26.6.06

WE GET REFEREE REPORTS. Tom at Marginal Utility dissents from my summary of James Lileks.

Uh, sure.

BTW, that's Prof. Karlson of Northern Illinois University, beneficiary of the late liberal society's crazy idea that higher education for the masses is worthwhile.

Uh, not quite.

BTW, that's Prof. Karlson of Northern Illinois University, who has burned a lot of neutrons on this site in defense of the somewhat crazier idea that higher education for the masses ought to be, well, higher education.

Surely Mr Bozzo is not encouraging loyalty oaths for state university employees?

Or ought someone at the American Economic Review have recommended against publication of W. Lee Hansen's "Income Distribution Effects of Higher Education" (link requires JSTOR membership) because the knowledge that "higher education for the masses" was the slogan and "regressive transfer" was the reality was not something a beneficiary of the idea ought be making public?

Or should faculty at Wisconsin have dissuaded Professors Hansen and Weisbrod from further investigating the incidence of that regressive transfer? "On the Distribution of Costs and Benefits of Public Higher Education" appeared in the Journal of Human Resources in 1969. Although that issue has not yet been converted to online storage, their 1971 reply is online, with this lede.
Should economists still believe that their journal articles remain unread and even if read, politely ignored, our recent experience should quickly disabuse them. The Journal of Human Resources has already published five comments on our paper, and prepublished copies of at least two of the comments (by Joseph Pechman and Ira Sharkansky) have made their way to and through Washington officialdom, the higher education establishment, and our own university administration. These developments suggest that our results may have hit a more sensitive nerve than we had suspected by calling into question an important part of the folklore about higher education's role in income redistribution.
The debate continues. Here's a communication from 1975, and a clarification of the empirical issues from 1977.

On to the substance of Mr Bozzo's objection.
Anyway, demand curves sloping downwards and all, why would you want to signal — by exposing students to more of the cost of their education — that people should be investing less in their human capital?
Three possibilities. One, the Hansen-Weisbrod line of research suggests that the state subsidy is a regressive transfer. Thus the beneficiaries of the subsidy have a greater ability to pay: under one principle of public expenditure that suffices to require them to pay; under another principle to not require them to pay is vertically inequitable. Two, Cold Spring Shops maintains that the subsidies encourage inefficiently optimistic enrollment leading to an intolerably low completion rate. Three, the Wall Street Journal from time to time suggests a principal-agent argument, in which students are less likely to gripe about classes and textbook prices as long as somebody else (to consistently apply the vertical equity principle they ought consider absentee parents writing child support checks) is picking up the tab.

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