Eco405

Econ 405 Assignment 2
Assignment 2: Externalities of Education
Normarie Castellon
Professor George A. Uhimchuk
ECO405 – Economic Problems & Issues
Summer Term 2012
In economics, an externality is a cost or benefit that is not transmitted through prices and is incurred by a party who was not involved either as a buyer or seller of the good or service causing the cost or benefit. The positive externalities of education include, but are not limited to, a well-educated workforce that is more competent and productive at their jobs, a higher paid workforce, as well as a socio-cultural diversity in the workforce.
A well educated work force comes from a quality education, whether public or private. A quality education will produce a better work force, making workers more competent and productive at their jobs. With a well-educated workforce, prospective employees are better equipped to handle most jobs that come available, be more in demand and also be more likely to continue their education after high school. With the world becoming more technologically advanced, having a well-educated workforce is more beneficial as these employees are able to understand the advances and work through the advances.
Higher income for the workforce means less people on government assistance and more people paying taxes, which also lead to keeping more jobs open for more people to work. Higher income also stimulates the economy, which produces more jobs because people will spend more money at businesses, causing employers to open up new jobs to keep the customers happy, while also helping more people be employed.
In public, and even some privately funded education, there are people from all races, backgrounds, and cultures. Growing up with this in schools help children, teenagers and adults learn to co-exist among each other throughout the time in school. This carries over into the workforce, helping people to be more adaptable to different situations with people from different cultures and backgrounds. Having this type of upbringing has a positive externality in itself. Having a socio-cultural education system caters to help stop racism and discrimination. Being able to grow up in school with many different cultures is both economically and socially positive.
While there are positives for both a public and privately funded school system, this writer is for the public school-system. Public schools are free for any and all school-aged children to attend, whereas a private school has applications, fees among other things for a child to attend. Public schools are also more prone to have the socio-cultural diversity in them than a private school. Public schools have multiple options for achieving the full benefits of education. These options include virtual schooling, online schooling, home schooling, and charter schools. Virtual, online and home schools approaches to education are paced to each individual student, while being a significantly lower cost than private schooling. Charter schools are designed to educate students on a specific trade that can be carried over to help find jobs suited to the specifc trade.
The socio-cultural benefit of going to a public school is that it helps students to become socially adaptable to a mass diversity of backgrounds and cultures. As the student transfers over to the world of being an employee/employer, the benefit of being adaptable to different backgrounds and cultures can help to reduce discrimination in the workplace.
References
Kling, A. (2008, August). Public Goods, Externalities, and Education. Retrieved Aug 8, 2012 from website:http://econlog.econlib.org/archives/2008/08/public_goods_ex.html
Sharp, A., Register, C., & Grimes, P. (2010). ECO 405: Economics of social issues: 2010 customedition (19th ed.). Boston, MA: McGraw-Hill.
What are positive externalities? (n.d.). Retrieved Aug 8, 2012, from website: http://tutor2u.net/economics/content/topics/externalities/positive_externalities.htm

References: Kling, A. (2008, August). Public Goods, Externalities, and Education. Retrieved Aug 8, 2012 from website:http://econlog.econlib.org/archives/2008/08/public_goods_ex.html Sharp, A., Register, C., & Grimes, P. (2010). ECO 405: Economics of social issues: 2010 customedition (19th ed.). Boston, MA: McGraw-Hill. What are positive externalities? (n.d.). Retrieved Aug 8, 2012, from website: http://tutor2u.net/economics/content/topics/externalities/positive_externalities.htm