The Importance of Public Investment in education

I know it must seem strange to realize that there are people who will debate with you on the importance of education. It must seem strange that there is indeed contention on whether education is important, or a contributor of growth and prosperity. Look no farther friends. You need only to find a Republican, and you’ll likely find someone who will tell you college is a waste of money or time.

For most Conservatives, if you cannot afford to purchase it on the “Free Market” you didn’t work hard enough for it and you don’t deserve it. Education is another primary example. They are often happy with the concept of the least well off having the most important springboard to opportunity cut off from them – education. But education, primary and secondary, as well as post secondary are not mere private goods that are consumed for one’s own benefit. Education is one of the most finished examples of a public good that confers positive spillover effects upon the rest of all of society that are not captured by market signals alone. Everyone, rich people and poor alike, benefit from a society where people aren’t dumb. Prosperity is predicated on an educated populace. If more Conservatives were educated themselves, they would know this, but here we are. This section intends to cover the value of education as it relates to all of society and economic growth, and make the argument that it is a public good deserving of public investment providing opportunity to all – not just the rich.

Basic Arguments

Your debate will start out something like this: A liberal position will support the empowerment of a group of people or society as a whole via public funding of education. A selfish conservative will start bitching that it is not his responsibility to pay for your education, or your kids, or someone elses. It’s their problem, their responsibility, leave him and his money out of it.

Once again, we can appeal to the premise of pretax income. The money that he earned was not in a vacuum. The society that he grew up in and enjoyed the ability to produce and prosper in was built upon generations of prior investments in infrastructure and education. He should expect to pay back to some extent into the system that was bequeathed to him.

Education and research, and the technology and productivity that we enjoy from it, can be considered self financing in that we receive back in increased growth the money we spend into education. It is not spending, it is investment. Education and the increased effects of production from research and innovation are positive externalties that one enjoys whether they pay into the system or not. In this regard, Education is a public good.

People that fail to make it at all, or wind up requiring assistence from lack of earning power will require a call on the public treasury anyway. So then you’ll be bitching and complaining about the EBT cards and TANF. College and education is a means to empower these people away from this life, and into a more successful one. Don’t you want that? Less people on the public rolls? You’re going to complain about people not working getting public aid. So then they get a job and aren’t making enough to get by or support their family, and you’re going to bitch about them asking for a higher minimum wage. So they want to empower themselves through education and training to get a better job, but you’re going to bitch about having to pay for education. Since people are not going to stop having kids, no matter how much you bitch, some people will require either 1) Assistence, 2) college, 3) higher min wage. You wont’ give them either. What do you plan to do that will keep you from bitching? More money for the wealthy through tax breaks? We did that, and they invest in speculative bubbles or just get richer, without the commensurate job creation.

Move next, of even first to the arguments from American Amnesia, which are fantastic, found on page 84.

“Perhaps the most important thing that big states do is educate their citizens. Modern growth commences when people rapidly increase their ability to do more with less. They can do more because they know more; they have mastered skills and technologies that allow them to be more productive. Indeed, economists who have tried to break the Solow residual into its constituent parts have concluded that roughly a third of rising productivity is tied directly to increased education, with most of the rest due to general advances in knowledge.” (1)

(1) Sources of U.S. Economic Growth in a World of Ideas (paper saved)

Outside of a smoking gun empirical data set knowing school leads to growth, here is a passage with soft economic evidence that governments that educate their citizens lead to greater growth. You can frame the argument with a question, “Can you demonstrate that modern economies grow faster and are educated better through systems of privatized education and no public support?” Of course they cannot, since no such countries exist and so they will say that’s not the point, it still doesn’t justify coercion or forcing me to pay for someones education or subsidizing laziness or whatever horseshit excuse they come up with. Then you can reply “So would you rather have lower growth, and overall less money to spend on fewer goods after taxes with no public education, or public education, higher growth, and more money to spend on more goods after a little more taxation?” and furthermore adding up with “Do you want a higher quality of life and more money, or a lower quality of life and less money just to avoid helping people?” If they pick the latter, then its simple. “So you aren’t concerned with the country or making it better off, you’d rather everyone be worse off just because your’re mad about people able to go to college. ” Then its “Thus, why Libertarianism is a child’s fraud. They’d rather everyone be worse off by throwing a tantrum about taxes and getting more. This is not a way to grow a country. Libertarianism has admitted, outright, to being a school of thought supporting lower growth and lower quality of life through expanded economic wealth and opportunity. They are willing to make the country worse to win some point about taxes.” So there’s the main argument for people constantly bitching about public education, and more often, “free” public college. 

“Yet even this understates the role of education, since improved education gives an enormous boost to those advances in knowledge, fostering a scientific community and educated population capable of contributing to innovation and growth. (2) Formal schooling probably plays the starring role, for instance, in the so-called Flynn effect—the generation-to-generation rise in IQ scores in industrialized societies documented first by the political scientist James Flynn. (3) The machinery of our brains hasn’t changed. What has changed is our capacity to use that machinery for higher-level cognitive tasks, especially those involving science and technology. And again and again, studies find schooling to be a major, often the major, factor in this transformation. The contribution of education to the rapid growth of the twentieth century is unquestionably much larger than the substantial direct economic returns of additional years of schooling. The sustained prosperity of the West was built, in significant part, on the school ground.”

(2) Ibid, pg 226.

(3) The Mean IQ of Americans: Massive Gains 1932 to 1978 (not yet linkable)

(4) Rising mean IQ: Cognitive demand of mathematics education for young children, population exposure to formal schooling,
and the neurobiology of the prefrontal cortex  (paper saved)

“And not just any school ground; the public school ground.104 As one conservative notes ruefully, “Schooling is publicly provided by every nation. Such a unique position is shared only by a very limited range of goods: national defense, courts, police, and roads.”105 To this commentator, the hegemony of public schools is strange because, after all, there are and have long been private schools. But for reasons well understood by generally market-appreciative thinkers from Adam Smith to Milton Friedman, mass schooling has never occurred in the absence of government leadership.106 The most fundamental reason is that education is not merely a private investment but also a social investment: It improves overall economic (and civic) outcomes at least as much as it benefits individuals. Ultimately, only the public sector has the incentive (attracting residents, responding to voters) and the means (tax financing of public schools, compulsory attendance laws) to make that investment happen.”

Research Papers

The Causal Impact of Education on Economic Growth: Evidence from U.S.

Your main contention will be similar to something like this:

Should countries or regions (generically, “states”) invest more in education to promote economic growth? Policy makers often assert that if their state spends more on educating its population, incomes will grow sufficiently to more than recover the investment. Economists and others have proposed many channels through which education may affect growth–not merely the private returns to individuals’ greater human capital but also a variety of externalities. For highly developed countries, the most frequently discussed externality is education investments’ fostering technological innovation, thereby making capital and labor more productive, generating income growth.

A very deep paper requiring a lot of study, you can gain some useful data points sufficient for debate here. You won’t be able to use the whole paper and all of its data and figures – as arguing differential equations on facebook or a dinner party is implausible – but you can get what you need with a few well placed points.

“On the whole, the results shown in Table 3 support the notion that at least some education investment has a positive causal effect on growth.”

7.4 – In short, patenting–an intermediating variable that directly measures innovation–suggests that at least one mechanism by which high brow education affects growth is the creation of new technologies. This inventive effect is seen, however, only in U.S. states midway to the technological frontier.

8 – We find support for the hypothesis that some investments in education raise growth. For the U.S., where all states are fairly close to the world’s technological frontier, we find positive growth effects of exogenous shocks to investments in four-year college education, for all states. We do not find that exogenous shocks to investment in two-year college education increase growth. This suggests that the money would used equally productively elsewhere. We find that exogenous shocks to research-type education have positive growth 39 effects only in states fairly close to the technological frontier. In part, this is because research-type investment shocks induce the beneficiaries of such education to migrate to close-to-the frontier states from far-from-the-frontier states. Put another way, Massachusetts, California, or New Jersey may benefit more from an investment in Mississippi’s research universities than Mississippi does. Finally, we show that innovation is a very plausible channel for externalities from research and four-year college type education. Exogenous investments in both types of education increase patenting of inventions

The Economics of Higher Education 


Higher education is a critical mechanism for individual socioeconomic advancement and an important driver of economic mobility. Moreover, a well-educated workforce is vital to our nation’s future economic growth. American companies and businesses require a highly skilled workforce to meet the demands of today’s increasingly competitive, global economy. Higher education is provided through a complex public-private market, with many different types of individuals and institutions participating.


The results of this study demonstrate that America’s community colleges create value from multiple perspectives. The colleges benefit U.S. businesses by increasing consumer spending and supplying a steady flow of qualified, trained workers into the workforce. They enrich the lives of students by raising their lifetime incomes and helping them achieve their individual potential. They benefit society as a whole in the U.S. by creating a more prosperous economy and generating a variety of savings through the improved lifestyles of students. Finally, they benefit federal, state, and local govenrments through increased tax receipts across the U.S. and a reduced demand for government-supported social services.




We Are Better Than This: Page 289

Everything for Sale: Page 191 (Markets Innovation and Growth)

American Amnesia: Page 84 (Grade Inflation)


Study: Income Gap Between Young College and High School Grads Widens
“A college degree is increasingly valuable, in part because a high school diploma is less and less so.”

This is a tool you can use to demonstrate a single, individualized argument for the merits of college. One of the most important premises for public spending on education – the use of tax money – is that is it justified by virtue of conferring positive externalities to society as a whole. In this regard, it is self financing and everyone makes more money in an educated society. For that, you will need macroeconomic data, and this article will not support that point. But, it can serve as  a springboard to demonstrate that education is a wellspring for freedom and opportunity. If the argument is framed in that way, this can be helpful, and get you off to the races on widening the importance from the individual to society as a whole.

The Great Stagnation of American Education (Very Good Article)

For most of American history, parents could expect that their children would, on average, be much better educated than they were. But that is no longer true. This development has serious consequences for the economy.

The epochal achievements of American economic growth have gone hand in hand with rising educational attainment, as the economists Claudia Goldin and Lawrence F. Katz have shown. From 1891 to 2007, real economic output per person grew at an average rate of 2 percent per year — enough to double every 35 years. The average American was twice as well off in 2007 as in 1972, four times as well off as in 1937, and eight times as well off as in 1902. It’s no coincidence that for eight decades, from 1890 to 1970, educational attainment grew swiftly. But since 1990, that improvement has slowed to a crawl.

Companies pay better-educated people higher wages because they are more productive. The premium that employers pay to a college graduate compared with that to a high school graduate has soared since 1970, because of higher demand for technical and communication skills at the top of the scale and a collapse in demand for unskilled and semiskilled workers at the bottom.