Taking Up Bryan's Challenge
By David Henderson
I have never let my schooling interfere with my education.
The above is a famous quote from Mark Twain and it relates to the challenge Bryan posed about whether there any countries in which there is too little education. I submit that Exhibit A of such a country is the good old US of A. The fact is that many people (I think most) do let schooling interfere with their education. As David Boaz once said (I’m paraphrasing), “You’ve got to hand it to the public school system. They take something inherently exciting like learning and make it boring.” The simple fact of government provision of schooling–and the amount of time that takes out of our lives–means that it displaces education.
Also, I think commenter “quadrupole” on Bryan’s post nailed it with his numerical example. And he stated it beautifully before he got to the numbers: “It’s a margin thing.”
Or, as I put it in The Joy of Freedom: An Economist’s Odyssey, p. 298:
Government schools don’t have to produce as good a product as the schools that depend on voluntary grants and tuition. Say you’re currently sending your child to a tax-funded school, and you’re not particularly satisfied with it. So you look around and find a Catholic school that charges $3,000 in tuition. For you to move your child to the Catholic school, you have to find the education there to be worth at least $3,000 more to you than the education at the tax-funded school is worth. $3,000 is a lot of money to most people. Therefore, the government school can compete effectively even by being substantially worse in the eyes of most parents. If you send your child to a private school, you’re paying twice. For the public school you’re not using, you pay through property taxes, state income taxes, and sales taxes, and for the private school you pay tuition. That creates a tough dilemma for most parents and is key to why government schools have close to a lock on the school market.
Sam Peltzman made this point in an empirical article in the Journal of Political Economy in the 1970s [“The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education,” JPE, 1973, Vol 81(1), pp. 1-27] and concluded that, with government provision, this theoretical possibility, for higher education at least, actually happened. Although they don’t cite Peltzman, Harvey S. Rosen and Ted Gayer, in their Public Finance textbook, on pp. 140-141, make the point with indifference curves and budget constraints. When I teach this, I point out that even their exposition, although excellent, treats the government schooling as if none of the financing for it comes from taxes on any of the parents. [If they allowed for the government schooling to cost something to at least some parents, they would have to shift the budget line down.] And even with this strange assumption, they get the theoretical possibility that government schooling reduces the amount of education.