It’s an old debate in education: what skills should we be teaching students? In some circles, it’s not a debate at all; President Obama has perennially championed science, technology, engineering and math (STEM) as key fields for the economic success and competitiveness of the economy. This, too, is an old faith, one that dates to the Sputnik anxieties of the Cold War.

The tech industry, of course, is a huge booster of STEM education efforts. By their account, the nation suffers from a dire drought of technical workers, and in addition to training more at home, we should also lift the caps on importing engineers from China and India. A Brookings report from July found that openings for STEM jobs indeed seem harder to fill. The postings stay up for longer, especially those that call for specialized programming knowledge.

Since there appears to be a shortage of tech workers, what sort of market failures or policies are to blame? And how can we go about fixing them?

These days, for instance, it’s recognized that lack of opportunity holds back many students who might thrive in STEM occupations. The Obama administration has pledged to recruit more low-income students into STEM fields, which would also help them gain access to the middle class.

For some illumination, it’s helpful to look at how other countries have responded to the pressure to techify their workforces. A new study from Stanford looks at what happened in Italy, when a 1961 law doubled the number of students in STEM majors graduating from the country’s universities.

Italy’s big push on STEM

In postwar Italy, the obstacles were — quite literally — a set of fascist rules left over from the Mussolini regime. At age 14, students enrolled in specialized high schools. Only those in college-prep programs had full access to college; students in technical or vocational schools were limited to specific, non-science majors. A 1961 reform law loosened some of these restrictions, and for the first time, students from technical high schools could go to college for a degree in fields like math, physics and engineering.

To study the consequences, Nicola Bianchi, an economics PhD student, collected transcripts from public high schools and universities in Milan between 1958 and 1968. (At the time, students who went to high school in Milan overwhelmingly chose to stay in Milan if they wanted to attend college, so Bianchi got a full portrait of their academic lives.) Bianchi then used tax data from 2005 to see what these same students were earning at the height of their careers.

The first surprise: College seemed to provide no financial benefit to the students from the technical schools, who typically came from less-educated families. These charts show what happened (Bianchi calls people from technical high schools “Type B” students):


After they were granted the opportunity to major in STEM fields, students from the technical high schools signed up for university courses in droves. It used to be that about 8.2 percent of them finished college. The lifted restrictions caused that rate to nearly triple.

Yet, 40-some years later, these students from technical high schools weren’t earning more than their counterparts from before the reform. Many more had gotten degrees, but the degrees were worthless.

Italy’s overcrowded schools

The traditional economic explanation for this invokes notions of supply and demand. More STEM students means more competition for the same jobs, and therefore lower wages. Increase the supply, and the price of labor falls.

Indeed, the college-prep students seemed to suffer under the reform. Bianchi compared those who went to college before and after the influx of students from the technical schools.  In cohorts before the reform, college-prep students in STEM majors made 28 percent more than college-prep students in non-STEM majors. That premium shrunk by half in cohorts after the reform.

Bianchi could have left the analysis there, but he had suspicions that the situation was more complex. The policy had caught Italian colleges somewhat off-guard, and they were unprepared for the stampede of new students. Class sizes ballooned, and students in more crowded classes suffered, whether they came from college-prep or technical high schools. The technical students had also never been taught physics or advanced math, and their presence in the classroom caused the college-prep students to score worse in those kinds of subjects. Because he had access to everybody’s grades and test records, Bianchi was able to tease out all of these different effects.

By Bianchi’s calculations, it’s possible that up to 68 percent of the drop in STEM wages for these students can be blamed on the crowding and confusion causing them to learn less in college; the rest on increased competition between job seekers.

It was an odd episode in Italian history, so Bianchi doesn’t want to claim there are specific lessons for labor policy in the United States in 2014. But the paper illustrates a couple of important principles.

Some argue that the tech worker shortage is an illusion, and that if tech employers really wanted to attract more job applicants, they should raise their wages — or else take responsibility for training their own workers. Why make the government pay for workers to learn the skills that you need?

Inequality may be one good reason. In the United States, there are no fascist rules keeping kids from STEM careers, but there is underrepresentation of women, minorities, and people from low-income backgrounds. Obama has pledged to add 100,000 STEM teachers in the next decade, which should help encourage and prepare students for high-tech careers. His 2015 budget has over $300 million in funding to improve science and math education at needy schools. There’s another $150 million in programs aimed at black, Latino, and low-income students. (Overall, Brookings estimates that the federal government spends $4.3 billion to educate and expand the STEM workforce.)

Investing in educational capacity is not a bad place to start. Italy’s experience is in part a cautionary tale about an underfunded mandate. It is also a story about being careful about what you wish for. A huge increase in the number of STEM graduates sounds great, but the workers themselves didn’t seem to benefit that much financially. It’s anyone’s guess what the optimal number of science and technology workers is in an economy, but industry will always lobby for more job candidates who will compete with each other and drive down wages.

Besides, as Danielle Kurtzleben of Vox argues, STEM is a category so broad as to be meaningless. Do we need more biologists, or do we need more database technicians? The Italian experiment shows that it’s possible to be a little overenthusiastic shilling for STEM careers. It’s worth thinking about what, exactly, we want students to be learning.