Question

In: Economics

Is there a free rider problem (market failure) associated with education in the United States and...

Is there a free rider problem (market failure) associated with education in the United States and how can it be corrected

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Expert Solution

The free rider problem is an economic concept of a market failure that occurs when people are benefiting from resources ,goods or services that they do not pay for.If there are too many free riders the resources,goods or services may be underprovided.Therefore this would create a free rider problem.The problem commonly seen with public goods.

Many of the public sector enterprises suffering from this s free rider problem.US education system is ine among them.As the worlds number one efucation system it still facing the problem of free rider.Among the findings K-12 education is drastically underfunded in every single state in the US. The tax evasion and ineffective tax policies are the main reasons which create free rider problem. But a majority of the Americans instead support repealing tax cuts for the rich and using that money to invest in education,infrastructure and health care.

The effective tax collection or shifting to private sector or soliciting donations from the eligible people are the best methods or solution for this problem.


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