ERIC Number: ED026722
Record Type: RIE
Publication Date: 1968-Sep
Reference Count: 0
Educational Opportunity, Democratic Theory, and the Economics of Educational Subsidy.
Owen, John D.
Subsidies to education are often justified by arguing that society derives political benefits from education in terms of individuals who perform better as citizens. Since these benefits are external to the student and therefore do not provide him with incentive to invest further in his education, society must devise a means of subsidy that will induce students to continue their education and thereby improve the workings of political democracy. Many argue that an optimal subsidy policy is one which stimulates the student's private economic motive for demanding education. By offering cheap tuition or providing loans at subsidized rates of interest, the consequent cost reductions lead to a greater demand for education. However, such across-the-board cost reductions stimulate investment in education among the more able students and lead to greater investment in training for higher paid occupations, where the private incentives are highest. The logic of majority voting indicates that a more efficient method by which to gain citizenship benefits from education might be through a more egalitarian subsidy policy which would allocate larger subsidies to less able students. Moreover, some selectivity in the areas of study to be supported is desirable, since some courses may be more effective than others in improving citizenship quality. (TT)
Publication Type: N/A
Education Level: N/A
Sponsor: Office of Education (DHEW), Washington, DC. Bureau of Research.
Authoring Institution: Johns Hopkins Univ., Baltimore, MD. Center for the Study of Social Organization of Schools.