Monday 10 October 2011

Monday 10th Oct

1)What information failures are there in the market for higher education places?
-  One example of information failure is the quality of teaching in each university as you can not tell until you are there. Some may argue that the harder it is to get into the better the quality of education is but this will not always be the case, and as the prices have gone up massively this is extremely important as the consumer will want the most they can get out of the university. This means the consumers are not seeing the true costs and benefits of university. Some of the information failures have been reduced with polls and statistics such as student satisfaction and average starting income but to get these you have to search around. So unless people do this they are very unaware of the universities they may be applying to.
2)What externalities are involved in higher education and will this lead to an over or underprovision of higher education in a pure market system?
-  There are both negative and positive externalities in higher education. The positive externalities are pretty simple, the work force becomes much more adaptable and skilled. This means the economy can change to suit the markets needs quickly creating better and more stable economic situations for everyone involved. The negative externalities are less simple. One example is the amount of alcohol consumed during not only freshers but the enitier studying period. This leads to direct costs such as violence and inappropriate behaviour, but more importantly the long term health issues that everyone as a tax payer has to pay for. Even so I would say the positives out weigh the negative by a huge distance which means higher education can be seen as a merit good, therefore under consumed.
3)Apart from externalities and information asymmetries, what other market failures apply to the market for student places in HE?
-  The most obvious aspect is inequality, this is due to the wide range in income levels around the UK and the increase in tuition fees. For families on very low incomes university will seem like an impossible dream to them. People will argue that the government offer them loans that they don't have to pay back until they are earning a certain wage. For those who want a degree in something that will eventually still pay a low wage then the debt upon their heads will be a huge inconvenience they can do with out. This will in no doubt put people off going to university.
4)What are the arguments for subsidising non-STEM subjects (as well as STEM ones)? Should these subsidies vary from course to course and from university to university?

-  The government should subsidies non-STEM subjects as the subjects will be the ones that have lower potential incomes. Because of this its unfair that they should have the same amount of debt as those who will be earning far more and find it much easier to pay off. This may lead to a massive under consumption of these courses leading to a less skilled and less adaptable work force. the subsidies should vary from course to course and from university depending on their potential. If someone has a degree from Oxford then they will find it much easier to get to get a job compared to someone that studied at Bolton. This means they will find it easier to pay off the debt so their debt should be more due to the ability to pay it off. The same with courses, ones that will eventually be paid higher will be able to pay off the debt faster and more efficiently so perhaps other subjects should be subsidised more.
5)What is the best way of tackling the problem of unequal access to higher education?
- The way in which the government try to already is using grants according to their parents income. However if this wasn't enough to persuade many low paid families before the tuition fee rise, it will certainly not now. To combat this I think the government should keep these grants but increase them substantially. This means that as before where the government were subsidising everyone that went to university, thy will now be concentrating on the families who really need the monetary help and otherwise wouldn't go to university.

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