Economic Implications of Free University Education - Example

Economic Implications of Free University Education Student’s Name Institutional Affiliation Course Name Date of Submission Economic Implications of Free University Education Education has long been regarded as key to the success of any individual in the society. Similarly, it has been noted that an educated society performs better in terms of development compared to a society where people are illiterate. However, because the society do not always understand the benefits of education until one succeeds by getting a good job and earn good salary, education ranks among the merit goods. Merit goods are a concept that was introduced by Richard Musgrave in 1957 (Samuels 2013, p. 7). Samuels (2013, p. 7) defines a merit good as those goods or services that the government believes to be important to the society, but that people can under-consume, therefore, needs to be provided free or subsidized at the point of use to ensure that their consumptions of these goods or services do not depend on an individual’s ability to pay. Education is classified as a merit good because despite its importance to an individual and the society, it might be under-consumed if the ability of an individual to get education is left to depend on the ability of an individual to pay. Therefore, because education is a merit good, there are those who have been strongly advocating the provision of free university education to ensure that all Americans regardless of their socioeconomic status. Those who advocate the provision of free university education believes that making such a move will be of immense benefits to the development of the American economy. Nevertheless, some economists have strongly opposed the idea of providing free university education, arguing that it is not good for the U.S. economy. This paper will discuss the economic implications of providing free university education at the point of use. Almost all developed countries and many developing countries currently offer free primary and secondary school education (Clawson and Page 2012, p. 17). The United States is an example of the countries where students enjoy free primary and secondary education. In fact, there has been no controversy about the provision of free primary and secondary education as both the conservatives and the liberals around the world appear to agree that free primary and secondary education is a right. By contrast, things are always different when it comes to university education, where there is a wide difference between nations as regards their policies. Samuels (2011) notes that, in many states, students are required to pay fees in order to get university education, most of who are forced to seek loans, bursaries or grants so as to attain the needed education. Many states, however, provide financial assistance to students from low socioeconomic backgrounds that cannot pay for university education. The policy of charging students fees to get university education is not isolated only for the United States, but in many countries across the globe, with only a few countries, such as Germany and Denmark offering free university education. In fact, the U.K. recently increased the amount of tuition fees that university students are required to pay. This came about after the U.K. government decided to introduce top-up fees system while doing away with the grants. Samuels (2013, p. 12) feels that the move could leave universities with huge debts since increase could see students studying in the U.K. universities pay as high as £50,000 to complete a three-year university degree. Samuels (2013, p. 16) is amongst those who believe that university education should be provided free at the point of use. The economists particularly believe that offering free university education will have brought many economic benefits to the country. According to Samuels (2013, p. 16), offering free university education is necessary for any country that intends to achieve meaningful economic growth and development as it will result in the establishment of a society that has many educated people, thereby resulting in productive workforce. In other words, the economist is trying to imply that, if a country like the United States provides free university education, this will see many Americans become highly educated, thereby resulting in the production of many skilled labor that would help spur economic growth and development. The economist even went further to support this argument by stating that nations that have high rates of students with university education are a head in terms of innovation and development. This is because they have high skilled workforce that drive innovation and development. In fact, when the German government decided to make its university education, Chancellor Angela Markel categorically stated that the move is aimed to increase the population of its skilled workforce to help make Germany more competitive in terms of innovation and productive growth (Samuels 2011). Indeed, Germany currently produces many university graduates than before, a factor that is likely to spur huge growth and development of Germany in the near future. Secondly, economists in support of free university education argue that the move will be good for the economy of a country as it will help reduce joblessness. Clawson and Page (2012, p. 26) reveal that most employers are currently looking for highly educated and talented candidates. This implies that the only way to ensure that American citizens become competitive in the job market is to make it easy for students to acquire higher education. Fortunately, the best way for the government to do this is to offer free university education so that any American regardless of socioeconomic status acquires university education. With university degree, it will become easier for the Americans to get jobs or start their own businesses, thereby improving economic growth and development. McMahon (2010, p. 12) reports that Sweden and Denmark have benefited a great deal economically since they started offering free university education to its population. McMahon (2010, p. 12) notes that, with free university education, Sweden and Demark have been able to produce many graduates that are on high demand in the job market, both locally and internationally. Accordingly, this has helped reduce the rate of unemployment in these countries, which has been of great benefit to the Swedish and Danish economies, notes McMahon (2010, p. 14). Thirdly, proponents of free university education argue that free university education is necessary for the development of a country since it helps promote equality of opportunities. Hettinger (2014) observed that; if students are forced to pay for their university education, this sometimes discourages many to continue with education. This is because some are forced to work part-time or obtain loans in order to be able to continue with their education. Accordingly, this might discourage many students, especially those from low socioeconomic backgrounds to continue with their studies and instead opts to enter the job market without the right skills that is required to make a country competitive. As such, Hettinger (2014) advices that the best way to spur economic growth is to give the entire population equal opportunities in the job market by enabling everyone to acquire university education by making it free at the point of use. Despite strong support of free university education, liberals and a section of the society have strongly opposed the idea of offering free university education in the United States. The first major reason for opposing free university education is that the move would put American universities into financial difficulties that might force some campuses to close down for lack of funds. Pirie (2015) notes that most universities depend on the fees paid by students to meet the running costs, such as paying lecturers and support staff, obtaining learning resources, as well as expanding campuses. Therefore, Pirie (2015) argues that making such a policy will be detrimental to American universities and campuses as it will force many to financial difficulties and even collapse, which in turn will be counterproductive to the American economy. Critics of free university education have cited German universities that they claim are currently finding it difficult stocking their libraries and acquiring research facilities. They note that most German university libraries are currently poorly stocked and have outdated research facilities since they do not have enough funds to acquire the needed resources due to the abolition of university fees by the government. Iacobucci and Tuohy (2005) state that even the American universities that charge tuition fees for their students are facing a huge challenge acquiring the needed learning materials and resources. Therefore, abolishing tuition fees will only add more problems to Americans universities; thus should not be allowed. Secondly, those against free university education policy maintain that the move should be rejected in totally because it will not be good for the American economy which has just began to recover from the recent economic crisis. According to Billing (2014), offering free university education will be too costly for America as the government will have to allocate billions of dollars to universities to enable them run effectively. Accordingly, this might force the government to increase taxes to raise more funds to run free university education, a move that will burden Americans. For instance, Sweden and Denmark has been forced to increase taxes on basic commodities in order to offer its citizens free university education (Billing 2014). As such, some economists and liberals are encouraging the Obama administration to allow universities to continue charging school fees and only help those students from disadvantaged families who are not able to pay for their university education. In conclusion, education is critical for the development of a civilized society. In most countries, education is regarded as a right for everyone, thus should be provided by the government. Most nations currently provide free primary and secondary education because it is considered a right. Although there has not been any controversy about the provision of free primary and secondary education, there has been a disparity regarding the provision of free university education. Currently, only three countries have successfully implemented the policy of free university education for all. The countries include Germany, Sweden and Denmark with many others considering making a similar move since education is regarded a merit good. Unfortunately, the move to provide free university education has attracted a strong debate, which centers mainly on it economic implications. Proponents of free university education have argued that the move is good for a country like the U.S. as it will ensure the production of many skilled workforces, which will enhance innovativeness and productivity, minimize joblessness, as well as enhance equality of opportunities. On the other hand, critics of free university education argue that the move would be a bad one as it would put universities into financial difficulties, as well as the fact that it would be costly to the government to offer free university education. This implies that the government might be forced to increase taxes, which will overburden the poor. Therefore, it would be important for American education stakeholders and policy makers to come up with the best education policy that would be beneficial to the U.S. economy by factoring both the arguments presented by the proponents and critics of the free university education. References Billing, S 2014, Free universities and no student loan debt is hurting Denmark's economy, Business Insider 18 June, viewed 22 June 2015 http://www.businessinsider.com/free-universities-and-no-student-loan-debt-is-hurting-denmarks-economy-2014-6 Clawson, D., & Page, M 2012, The future of higher education. Routledge, London. Hettinger, T 2014, Should university education be free? 2 March, viewed 22 June 2015 http://www.economicshelp.org/blog/949/economics/should-university-education-be-free/ Iacobucci, F., & Tuohy, C. J 2005, Taking public universities seriously. University of Toronto Press, Toronto. McMahon, W. W 2010, Higher learning, greater good: The private and social benefits of higher education. JHU Press, London. Pirie, M 2015, Economic nonsense: 47. The state should pay for university education because it benefits society 14 April 2015, viewed 22 June 2015 http://www.adamsmith.org/blog/economics/economic-nonsense-47-the-state-should-pay-for-university-education-because-it-benefits-society/ Samuels, B 2011, Why all public higher education should be free, The Huffington Post 18 November, viewed 22 June 2015 http://www.huffingtonpost.com/bob-samuels/why-all-public-higher-edu_b_1099437.html Samuels, R 2013, Why public higher education should be free: How to decrease cost and increase quality at American universities. Rutgers University Press, New York. Read More