Thursday, 19 February 2004

State universities as an investment

Another thought on state subsidies for higher education: state support of higher education may be a rational investment by the state in it's own tax base. Insofar as students tend to stay in the state where they go to school, and insofar as people with degrees make (and spend) more money, a state university will increase the size of a state's tax base, whether through preventing "brain drain" of its own smart kids, or through "poaching" smart kids from out of state. Just as investing in a child's education may provide returns to the parents when the grateful child helps them financially in their old age, an educated population may be well a "private good" for the state itself.