Benefits, Costs, and Equity
OFTEN, the question of financing higher education is examined from the point of view of what is “equitable”: How much of the cost should be borne by the recipient, and how much by the rest of society? I suggest, however, that the more useful question is a different one. If we view the formal education system as a process in which skills are created, then we can ask: how can the decision about extent and kind of formal education be such as to maximize the difference between the total benefits realized and the total costs incurred, whether those benefits and costs are to an individual or to others in the society? For the question about how the costs can be equitably berne cannot be satisfactorily answered: insofar as the education leads to economic benefits greater than the costs, these benefits ordinarily accrue both to the person who receives the education, through his ability to obtain a higher income, and to others in society through his additional contribution to productivity. [1] Thus the question becomes one of how this gain should be shared, a question which is unanswerable on grounds of equity. It is useful to note that the criteflon of equity of costs can have unintended consequences. In medical education in the United States, scholarships have always been fewer than for other areas of professional or graduate education. This can be, and has been, justified on the grounds that the subsequent income of physicians is considerably higher than that of other professionals. But one consequence has been to restrict medical education more nearly to children of high-income families, than is true in other professional training.
