse in school. It’s harder to say that if those same families had more money, the kids would do better. Success in school is about behaviors, such as taking learning seriously, delaying gratification, and following rules. Knowledge also comes from parents. For example, low-income children hear far fewer words per day than do middle-class children. Giving money to the poor kid’s parents may not change that. Giving more money to the children’s teachers may not change that.

The business leader wondering about the future should not bet on economic games from this effort to reduce inequality.