Professional Documents
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Chapter 5 Education
Chapter 5 Education
CopyrightGruber
© 2010 Fourth
Worth Edition
Publishers
Copyright © 2012 Worth Publishers 1 of 33
Education 11
11.1 Why Should the Government Be Involved in
Education?
11.2 How Is the Government Involved in Education?
11.3 Evidence on Competition in Education Markets
11.4 Measuring the Returns to Education
11.5 The Role of the Government in Higher Education
11.6 Conclusion PREPARED BY
Dan Sacks
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11
Education
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Education
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11.1
Why Should the Government Be Involved in
Education?
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11.1
Why Should the Government Be Involved in
Education?
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11.1
Why Should the Government Be Involved in
Education?
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11.2
Free Public Education and Crowding Out
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11.2
Free Public Education and Crowding Out
Other goods
EF
spending
G2 C
A
G1
X
D
G3
Y
G4
Z
E1 EF E2 E3 B Education spending
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11.2
Solving the Crowd-Out Problem: Vouchers
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11.2
Solving the Crowd-Out Problem: Vouchers
Other goods
spending EF
G2 C
A
G1
X1
Y2
G5
Z2
G6
G3
Y1
G4
Z1
E1 EF E2 E4 E3 E5 B Education
EF spending
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11.2
Solving the Crowd-Out Problem: Vouchers
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11.2
Problems with Educational Vouchers
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11.2
Problems with Educational Vouchers
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11.2
Problems with Educational Vouchers
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11.3
EVIDENCE: Estimating the Effects of Voucher
Programs
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11.3
Experience with Public School Choice
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11.3
Experience with Public School Incentives
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11.3
Experience with Public School Incentives
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11.3
Bottom Line on Vouchers and School Choice
• Evidence is mixed…
• But generally suggests that vouchers improve
educational outcomes.
• They come at the cost of potentially increasing
inequality in educational achievement.
• Some sort of guarantee of access must be provided to
ensure all students have an education.
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11.4
Measuring the Returns to Education
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11.4
Effects of Education Levels on Productivity
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11.4
Effects of Education Levels on Productivity
• Policy implications
o Human capital: Government would want to
support education to raise their productivity.
o Screening: Education does not raise productivity,
so no reason to support it.
• Differentiating the theories
o Most of the returns to education reflect
accumulation of human capital.
o Some screening value to obtaining a high school or
higher education degree.
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11.4
EVIDENCE: Estimating the Return to Education
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11.4
Effect of Education Levels on Other Outcomes
Better-educated people…
• Participate more politically
• Perform fewer criminal acts
• Have better health and healthier children
• Have better-educated children
• Have more productive coworkers
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11.4
EVIDENCE: Estimating the Effects of School Quality
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11.4
EVIDENCE: Estimating the Effects of School Quality
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11.5
Government in Higher Education
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11.5
Current Government Role
• State provision
o The primary form of government financing of
higher education is direct provision of higher
education through locally and state-supported
colleges and universities.
• Pell Grants
o The Pell Grant program is a subsidy to higher
education administered by the federal government
that provides grants to low-income families to pay
for their educational expenditures.
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11.5
Loans
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11.5
Tax Relief
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11.5
What Is the Market Failure and How Should It Be
Addressed?
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11.6
Conclusion
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