Imagine you are the newly elected governor of Virginia. A key part of your platform was to help the state economy by improving the quantity and quality of the educated labor force in the state. As all politicians have clearly illustrated over the years, it is much easier to say you are going to improve the economy than it is to actually do it. Thus, you know the importance of coming up with a unique yet impactful solution to this problem.
A couple months into your term, you are at a UVA football game, rooting on your alma-mater. Shortly after a last-second, game winning touchdown throw, you are happily leaving the game when a young boy decked out in full blue and orange catches your attention. He looks up to his parents and says, "I'm definitely coming to UVA when I'm older!" That's when it hits you! Prospective students are drawn to schools with great athletics programs. In fact, the "Flutie Effect" notes that a college football team going from mediocre to great has the same effect on the quantity of applications as a 3.8% decrease in tuition. Thus, the key to improving the state economy is to improve UVA football.
I know this may sound like a bit of a stretch so let me break it down. A better football team at UVA means more applications. More applications mean that UVA admits more students and/or more qualified students (assuming that increased athletic success does not change the composition of the application pool by deterring academically-successful students from applying). This means that there will be more qualified graduates coming out of UVA. Since businesses in the DMV recruit heavily from UVA, this means the overall quantity and quality of the educated labor force in the state will improve. This makes your constituents happy, it improves the overall standard of living in the state, and also leads to increased production for the businesses that hire these students.
This is a classic example of a positive production externality. The production of high-quality collegiate football leads to an increased educated labor force in the state. The SMC is lower than the PMC, and thus high-quality collegiate football is underproduced (a concept that UVA students are all too familiar with). Therefore, I argue that college athletes should be paid. Not by the NCAA. Not by the school. But by the state. Paying athletes will attract better athletes, and the athletes will train harder if their is a monetary incentive. This leads to a better athletics program, and, as mentioned above, a better state economy. You implement your solution, and it works! It works so well, in fact, that Amazon chooses Northern Virginia to be the site of its HQ2, which has several positive externalities on the state (but that's a blog post for another day).
1 comment:
Being an NCAA athlete is a full-time job, and as an athlete, I am all for the compensation of collegiate athletes. Being an athlete comes with many perks including: scholarship, athletic dining hall, and so much more. The biggest perk of all (and I am sure that all athletes agree) is the opportunity to continue to pursue the sport they love for the school that they love at the next level. Being able to pursue my sport at the next level has been such an amazing experience that I will cherish forever, and being able to continue my sport at the next level has made it all the more worthwhile to do so on top of an already busy college schedule. Since I’ve been in the system for quite some time, I get the ins and outs of how the NCAA works. I know the NCAA has complete control over the profits that their athletes generate for the association, and I also know the athlete is not compensated for their service he/she provides for their schools by the NCAA. Though I am for the compensation of athletes, paying athletes to play sports at school is not possible, and on top of that, a positive production externality will not stem from paying student-athletes.
There are many rules that need to be adhered to, but one of the most talked about and most prevalent rule is Title IX. Title IX ensures equality for both genders in sports. The example sport used in this paper was football. Football is the biggest profit generating sport out of all of the collegiate sports. The reason for this is because it is the sport that draws the most attendance. So, since football draws the highest attendance rate, then it’d be smart to pay those athletes in order to inspire more fans to go to the respective school. By paying these athletes, there is now an imbalance in equality now. The male sports are being paid more money than the women sports, and this is in direct violation with the NCAA. The government can choose to pay female athletes as well, but their attendance is just not as great as male sports, and the impact will be not as great as football. The effect of paying these sports with lower attendance won’t change the type of applicants and application rate. This also means the cost of paying football players is their cost plus the cost to pay female athletes in order to balance the two genders. The government can see this as too steep of a cost to pay. Another flaw here is, if UVA is paying their student athletes, all other schools should be able to do so as well. The NCAA will not allow for one school to have a competitive advantage over recruiting.
If all public schools and the NCAA were to accept these changes to allow state government to pay these college athletes, how much change will there really be in football or any other sport rankings? The state of our football team and the state of all the other football teams will remain unchanged. Players will be just as likely to go to Alabama or any other big football. UVA will continue to pick up the same, talented, recruits. No school will be more better off with this rule change. Therefore, there will not be an increase in positive production externality because there will be no change in performances. This does not mean that we can’t be great because hard work is what makes a great program. We have a terrific football staff, and I believe the football players and coaches are doing everything in their power to be great.
In sum, it is currently not possible to pay student athletes at the university of Virginia. Even if we do so, we will not see the changes that the government would like to see.
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