In this chapter, the following content will be discussed: The rationales for government involvement in education are that education generates positive externalities and it should be provided to all (commodity egalitarianism); public education does not necessarily lead to more consumption of it; evidence on whether more spending on public education improves quality or earnings is mixed;. | EDUCATION Chapter 7 Further Questions about Government Intervention in . Education System If education produces positive externalities, then it should be subsidized. However. Should public education be free and compulsory as it is in the Should government produce public education? Does free public education necessarily lead to an increase in its consumption? See next slides 7- Real Annual Expenditure Per Pupil in Public Elementary and Secondary Schools Source: US Bureau of the Census [2012, p. 8] Expenditure Per Pupil School Year (2010 dollars) 1980 $5,016 1985 6,057 1990 7,102 1995 7,322 2000 8,068 2005 8,998 2010 9,100 7- Justifying Government Intervention in Education Is Education a Public Good? Does Education Generate Positive Externalities? The Conventional Wisdom The Case Against the Conventional Wisdom The Case of Higher Education Is the Education Market Inequitable? Commodity Egalitarianism (certain goods should be available to everyone) The . | EDUCATION Chapter 7 Further Questions about Government Intervention in . Education System If education produces positive externalities, then it should be subsidized. However. Should public education be free and compulsory as it is in the Should government produce public education? Does free public education necessarily lead to an increase in its consumption? See next slides 7- Real Annual Expenditure Per Pupil in Public Elementary and Secondary Schools Source: US Bureau of the Census [2012, p. 8] Expenditure Per Pupil School Year (2010 dollars) 1980 $5,016 1985 6,057 1990 7,102 1995 7,322 2000 8,068 2005 8,998 2010 9,100 7- Justifying Government Intervention in Education Is Education a Public Good? Does Education Generate Positive Externalities? The Conventional Wisdom The Case Against the Conventional Wisdom The Case of Higher Education Is the Education Market Inequitable? Commodity Egalitarianism (certain goods should be available to everyone) The Case of Higher Education 7- Does Government Intervention Crowd Out Private Education? Quantity of Education Quantity of all other goods A B i e0 ep ii x Private School quantity of education Co 7- Public schooling “crowds out” education Does Government Intervention Crowd Out Private Education? Quantity of Education Quantity of all other goods A B i e0 ep ii x Public schooling increases quantity of education 7- Co Callout enters after click and pauses 2 seconds at e0, ep and x Does Government Intervention Crowd Out Private Education? Quantity of Education Quantity of all other goods A B i e0 ep ii x Public schooling does not increase quantity of education 7- Co Does Government Spending Improve Educational Outcomes? Country comparison of educational spending (next slide) . spends more per pupil than almost all other developed nations Empirical Evidence: Does Spending on Education Improve Student Test Scores? 7- Real Annual Expenditures on Private
