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Porpoise101
January 6th, 2017, 03:48 PM
Heavily subsidize education.

It's fair
It makes it easier for everyone to go
It produces more productive people
By churning out more highly educated people, more income equality


What do you think of this Ultimate Solution(TM)

Vlerchan
January 6th, 2017, 03:56 PM
University tuition fees for undergraduates were abolished in Ireland in 1996.
This paper examines the effect of this reform on the socio-economic gradient
(SES) to determine whether the reform was successful in achieving its objective
of promoting educational equality. It finds that the reform clearly did not have
that effect. It is also shown that the university/SES gradient can be explained by
differential performance at second level which also explains the gap between the
sexes. Students from white collar backgrounds do significantly better in their
final second level exams than the children of blue-collar workers. The results are
very similar to recent findings for the UK. I also find that certain demographic
characteristics have large negative effects on school performance i.e. having a
disabled or deceased parent. The results show that the effect of SES on school
performance is generally stronger for those at the lower end of the conditional
distribution of academic attainment.

http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201026.pdf

Unfortunately, by the time you reach third-level, you have already lost the individuals that you initially sought to help. In reality you end up just broadly subsidizing middle-class kids. There's also the question as to whether we actually end up seeing increased productivity as a result of third-level education anyways; I'm not sure of any papers off-hand which found, or did not find, that, but it's always been high on the list of questions in the theoretical literature.

On the other hand, if you mean pre-school education, I am all for that.

Stronk Serb
January 6th, 2017, 04:04 PM
Heavily subsidize education.

It's fair
It makes it easier for everyone to go
It produces more productive people
By churning out more highly educated people, more income equality


What do you think of this Ultimate Solution(TM)

Which lowers the price of labor for third-level education required jobs and as such makes getting third-level education pointless. In the end you get a useless degree. That's the situation in Serbia. I shared shifts on a trafika with a master economist and a guy who studied law. The lawyer shortage ended after he ended uni so he didn't bother to get his legal attorney licence and pass that test. I am going to the police academy, youget a job after you graduate.

Vlerchan
January 6th, 2017, 04:26 PM
Porpoise101: Acemoglu and Angrist (2000) (http://economics.mit.edu/files/3910) is the paper I'd intended to cite in my first post.

It notes the large social returns - externalities - associated with (second-level) education that more than justify government subsidizing such initiatives.

Which lowers the price of labor for third-level education required jobs and as such makes getting third-level education pointless.
Whilst the basic intuition is correct it doesn't hold to the same extent if there are spillovers from education; in other words, if being around more educated people results in you being more productive. This seems to be the case.

I find that a percentage point increase in the supply of college graduates raises high school drop-outs’ wages by 1.9%, high school graduates’ wages by 1.6%, and college graduates wages by 0.4%. The effect is larger for less educated groups, as predicted by a conventional demand and supply model. But even for college graduates, an increase in the supply of college graduates increases wages, as predicted by a model that includes conventional demand and supply factors as well as spillovers.

Moretti (2004) (http://www.sciencedirect.com/science/article/pii/S0304407603002653)

The issue is, as the first post highlighted, that subsidising higher-level education directly seems to be quite ineffective. For any returns to materialise, it is much more efficient to subsidies lower levels of education; especially does that, during which, you can work to indoctrinate the kids into a love for learning.

Porpoise101
January 6th, 2017, 05:04 PM
you end up just broadly subsidizing middle-class kids.

That is my idea. I figure that the lower classes already get support in other social programs. The poor and socially disadvantaged also tend to receive more of the scholarship money as well. My idea of subsidizing higher education is in response to the idea of "free college for people with a household income of less than ____". I find that unfair at its heart, and it also makes it so the middle class is less squeezed financially by the increasing burden that college tuition is for them.

On the other hand, if you mean pre-school education, I am all for that.
Why? According to this article (http://fivethirtyeight.com/features/is-pre-k-all-its-cracked-up-to-be/), the trial programs showing the great benefits usually have other things like free healthcare, childcare, and more. These things aren't being added in the real world so I am not really convinced by the pre-school argument. I also disagree with the idea of diverting public funds from other types of education for preschool. As Farran in the article said: "it makes me cringe."

Maybe the best idea is to make primary and secondary schools better as well if you want to reach all kids. And to do that, it is probably necessary to spend more on that, at least in the US.

Vlerchan
January 6th, 2017, 07:18 PM
I find that unfair at its heart [...]
If the aim is to maximize welfare and an extra dollar of subsidies for poorer individuals will induce a greater level of participation in higher education, at the margin, (as it probably does) then I fail to see what it unfair about it. But then, you haven't stated either your aim, or your fairness criterion, so it is difficult to respond to this.

[...] and it also makes it so the middle class is less squeezed financially by the increasing burden that college tuition is for them.

Great Britain and New Zealand also both have systems which encourage that the incidence of education costs be placed on the individuals attaining the education and that's what I believe is optimal. But where free fees had a (very) limited impact on enrollment in Ireland, I fail to see how transferring the incidence from the middle-class to the general tax-payer will have any sort of transformative effect; it might even reduce growth rates since such a redistribution of costs would induce a fall in long-run aggregate investment. What's more, where the impact on enrollment is very small, it would be welfare-optimal to just give a large tax-credit to middle class families when their children hit 18.

In other words, there might be second-order, political-economy benefits to subsidising the living standards of the middle-class; but, it's not welfare maximizing and - furthermore - it would seem to me unethical to have the other classes of society foot the bill for them; I would say, in particular, the working class.

Why? According to this article, the trial programs showing the great benefits usually have other things like free healthcare, childcare, and more.
Yes, but when the central claim of the study mentioned in the 538 is considered alongside the evidence that emerged from the Headstart program it poses a much smaller cause for concern. The literature that examined Headstart and those other programs also noted a fade-out - as is the central finding of the pre-K paper - but outcomes for participants across the long-run - in terms of education, jobs and crime - was still superior. Thus, whilst the Headstart literature has its differences - it was more comprehensive in focus for one - it should still probably guide any interpretation of the new wave of pre-K literature (i.e. view early results with extreme caution.)

The literature on pre-K programs otherwise - Weiland and Yoshikwa (2013) (http://onlinelibrary.wiley.com/doi/10.1111/cdev.12099/abstract) for example* - has also been more positive in its demonstration. The paper that 538 remarks on criticisms the methodological designs of these papers: i.e. quasi-experimental - but it itself suffers significant methodological limitations - selective-attrition - which it calls 'intensive substudy' - excludes it from any pretense of being a randomised control trial; because it's not randomised, parents select into the study. What's more, this paper makes no effort to control for cross-contamination; this affected the Headstart literature, too, though there was efforts made to control for it that would have mitigated the bias.

In other words, the paper that is questioning past research, 1. suffers from its own methodological limitations, 2. offers a view that previous, similar research would suggest we interpret with significant caution. Of course, in the end, more research is required as always, but looking at the bulk of the research on early-childhood interventions and the Pre-K literature, it offers, to me, acceptance - more cautious than I might have phrased it earlier - of the strong, positive impacts of early childhood intervention.

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* I'll be honest. I have an instinctive bias against School of Education researchers (and Social Psychologists) because their methods tend to be weak but, as far as I can see in this paper - written by two Harvard scholars, with quantitative-Y backgrounds - it seems to be quite good.

I also disagree with the idea of diverting public funds from other types of education for preschool. As Farran in the article said: "it makes me cringe."
Worth noting that it's diverting it from failing parts of the education system that makes him cringe; and I agree. We probably don't have enough evidence to suggest that frontloading their education - with gaps in the middle - is going to leave people, on average, better off.

And to do that, it is probably necessary to spend more on that, at least in the US.
Published by the CATO institute, so to be consumed with a pinch of salt - and probably 10 pinches more - but I haven't seen anything to commit me against it.

https://object.cato.org/images/testimony/coulson-2-9-11-3.jpg

But at the same time Jackson et al. (2015) (http://www.nber.org/papers/w20847) found considerable gains.

Event-study and instrumental variable models reveal that a 10 percent increase in per-pupil spending each year for all twelve years of public school leads to 0.27 more completed years of education, 7.25 percent higher wages, and a 3.67 percentage-point reduction in the annual incidence of adult poverty; effects are much more pronounced for children from low-income families.

ibid.

Is it not part of the problem that school-funding is allocated on a local level? I'd appreciate if someone could explain to me the actual specifics, though.

Porpoise101
January 7th, 2017, 04:19 PM
If the aim is to maximize welfare and an extra dollar of subsidies for poorer individuals will induce a greater level of participation in higher education, at the margin, (as it probably does) then I fail to see what it unfair about it. But then, you haven't stated either your aim, or your fairness criterion, so it is difficult to respond to this.

The reason I find it unfair is that the cutoff is often hard. After you pass the threshold, you instantly are disqualified. A subsidy would just lower the price of education (higher ed in this case) allowing more people to attend college. It makes sense for me to this because human capital has to be maintained if this makes sense. Since people die and leave the workforce, it must be replenished at the minimum. A heavily subsidized system would allow the majority to attend university or college, fulfilling that requirement.

I think maybe a good compromise may be to put in a soft cutoff, meaning that everyone still can get funds, but the allotted amount scales down by income. Since many of the scholarships are also geared towards the poor or minorities (non-Asian of course), the working class should still receive support, but through charitable programs, scholarships, and grants. Perhaps a good idea could be to make the public schools (primary and secondary) better for lower-income areas in order to make those students more competitive in merit-based scholarships and programs as well.

more research is required as always, but looking at the bulk of the research on early-childhood interventions and the Pre-K literature, it offers, to me, acceptance - more cautious than I might have phrased it earlier - of the strong, positive impacts of early childhood intervention.

I agree with this. There is nothing wrong with preparing children for schooling, but I believe there should be more experimentation on what types of programs are most effective in those years.

Is it not part of the problem that school-funding is allocated on a local level? I'd appreciate if someone could explain to me the actual specifics, though.

Well I will tell you how it works at least in my state. In the US as a whole though, education is handled by states only, with the occasional grant coming from the Federal Government. Each state curriculum is different, handles teachers differently, and funds schools differently. In Michigan (and almost every state I would think), the vast majority of the funding comes from the state government. So right off the bat, there will be disparities between different states and regions. Then in my state at least, it goes down to the county-level, and then a subdivision of that called a school district. Any extra funding usually comes from taxes imposed by the school district. Often times, they are millages. This links the revenue a school gets to the property value of the surrounding area. And this is part of the problem, as lower-income areas almost always have lower property values.

Another issue is that in my state in particular, there is another force weakening the public school systems. These are called charter schools, and they are privately-owned schools that are heavily subsidized by the state government. This makes it so more money goes to these people instead of the public schools. (Side note: Betsy DeVos, Trump's education pick, did this to our state) Overall, the funding for public schools has been really diminished for everyone, and it is worse if you don't live in a rich area.

Sometimes schools get grants from the Federal Government, but that isn't close to being enough to handle the whole country.

NewLeafsFan
January 8th, 2017, 12:02 AM
This sounds great. Education is the best way to fight unemployment, racism, poverty, world hunger, exclusion, ect.

The only 2 problems with your plan are that there will always be greed. The ither is that no one wants to pay for it. It could simply involve higher taxes but with so many right wing supporters demanding that businesses get all the tax breaks because aparently they work hatd than the rest if the world it will never happen.

Vlerchan
January 8th, 2017, 07:06 AM
A subsidy would just lower the price of education (higher ed in this case) allowing more people to attend college.
I'm not sure if you intend to increase subsidies so that the working class and minorities retain their current level of access - where middle-class children get a larger proportion than current. The evidence as to what extent increased subsidies for education induce higher tuition costs - crowding-out the gains - is mixed so I can't comment either direction but it is something worth keeping in mind when designing the policies; Micro101 predicts that subsidizing a good induces a price increase (estimates for college tuition have ranged from 0% to 60% of the size of the subsidy being captured).

Nevertheless, I came across this - results from randomised control trials, which suggest that the effect of subsidies is modest on initial enrollment in college (as would be implied from the case with free fees) and is more consequential with regards to those moving from two- to four-year courses. Though, it also tends to induce the largest gains for the less-meritorious; traditionally disadvantaged students [non-whites enrolled in a four-year at a 29% higher rate on receiving aid] (Angrist et al. (2014) (http://www.nber.org/papers/w20800) - non-paywalled write-up (http://seii.mit.edu/wp-content/uploads/2014/12/Leveling-Up-brief1.pdf)) which would inform a conclusion that might initially seem unfair: we are better off randomizing the allocation of these grants than allocating them to the top-performers.

In other words, student aid doesn't affect people enrolling in third-level education to any significant extent - and whether that effect itself diminishes across the long-run as prices adjust to increased demand is open - but that gains can be made in helping people transfer from two-year to four-year colleges is probably the case; though, this still leaves us with the same number of low-skilled workers.

This links the revenue a school gets to the property value of the surrounding area. And this is part of the problem, as lower-income areas almost always have lower property values.
I thought something similar. I was going to label it the more terrible idea around school funding I had heard of but then I scrolled down to this:

These are called charter schools, and they are privately-owned schools that are heavily subsidized by the state government.
What proportion of students go to this Charter Schools and how do the subsidies interact with fees?

Furthermore, how do you spell 'regulatory capture'?

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[...] businesses get all the tax breaks because aparently they work hatd than the rest if the world it will never happen.
Or - y'know - that businesses typically make more efficient use of their funds, investing at a much higher rate and so on, not to mention that the incidence of corporate taxation primarily rests on the workers.

Porpoise101
January 8th, 2017, 12:35 PM
I'm not sure if you intend to increase subsidies so that the working class and minorities retain their current level of access - where middle-class children get a larger proportion than current. The evidence as to what extent increased subsidies for education induce higher tuition costs - crowding-out the gains - is mixed so I can't comment either direction but it is something worth keeping in mind when designing the policies; Micro101 predicts that subsidizing a good induces a price increase (estimates for college tuition have ranged from 0% to 60% of the size of the subsidy being captured).

Do you think it could be better for the government to just open more public universities then? I hadn't really thought of that, but it was done before (https://en.wikipedia.org/wiki/Land-grant_university). If you do that, then that will actually open more spots in the university (supply in this case?), which should lower the price.

What proportion of students go to this Charter Schools and how do the subsidies interact with fees?.

According to CREDO (https://credo.stanford.edu/pdfs/MI_report_2012_FINAL_1_11_2013_no_watermark.pdf), there are 297 schools, mostly concentrated in the Detroit area. It is important to note that their student body is 70% in poverty and 57% black. Of the around 3,500 public schools, the students are 43% in poverty and only 17% black.

I am not sure what you are talking about with the fees. By law, the school cannot charge any form of tuition. The process is also obfuscated, and often you cannot see how much public money is going into these schools.

I should also note that charter schools aren't held to the same standard that public schools are. In our state, you get funding in part based by your student's scores on standardized tests. Charter schools get money either way. This is part of the reason that the majority of these schools are found in Detroit; they will always be able to outdo the failing public school even when they are failing.

Vlerchan
January 8th, 2017, 03:55 PM
Do you think it could be better for the government to just open more public universities then? I hadn't really thought of that, but it was done before. If you do that, then that will actually open more spots in the university (supply in this case?), which should lower the price.
If I am honest, I am skeptical that enrollment in third-level education is very sensitive to price.

If universities are homogeneous goods then increasing the supply of places should lower prices. But there are also questions about the homogeneity of universities; can you, for example, really compare Arizona State and Stanford? Given that they probably aren't homogenous, it might just induce a relative price drop for certain sorts of universities.

But I probably don't know enough about about the American third-level education system to really be able to comment on how the effect would manifest itself. Micro101 predicts that an increase in supply will induce a fall in the price of a good, but the market for third-level education has all sorts of imperfections; notably a large premium for incumbents, which makes entry difficult.

By law, the school cannot charge any form of tuition.
I didn't know about this bit. It's basically a voucher program then?

Charter schools get money either way.
Are you aware of their being any data on student performance holding demographics constant?

Porpoise101
January 9th, 2017, 04:16 PM
can you, for example, really compare Arizona State and Stanford?

No, I wouldn't say so. But you may be able to compare Arizona State, Texas A&M, and Michigan State. The vast majority of Americans go to public colleges, so if more are built than maybe the price will decrease considering that this class of university is more homogeneous.

I didn't know about this bit. It's basically a voucher program then?

Yes.

Are you aware of their being any data on student performance holding demographics constant?

Yes, there is, but it seems to be varied from state to state. One figure I saw was "17% better than public school performance", but honestly I am having trouble finding direct numbers.

bentheplayer
January 10th, 2017, 12:43 PM
With the way society is structured, I highly doubt that its possible to stop income inequality or poverty unless everyone is willing to follow the Sweden model also known as the Nordic model which has low income disparity model. Even then, wealth inequality is very high with the top 1% is thought to own 25-40% of society's wealth.

There is no silver bullet solution to this really unless we were to have wealth redistribution (inheritance tax) and high marginal income tax such that everyone is on the same playing field generation after generation.

To me as long as everyone has access to adequate food, shelter and healthcare, I think its good enough. There is no need to figure out how to ensure that the rich doesn't get richer as it ain't gonna happen. Even poverty now is being redefined as having a relative lower standard of living compared to the top 60-70% of society. There is no end to this debate and our life here on Earth is pretty short. Why not use it to do something meaningful for others instead?

Flapjack
January 14th, 2017, 06:13 PM
Yeah an educated population is great for the economy and benefits a country soo much and it is great for the individuals that do go on to study further education. No one should be forced to turn down education because they can't afford it!!I do not however think post 16 education should be forced. It won't fix every issue in society but my gosh it would improve sooo much!