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Monday, September 26, 2005

HALF TIME SHOW 

Judge Richard Posner enters the fray sparked by the New York Times article about the work expectations of young women at "elite" colleges with his own pragmatic (some call it "loony") twist:
... the fact that a significant percentage of places in the best professional schools are being occupied by individuals [such as women who are not going to have full working careers] who are not going to obtain the maximum possible value from such an education is troubling from an overall economic standpoint. Education tends to confer external benefits, that is, benefits that the recipient of the education cannot fully capture in the higher income that the education enables him to obtain after graduation.
Less participation in the work force by professionals = fewer external benefits to society.

Posner proposes a gender-neutral solution to this dilemma, a back-door increased tuition for education "wasters":
... raise tuition to all students but couple the raise with a program of rebates for graduates who work full time. For example, they might be rebated 1 percent of their tuition for each year they worked full time.
But higher income taxes paid by higher-paid workers are only one external societal benefit we'd want to encourage. The societal costs of single parent headed families is well known. So all those hyper driven law firm partners and businessmen who shed their first wife and family should forfeit their 1% rebate. Furthermore, as Posner himself points out, a good education can act as a "hedge against divorce or other economic misfortune." Avoiding the costs to society of impoverished families is an external benefit as well. So women who return to the work force to support their families after divorce or widowhood should get an additional 1%. How about a half percent to post-grads who stay married in the first place?

When do the transaction costs of administering such a rebate program exceed its benefits? Pretty quickly, I'd say. If you want more women to work despite being married (with or without kids), it'd be easier to just get rid of the "marriage penalty" tax.

1 Comments:

Judge Posner demonstrates gross economic illiteracy.

First, he treats higher education as if it is a scarce natural resource instead of a marketable commodity. The role of those non-productive education wasters has multiple economic benefits.

1. Women (assume women, as this is often the case) in college meet men who are getting educated and will have higher earning potential, thereby improving their on wealth potential.
2. Time wasting students are using up parents' unproductive wealth, putting it back into circulation.
3. Money spent on education (wasted or not) employs educators, administrators and support staff.

If education wasting is a problem, why not start the solution by eliminating education money/time wasting curricula (ie education in education, most sociology, women's studies, ethinic studies)?

By Blogger Insert-Name-Here, at 9:39 AM  

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