Wednesday, December 08, 2010

Who benefits from higher education?

Today, in the House of Commons, PM David Cameron said that  plans to raise fees will mean that those who benefit from higher education will not be subsidised as heavily by those who do not.

The idea seems to be this. Students are the beneficiaries of higher education. Thus, they should pay the costs of higher education if they wish to receive the benefits. Furthermore, those who do not attend university should not subsidize those who do. The idea here is that those who do not benefit from higher education should not subsidize those who do.

Does this get the idea of "benefit" correct? No. Let me consider various scenarios to more closely analyze the sense of "those who benefit should be subsidized by those who do not benefit".

Students with university degrees may expect greater than average earnings. They may benefit from these higher earnings. The government claims that those who do not enjoy such benefits (e.g., higher than average earnings) should not subsidize those that do enjoy these benefits. Several thoughts on this:

1. A wealthy businessman without a degree did not enjoy the benefits that may have been likely had he attended university. However, he will also share in the benefit in question: higher than average earnings. If those who do not enjoy benefits (defined as higher incomes) should not subsidize those who do enjoy the benefits (defined as higher incomes), then the wealthy business does enjoy the same material benefits and, thus, he is not exempt from subsidizing university students through the tax system . . . even though he had not attended university himself.

2. The other scenario is this. Suppose that we understand "benefits" as in The university student benefits differently. Instead of "higher incomes" we now understand it as "higher incomes due to university study". The wealthy businessman lacking a degree may enjoy the benefit of earning a higher than average income, but he would not enjoy the specific benefit afforded to university students: his higher income was not due to university study. The wealthy businessman then does not enjoy the same benefit -- if we understand "benefit" in this different way -- as the university student. Thus, according to this principle, the wealthy businessman lacking a degree should not pay a penny to help defray university costs for students under any circumstances. BUT the government will use tax revenues to subsidize students in science subjects, as well as to help fund research councils.

3. Consider a different scenario of the student whose expected income for a course will be under £21,000 (the amount from which which she will be expected to pay off her student debts). Courses where students will likely earn under £21,000 will be fully subsidized by tax payers because students will not have passed the threshold by which they must pay off their debts. One way of looking at this is to say that the students have not received a (material) "benefit" from their education in the form of higher than average wages. If they lack the benefits, then they may be entitled to some subsidy. This, in turn, undermines the government aim of having students pay the costs of their course.

4. Let's return to the wealthy businessman lacking a degree. Does he benefit from university graduates? He may if their skilled labour is in demand at his place of work. Subsidizing universitry study through the general tax system allows him to support a wider system by which his pool of available talent for employment is increased. Thus, he is a direct beneficiary. If those who benefit should pay, he benefits and should pay.

5. What about the average citizen? Many of her local and national representatives who determine policies at home and abroad are university educated. They are also chosen by the citizenry in competitive elections. There is a case to be made that we all benefit from university graduates in the determination of public policies. We all benefit and, thus, should all pay. In fact, it is difficult to imagine a case where most citizens do not benefit in any substantive way from higher education.

The alternative is to say that this principle of those who benefit should pay is a matter of justice. If this is the case, then why should immigrants unable to receive welfare assistance pay taxes that contribute to the welfare assistance of otehrs if "those who benefit should pay"? Or why should the able bodied pay for the health care costs of those less healthy? Or why should council tax money from citizens who do not drive or use a car be used to pay for road repairs and snow removal? Or why have any state service? On the one hand, we all benefit in some sense from various public services. On the other hand, it may be possible to make cases like these hypothetical questions.

It then appears that the principle that "those who benefit should pay" sounds catchy, but yet wildly problematic and objectionable. In fact, it would seem no major policy adheres to the principle in any clear sense, not least higher education policy.

If only our politicians took their own stated principles more seriously . . . . . . . . .

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