Higher Education: a Public Good

In a recent New York Times article, Andrew Rice discusses the reasons for President Sullivan’s resignation this past June.  One part of this article in particular stood out in relation to our class.  Rice quotes Hunter Rawlings, the chief executive of the Association of American Universities:

“There was once a consensus in America that higher education was a public good,” Rawlings says. “What is new now, and radically different, is that after five, six, seven years in reductions in state funding for higher education, the whole system is under stress.” 

I’ve never thought of higher education as a public good.  After all, at the University of Virginia (a public school), there is both excludability and rivalrous consumption.  Many students who would want to attend UVA are kept out (excludability) and even those admitted find themselves fighting to gain one of the limited spots in the classes they hope to enroll in. The classes are limited in size because they, on average, exhibit the qualities of rivalrous consumption – the more people in the class, the less you enjoy it [can’t participate/ask questions as much, distracted by classmates who are on Facebook, etc].   So from that view, it is not clear at all that higher public education is a public good. 

 

However, Rawlings was considering not the actual education but the effects of higher education when declaring it to be a public good.  Bill Clinton explained it well in his speech at the Democratic National Convention:

“It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics, because discrimination, poverty and ignorance restrict growth, while investments in education, infrastructure and scientific and technological research increase it, creating more good jobs and new wealth for all of us.”

The benefits of having public colleges affect everyone.  More people are educated, which means they (theoretically at least) have better jobs or are more productive at their jobs.  Consequently, they are able to create better products or perform services better for the rest of us to buy.  They can also create new technology.  Since others having an education makes us all collectively better, the idea behind public goods is that we should all help pay for this education; otherwise public education will be under-consumed.  Since people won’t help pay on their own (due to the free rider effect), the government enforces it through taxation.