The case for public education

The benefits of education are, to say the least, great. The opportunity cost of not providing enough education is, therefore, high. According to Stacy (1998) many studies, including Auster, Leveson & Sarachek (1969), Gorssman (1972), Silver (1972) as well as Grossman and Benham (1979), have shown that in U.S. "the number of completed years of formal schooling is the most important predictor of good health" (p. 55). Studies have also shown that the "public education system, together with the family, is the main institution for socializing American children" (McGrath in Stacy, 1998, p. 56). In her literature review, Stacy also found some evidence suggesting that educational attainment lowers crime and lessens environmental degradation. In addition to the above social benefits, formal educational attainment increases earnings potential. In the U.S. a high school graduate wage earner, age 25 or older, had a median gross income of $27,000 in 2006. By comparison someone with at least a Bachelor's degree earned a median of $51,000, while those with a Masters, Professional degree and Doctorate earned a median of $55,000, $86,000 and $78,000, respectively (U.S. Census Bureau, 2007b). The more educated the populace, according to empirical evidence, the more affluent, safer, cleaner, cohesive, and healthier the populace. Any inadequate amount of education will cause considerable harm.

                As with health care, the state needs to intervene to make the provision of this second-generation right universal, since markets discriminate based on income and fail to include all. Intervention beyond the income transfers and regulations are likely needed because the standard assumptions do not hold regarding education. Neither the assumption of perfect competition, nor that of perfect information hold. Furthermore, there are positive externalities that arise from its public provision.

First, there are negative externalities and incomplete markets arising from the fact that there will be little incentive to educate students in certain fields. Without state mandate and intervention non-vocational education may become very scarce (i.e. no market for humanities, etc...), leading to a culturally impoverished society. As Carter (1973) noted,

We have damaged the cause of civilization and culture by trying to convince people that they are "good business,"... Why should anyone, not a school teacher or an actor, study Shakespeare at an advanced level? Why should advanced Biblical studies be needed except by parsons? Pop music is evidently considerably more profitable than classical music; the implications for our music departments are clear. There is indeed no end to the nonsensical conclusions which can be reached by the assiduous servant of Mammon. (p. 213)

Second, imperfect information is a problem, especially among the lesser educated. Since individuals in the lower socio-economic classes are less educated, they may not be able to make as wise a choice when comes to education. Furthermore, individuals of all socio-economic classes may consume a less than optimal amount of education, because they do not deem the optimal amount necessary or worth the cost. As it is very important that individuals consume an adequate amount of education, society should avoid taking the risk of under consumption. Third, competition will be imperfect. Prefect competition is not only ruled out on grounds of imperfect information, but also owing to geographic considerations. Schools in rural areas may become monopolies and the less mobile in general would have little choice but to choose whichever institution is nearest (Barr, 2004, pp. 293-345).

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