The introduction of tuition fees at £9000 per annum for university study could be an area of discussion on this years econ 1 paper.
Basic merit good arguments apply (see the last post on healthcare) but here the state is moving away from free provision towards charging individuals for their study.
It is felt there are clear merit good arguments for education to 16 (or indeed 18 with legislation to be phased in over the next couple of years) thus making it a legal requirement and providing it free makes sure the "right" quantity of education is consumed. National Curriculum and inspection by OFSTEAD works on quality within this framework.
Higher education provision is not so clear cut - the government feels the benefits are more private in nature thus students should make more of a contribution to the cost.
There are equity issues here in that it maybe only those from above average incomes may take the risk of investing in degrees. Thus the government has built in some means-testing and suggested a quota system or positive discrimination to support children from lower socio-economic groups.
The impact of the introduction of tuition fees will only be known in the longer term. The rise in youth unemployment may be enough to encourage more students into education as a way of dealing with a lack of job opportunity although many graduates are now struggling to find work.
Will we see the death of the liberal arts degree as students seek a greater return on their investment from more technical subjects??
Highly skilled and flexible workers are the key to sustainable growth in a competitive global environment - clear positive externalities of higher education exist in this sense.
Basic Analysis:
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