The Blake School
In evaluating the beneficial externalities that justify government support for higher education, society must look beyond the economic benefits, such as increased productivity. Individuals who have invested in higher education develop stronger civic and communal values. Education strongly encourages political activity, public awareness, community involvement, personal and familial health, reduction in crime, and acceptance of basic democratic values. These behaviors occur because investment in human capital increases the opportunity cost of inefficient time and resource allocation. Government investment in education is not only an investment into the economy; it is also an investment in the strength of the democracy itself.
The economics behind the higher rates of civic activity resulting from education can be explained by examining the costs and benefits of socialization. Economists Glaeser, Ponzetto, and Shleifer state that, “A primary aim of education is socialization.”1 Fundamentally, education imparts stronger communication and social interaction skills. An individual capable of effective communication increases his/her potentia l contributions to a group effort and the group’s potential as a whole. As communication becomes easier, the cost of collaboration decreases. The opportunity cost of rejecting cooperation also increases with communication proficiency. The well educated spur their peers to participate in politics by using their developed persuasion/communication skills. Educated individuals are drawn towards collaboration because a group of efficient communicators is more effective than the sum of the individual parts (due to specialization). These individuals understand the necessity of cooperation to effect political change.2
The effects of education on democratic activity are clear. Economist Thomas Dee states that college entrance correlates to an increase in voting by almost 30% above the average.3 Dee finds that education increases the rate of newspaper readership and significantly raises support for free speech.4 Glaeser shows that college graduates are overwhelmingly more likely to join groups and organizations.5 Both Dee and Glaeser demonstrate that college graduates are more likely to “volunteer” and combat local problems (20% and 29% respectively).6 Barbara Wolfe states that, after income, education is the “primary determinant of donations” to charitable causes. Her research found that college graduates dedicated twice as many hours towards volunteering as did high school graduates.7 Educated individuals pursue these civic behaviors because their stronger social interaction skills increase the benefits and decrease the costs of social interaction.
Beyond direct civic values, education reduces crime and promotes healthy lifestyle choices. A report issued in 2000 by the US Joint Economic Committee stated that the average crime rate in the top fifteen “most educated” states was 20% lower than the same rate in the fifteen “least educated” states. The report concludes, “Education has a greater effect on crime reduction than the higher income that is associated with superior educational attainment.”8 The high cost, both direct and indirect, accompanying the legal consequences of criminal activity discourages individuals with higher education from participating in illegal behaviors.
Wolfe documents additional benefits of education. She indicates that education positively affects the individual’s life expectancy and health. She proposes that these health improvements arise from better information about nutrition, healthy activities, and use of health services, along with a decline in health harming activities. This claim is supported by her quantitative conclusion that additional years of schooling decrease the amount of cigarettes consumed, reduce the likelihood of heavy drinking, and increase the average amount of exercise. Wolfe also realized that children of more educated parents tend to experience lower rates of infant mortality and low- weight births. Education helps individuals recognize the benefits of healthy behavior and the costs of unhealthy habits, positively affecting the health of the individuals and those closely associated with them.9
Higher education, by increasing an individual’s marginal productivity, raises the opportunity cost of non-optimal choices. This higher cost induces individuals to make better choices, which generates beneficial externalities that are highly desirable in a democratic society. Higher education produces individuals who effectively cooperate to accomplish their political aims. These individuals are politically invested, active in their communities, charitably oriented, healthier and law-abiding. Utility maximizing, educated individuals will avoid costly behavior while realizing the benefits of civic participation.
The presence of these beneficial externalities indicates that the free market alone will fail to produce the optimal supply of individuals with higher education. Government policy should aim to increase the number of educated individuals by reducing the costs of higher education through subsidies. The government currently subsidizes higher education through student loan programs and scholarship opportunities. Such subsidies are currently under attack for their “inefficiency.” Before reducing funding for student loan programs, voters and policy officials must understand that cuts in funding will reduce the presence of the externalities brought about through higher education. Cutting subsidies could weaken the vitality of our democratic society. Before slashing these valuable aids, the “inefficiencies” of education subsidies must be weighed against the political virility, community health and civic values they bring about.
1 Glaeser, Edward L., et al., (2006). “Why Does Democracy Need Education?” Journal of Economic Growth, Vol. 12, No. 2, 77-99, p. 79.
3 Dee, Thomas S. (2003). “Are There Civic Returns to Education?” National Bureau of Economic Research, NBER Working Paper Series, Working Paper 9588, p. 8-9.
4 Ibid, p. 21, 23.
5 Glaeser, “Why Does Democracy Need Education?” p. 15.
6 Dee, “Are There Civic Returns to Education?” p. 9, and Glaser, “Why Does Democracy Need Education?” p. 14-15.
7 Wolfe, Barbara and Zuvekas, Samuel (1995). “Nonmarket Outcomes of Schooling.” Institute for Research on Poverty, p. 8.
8 Saxton, Jim (2000). “Investment in Education: Private and Public Returns.” Joint Economic Committee, United States Congress, p. 10-11.
9 Wolfe. “Nonmarket Outcomes of Schooling,” p. 6-7.