Topic 8 Education, Families, Children | Econproph [Comp. Systems 2017]

For this week we turn to another issue that poses complex challenges to societies involving their choice of economic system. This is the question of education and the care of children. This is another area where economic systems, the societal arrangements for dealing with scarcity and value production, have had to evolve as nations have developed or industrialized.

For a moment, let’s consider a very poor, un-developed nation. Some of the poorest nations today are in central and sub-Saharan Africa, but even they are rapidly growing beyond the state I’m considering. I’m thinking back to before the industrial revolution. Life was short – 30-40 years was generally max life expectancy. It wasn’t because nobody lived longer but rather because infant (before age 5) mortality was so high. So put yourself in the (non-existent) shoes of two adults then. You scraped out a living doing subsistence farming. Very labor intensive, but simple labor. The rational choice was to have lots of kids for two reasons. First, most of the them wouldn’t live to survive to adulthood, so it made since to up the odds by having several. Second, by the age of 6 a child could start doing labor on the farm. By 6, they could generate enough value from labor to offset the additional food cost of feeding them. More kids = more production.

The industrial revolution, and now the computer revolution, changes all that. We have machines for simple unskilled labor. To make kids valuable, we have to educate them. That takes time. It also takes time for that investment in education to pay out. It does pay out, but only over decades. To complicate matters, the pay-out is both to the individual and to the society as a whole – what we call positive externalities.

The U.S., dating back to pre-colonial times in New England, along with England was a leader in the world in pioneering public education. That is, education paid for by the public and required by law. People pay taxes as a society and those taxes fund the education. Since the entire society benefits, it is a good investment. It also solves the financing problem for the student (or their parent). Older people pay taxes now to educate the young. When the young get older, they will be more productive and pay taxes to educate the next generation. It’s what’s called an “intergenerational transfer”. By the time of WWII, nearly all kids were getting a high school education. In the post-WWII era, we expanded this approach to college by funding the GI Bill and colleges/universities directly. In the 1960’s in some states, notably California, college and university education, even at University of California Berkeley, was free to California residents.

As you’ll see in the first reading, things have changed since then. Ok, you know from your own tuition bills that college isn’t free anymore – at least not in the US. But the free college concept as a social good is still alive in other countries such as Germany and Denmark.

To participate in this discussion, read the three required readings below and respond. As usual, you may choose to respond by writing a post on your blog and categorizing it as ECON 260, or create a new front-page post on this site, or use the reply/comment link to this post.

Topic 8- Education, Families, Children

Go To College For Free? Germany Is The Only Country To Provide Tuition-Free Higher Education As US Struggles With Student Debts International Business Times http://www.ibtimes.com/go-college-free-germany-only-country-provide-tuition-free-higher-education-us-2497146

The US Model of Higher Education is Flagging by The Economist http://www.economist.com/news/special-report/21646988-americas-higher-education-system-no-longer-delivering-all-it-should-flagging-model?fsrc=scn/tw/te/pe/ed/aflaggingmodel
Caring for Children is Caring for the Economy https://econproph.com/category/intergenerational/

Starting points for additional research if you are interested or your project relates to this topic:

So you want to compare educational systems from different countries? Where to start? https://theeconomyofmeaning.com/2013/11/01/so-you-want-to-compare-educational-systems-from-different-countries-where-to-start/

OECD’s Education GPS http://gpseducation.oecd.org/Home

Brittney Baley 2:44 pm on March 17, 2017

Education is something many of us take for granted. For most of America’s history there has been little education as stated in the articles. A high-school education slowly became something people boys received, and then girls as well. As of now a high-school education is expected to be completed, structured far differently, and is taken advantage of. Many women in poorer countries aren’t allowed to go to school, if there is even a school at all.
I agree that education is important, especially at a young age. From what I learned from my one child growth and development class (I am no expert, but I can speak to the bits that I did learn) the first few years are life are full of potential, they shape a large part of what will be the rest of the child’s life. Granted there are always exceptions, just because a child grows up poor and was never taught to count and read doesn’t always mean they wont’t become a productive member of society. But, and this is a very large but, the majority of the time what a child is taught and learns in the first five years will be something they learn quicker, and know better. If a parent reads to their child at a very young age and slowly starts teaching the child numbers, and letters, and generally talks to the child, the child will learn a lot and be ahead in kindergarten. The child will learn more than any adult would in the same amount of time with new martial. Even if they are not developed enough to show what they have learned. Young brains are easily molded and absorb EVERYTHING. This means the earlier learning starts the better off the child is.
As for free college, this is a very touchy subject. I understand the concept of it, but what will happen a few years down the road? An associates degree will become useless just like a high school diploma and then we are back in the same spot, this time with a Bachelors degree. To make this idea work we need to not change just policies and make community college free, but also change the mindsets of people. More government funding should go towards education, less towards wasteful spending and standardized tests. The work industry should be less degree orientated and more people orientated. A degree does not always mean a person can do a job. It does show the ability to learn but to what extent? Where does it end and the ability to learn is proved? That needs to be determined.
Chibuzor 1:11 pm on March 28, 2017

It is no secret that the cost of getting a college education is continually rising. This does not just apply to residents, international students are not exempt from it either. International students pay well over double, if not three times more than what a regular student pays. The US is recognized to have one of the best quality of education worldwide, but the total
cost of attaining an undergraduate degree, be it over a two year span, four year span or however long it takes is outrageous.

The economic principle that the more demand for a product or service there is, the more it is likely to increase in price and supply and this is the case for the cost of college education. I also came across an article that talked about another reason for the rise in tuition: as college costs rise, more students need scholarship to offset some of the burden and so to offset the costs of giving out scholarships, colleges and universities need to increase the tuition of others who unfortunately do not get scholarship and pay full tuition, in other words, they are essentially robbing peter to pay Paul and the cycle goes on and on.

I do not think that college tuition is going to be cut down any time soon. Even if it does, more money would be taken out from somewhere else to balance the system. Because people value education and see it as a means to an end that is, a means to livelihood, steady income and security, the educational system, colleges and universities would not to back down with the price of attaining that goal.
Daoud Esa 11:12 pm on March 30, 2017

As the price of a college education increases, there is a big dilemma for the young Americans who graduate from high school. Finding a job that pays above thirty thousand a year without a college education is virtually impossible now. In addition, as this become more and more so, the cost of a college eduction is the highest it has ever been and is increasing. A college education is a major fundamental part of a successful American. In this case, their is a cycle going on within the financially well off families. Families who are financially stable and could afford a college education for their children are better off than the poor students who wish to seek a college education. Many European countries offer a free college education for their people. Our new president, Donald Trump, has called for an increase in military spending by $54 billion. With this increase the military budget is looking to be around $582.7 billion. With this kind of money we could have free college education without drastically raising our taxes. I am perfectly fine with a tax increase of 5-10 percent for those who cannot afford to pay for their college education. Caring for the next generation of children is caring for the economy. “In October 2015, 69.2 percent of 2015 high school graduates were enrolled in colleges or universities”. Imagine this number being around 99 to 100%. Our economy would surely benefit from this.
Alexander Westerlund 11:10 pm on April 10, 2017

Very surprising! I Never knew that Germany is the only country that provides tuition free education. The massive cumulative amount of student debt is constantly getting larger and larger. There is no stopping it anytime soon or possibly ever unless something is done to lower it. But what could possibly be done to lower tuition for a class or a semester of college? Free college is out of the question because yes a lot of people would take advantage of the opportunity.. However thinking about all the people that would abuse the opportunity and thinking about how the campus would be maintained and professors be paid would cause more issues than fixing the main issue of college tuition prices. It makes me wonder if the government even saw this issue coming. Maybe its supposed to be this expensive though? Having the price be so high should keep students motivated to work hard and work for their degree whatever it may be… But looking at the first article I could maybe see our country making college about as affordable as most European countries do.
Alice McEwen 5:35 am on April 20, 2017

In the second article it says ” A report by a congressional committee published in 2012 found that for-profits had a 64% drop-out rate and spent 22% of revenues on marketing, advertising, recruiting and admissions, against 18% on teaching,” which I think is truly something to analyze. I mean there’s honestly no mystery as to why the cost of tuition is increasing but the value of bachelor’s are decreasing, it all boils down to profits. Once too much of the American population receives their bachelor’s then Masters degrees become a requirement, and that leads to more and more debt which isn’t, as we can see from the data, being paid off entirely. So, people are getting more degrees but not getting much of a return because they’re in debt but the individuals debt doesn’t matter to the for profit university since they’re going to make money regardless of the individual dropping out or graduating.