The human-capital argument for college
education is that students purchase college education
life provides direct utility to the
degrees provide a way of demonstrating
certain traits, such as intelligence, to prospective
education increases the productivity
of those who get one.
makes students better human beings,
and thus improves society.
Several years ago (on 9-13-87), the Gary
Post-Tribune ran a story about a woman who wanted
to enlist in the U.S. Army. Even though she had a General
Education Development (GED) certificate and had scored
high on the Army's entrance exams, she was refused
because she did not have a high-school diploma. An Army
spokesman explained that past experience showed that
women without a high school diploma had a much higher
attrition rate than women with the diploma. To an
economist, this incident is an example of the:
importance of education in building
importance of the educational system
problem of moral hazard.
need to view education as a public good.