Readin', Writin', and Interest Rates

Standardized tests. Ugh. Kids hate taking them almost as much as the rest of us dread reading the headlines that remind us how much our education system fails us.

We know plenty of 12th graders who can't name the third U.S. president or the chemical elements in carbon dioxide. But who knew we had a bunch of budding Alan Greenspans on our hands?

Last year, high school seniors took the first national assessment test in economics, and the Department of Education released the results today. It turns out that kids know an awful lot about the laws of supply and demand and the effect of rising interest rates on consumer spending habits.

The assessment tests determine if kids have a basic, proficient, or advanced level of knowledge of a particular subject based on their test scores.

An impressive 79 percent of kids performed at or above the basic level in economics, beating out every other subject matter in the most recent years for which data is available.

That compares to basic or better of 73 percent in reading, 66 percent in civics, 61 percent in math, 54 percent in science, and a measly 47 percent in U.S. history.

Not surprisingly, kids with college-educated parents had higher test scores, and students in large city schools underperformed other students.

Boys did better than girls, and the white and Asian/Pacific Islander kids scored higher than other ethnic groups.

The results are especially intriguing because economics was not always part of a typical high school curriculum. Between 1982 and 2005, the percentage of high school graduates who had taken an economics course jumped from 49 percent to 66 percent.

The test was not easy. Only 36 percent of students correctly answered that personal income tax is the largest source of tax revenue for the federal government.

Perhaps because they spend more time shopping at the mall than they do earning a paycheck, 31 percent thought the biggest source was sales tax.

But their sense of the global economic picture was impressive. When asked what would likely happen if there was a decrease in worldwide oil production, a full 63 percent of students correctly answered that economic growth in oil-importing countries would decrease.

The next national economics assessment test will be conducted in 2012, so we'll find out then if this was some anomalous period of pervasive business news making its way into high school conversation.

In the meantime, our 2006 graduates may not develop the next silicon chip or write the definitive Abraham Lincoln biography. But they will get out of college just in time to help solve the coming Social Security crisis.

by Megan Barnett