Short Discussion Post


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At the outset of this course we looked at the costs of attending higher education. During the last forty years the sticker price at public and private colleges has risen dramatically and the net price (tuition after institutional and government aid) has also risen by a lot, though a bit less fast. Overall enrollment in higher education has not suffered, however, perhaps suggesting that the expected benefits must be exceeding the costs for many students. We know from the past few classes that at least for the last several decades in the United States there is a large monetary payoff to schooling in the form of higher earnings. Although that rate of return might be increasing a bit less fast recently (or maybe even has stagnated) it remains high (at least an 8-10% “rate of return”) and is a powerful driver of the demand for college.

In this class, we have seen that in addition to a significant private labor market return, there are other private and social benefits to education, in the form of improved health, less crime, greater civic participation, and so on. These benefits are estimated to be about the same or a bit less than the private benefits. Overall, it is reasonable to conclude there are some positive externalities to attending college, and that if left entirely to the market there would an underproduction of higher education. So there is a rationale for intervention in the sector by the government.

The issue of course is how much intervention and what type? In some countries, higher education is almost entirely operated and financed by the government. Sometimes the reason is one of political and ideological control, rather than simply economic. In the U.S there is some direct public provision through state colleges and universities, but also state aid for students and other support for private institutions.

In this DISCUSSION FORUM ON THE GOVERNMENT ROLE IN HIGHER EDUCATION, consider government intervention in the postsecondary education sector in the U.S. Is the level of government intervention too little, too much or about right? Why or why not? How would you go about trying to figure out the answer to this question? As you ponder the question, be sure to consider the conceptual and empirical evidence we have discussed so far in this course. You can also bring in other ideas (e.g. from politics, from an international perspective).

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