Government's Role in Primary and Secondary Ed
Which of the following is NOT one of the main economic rationales for government intervention in primary and secondary education?
a) Imperfections in the capital market
b) Positive externalities generated by education
c) Altruistic motivations toward children
d) Increasing teacher salaries
d) Increasing teacher salaries
This is the dominant mechanism for local school funding in the US
property tax
According to the article, which type of externality from education is considered more persuasive in justifying government intervention?
a) Second-best externalities
b) First-best externalities
c) Tax-related externalities
d) Social safety net externalities
b) First-best externalities
What is an advantage of property taxes as the source of school funding
they are a steady and predictable source of revenue
What does Rauch's research on human capital in cities suggest about the social return to education compared to the private return?
a) The social return is about half the private return
b) The social return is equal to the private return
c) The social return exceeds the private return by a factor of roughly 1.7
d) The social return is negative while the private return is positive
C) Rauch finds that the average level of education in a standard metropolitan statistical area (SMSA) has a significant, positive effect on both wages and rents. His estimates suggest that “each additional year of SMSA average education can be expected to raise total fac- tor productivity by 2.8% with a standard error of estimate of 0.8%.” The estimates also imply that “the social return [to formal education] exceeds the private return by a factor of...roughly 1.7
What's a primary criticism of property taxes
they create significant funding disparities
What does the article conclude about the necessity of public provision of education?
a) It is absolutely necessary to generate positive externalities
b) It is required to provide a common educational experience
c) There is no clear economic rationale requiring public provision of education
d) It is the most efficient way to deliver educational services
c) There is no clear economic rationale requiring public provision of education
(page 21) Pause and Discuss - do we agree or disagree and why?
local income taxes
sales taxes
Based on the article's conclusions, which of the following best describes the current state of education policy in the United States?
a) It aligns perfectly with economic rationales
b) It focuses primarily on assisting in education finance
c) It appears to be driven by factors other than economics
d) It gives families complete control over educational spending
c) It appears to be driven by factors other than economics
Pause and Discuss - what are the factors that drive the current state of education policy?
What do reforms to school funding need to take into account
stable and adequate funding
local autonomy
equity in educational opportunities