ECON 133 Lecture Notes - Lecture 7: Market Failure, Normal Good, Social Mobility
Document Summary
Education has a unique role in ensuring lr growth. If we can estimate education we can provide need for government intervention. Largest expenditure item in state and local government. Spending is more for education in us but other countries perform better. People will be more rational and more politically stable. Postive ext in consumption shifts the demand out. Failure of credit market to make loans that raise the total social surplus. Paternalism - gov makes better choice than individual for choosing level of schooling. Redistribution - as long as education is a normal good, higher income families would more education. Probabilities of being in the same quintiles are your parents. 2nd and 3rd have more prob of being somewhere else. Measuring the returns to education is a key but difficult (empirical question) The benefit that accrues to society when students get more schooling or schoo higher quality environment oling for children ould demand chooling from a higher quality environment.
