What do you think about the argument education should be subsidized because it creates a positive externality?

Answer 1

It is universally accepted and one of the least disputed ideas in economics. Controversies arise only about how much should be subsidized and how to get the biggest return on subsidizes.

Answer 2

I agree. Education externality is spread over the entire economy (educated workers are good for local companies and attract foreign investors), so it would be really hard to come up with a market mechanism that would allow some economics agent to capture those benefits (and hence give them a reason to pay for education)

There are two important things about education subsidies -
1. government has to make sure money is well spent, and student test scores indeed increase.
2. Government has to make sure that these educated people stay in the country - either through building a stable economy, or emigration controls.

Answer 3

Subsidizing education is far better than subsidizing the military or tax breaks for the super rich.

Answer 4

Yes, my being around smart people helps me do my work better. That's a positive externality associated with education.

Answer 5

I like it. However, I believe we could get more benefit if control of the dollars we pay into property taxes were put into the hands of the parents with school age children instead of the bureaucrats who run the schools.