State funding education

Before we can confront the subject of the state's role in education, we first ought to address the proper role and justification for government intervention in market activities in general.

It is important to note that simply identifying that private net benefit differs from social net benefit does not automatically justify government intervention.The imperfections of market solutions to public goods problems must be weighed against the imperfections of government solutions. Governments rely on bureaucracy and have weak incentives to serve consumers. Therefore, they produce inefficiently.

not only should government not increase its spending on higher education, but also that the case for subsidizing it at all is very weak.


(1)the crucial assumption that there is a direct, causal relationship between "educational attainment" and income is contrary to readily observed facts.

(2)many people with college degrees work at jobs that call for scant academic preparation, jobs in which they earn little or no premium on their "investment."

The conventional wisdom holds that students who go through college learn a lot that makes them more valuable as workers, but today's college experience often fails to do that.

Now we can see one reason why the income differential between college graduates and non-graduates is so misleading. That statistic includes many people who earned their degrees decades ago, before the erosion of standards.Looking at such statistics does not tell us anything about the probable results of putting a marginal student through college today. Politicians' expectation that simply processing a student through college will automatically bring about a great increase in his human capital and lead to a dramatic boost in his earnings is mistaken.


What does it mean to say that a job "requires" a college degree? It would be natural to think that the work is so demanding that only someone with the training available in a college could perform it. Rarely is that the case.
The degree "requirement" often has nothing to do with any particular knowledge or skills. Rather, the employer is using college credentials as a screening mechanism in lieu of more-direct means of assessing a job applicant's capabilities.Consequently, increasing the number of college graduates is apt only to ratchet up credential inflation.It is evident that the U.S. has already oversold higher education.


To think that college-caliber students should be given zero tuition is to think that smart people should be given wealth at the expense of the less smart.Bear in mind that an end to government subsidization of higher education would not end subsidies. Voluntary subsidies are far more likely to encourage serious academic work than is governments' current policy of automatically subsidizing nearly anyone who feels like going to college.