Question

1. What is an economic argument for public funding of education? Does this mean that schools should be publicly establishment/managed? What benefits would result if the government simply provided parents/students money for education and allowed parents/students to use this money to buy their education at whatever school they wished?

Answer 1

Public education is the biggest initiative undertaken by many governments around the world. If spending is a measure of social and economic value, no other governmental program – including national defense in many cases – is considered more valuable than exposing youth to a systematic education for at least a minimal period. The United States is in the middle of the pack when it comes to school expenditures—contributing 5 percent of its gross domestic product (GDP) to public education, which is average among the 34 top industrial nations. State governments in the U.S. contribute an average of 48 percent of this overall cost, with local communities paying for 44 percent.

Research shows that individuals who graduate and have access to quality education throughout primary and secondary school are more likely to find gainful employment, have stable families, and be active and productive citizens. They are also less likely to commit serious crimes, less likely to place high demands on the public health care system, and less likely to be enrolled in welfare assistance programs. A good education provides substantial benefits to individuals and, as individual benefits are aggregated throughout a community, creates broad social and economic benefits. Investing in public education is thus far more cost-effective for the state than paying for the social and economic consequences of under-funded, low quality schools. For example:

• High school dropouts are more than twice as likely to be unemployed and three times more likely to receive welfare assistance, costing billions of dollars nationally each year for government funded assistance programs.
• Decreasing the number of high school dropouts by half would nationally produce $45 billion per year in net economic benefit to society.
• Improved education and more stable employment greatly increase tax revenue, such as a return of at least 7 dollars for every dollar invested in pre-kindergarten education.
• 41% of all prisoners have not completed high school, compared to 18 percent of the general adult population. The annual cost of incarcerating an individual is about $32,000, while the annual cost of a quality public education is about $11,000.
• A 5% increase in the male graduate rate would save $5 billion in crime-related expenses.
• Mortality decreases for every additional year in schooling by 7.2% for men and 6% for women; and the chances of optimum health is up to 8 times higher for citizens with eighteen years of education versus only seven.
• Graduating from high school improves the quality of health, reduces dependence on public health programs by 60 percent, and cuts by six times the rate of alcohol abuse.
• National savings in public health costs would exceed $40 billion if every high school dropout in just a single year would graduate. Average annual public health costs are $2,700 per dropout, $1,000 per high school graduate, and $170 per college graduate.
• A 1-year increase in median education level is associated with a more than 13% jump in political primary turnout.