Socially Desirable Merit Goods - Essay Example

 Introduction Merit goods are those goods that if left in the hands of free market players then it may be underprovided hence dissatisfying the public. The only way to ensure quality is when these goods are provided by the government because the government does not take into account private costs and benefits as in the case of the private businesses. Some of the examples of the merit goods provided by the UK government are Fire service, Health and Education. Education can be underprovided if private schools and Universities are left with the responsibility. Everyone should benefit from education regardless of financial capabilities but private schools and universities may only allow people who can afford the cost of education to access their facilities. Private schools may not consider the long term benefit of education as the government does. This report discusses education as one of the merit goods provided in UK. Summary Government has the responsibility of providing education to all the citizens as a way of ensuring that everyone has equal opportunity in accessing education. Methods/ Procedures The resources used in this report are books and other scholarly materials. The government has the responsibility of ensuring implementation of expended schools initiatives and provision of financial support to schools to facilitate smooth learning environment. The government also has the responsibility of providing public schools with recreational facilities and further gives better education opportunities to all children. UK government must ensure that every child gets quality education with a very good start and further helping schools in delivering education strategy. Mainly the government has to ensure that schools have good infrastructure and provides students with better skills. The government should ensure that education provided to the public is very beneficial, effective and universal to all the learners. The intention of providing education by the government is to equip learners with high level skills that are relevant to the betterment of the economy and instilling skills that are useful in the modern life (Brewer & Mcewan 2010, 303-304). Government should ensure enough funding especially in the universities and colleges due to the importance of graduates in the economic growth. According to OECD report studying for a degree greatly benefits individuals because they earn a lot of money compared to non-graduates. University graduates also benefits the governments from the high taxes earned from higher earnings by the graduates. The report further suggests that the educated individuals were never affected by the economic crisis as it affected the uneducated. The economic crisis and recession was caused by unsuccessfully educated individuals. The government should subsidize higher education since university education is important to the UK’s economic recovery because it leads to receipt of high taxes and reduced level of unemployment. All these show the unending benefits of education thus justifying why it cannot be left on the hands of private sector. Educated people get good employment and earn good money compared to uneducated individuals. Learned individuals also acquire knowledge and skills that help them in rational thinking and decision making process thus reducing risks of economic crisis and recession. University education is considered vital in individual’s innovation capability due to the knowledge acquired (McMahon 2009, 180-200). There are several benefits to governments and society that result from studying for a degree such as increased receipt of taxes and social cohesion. University graduates assist individuals in obtaining lucrative jobs thus reducing the level of unemployment in the country. The employed persons will reduce the level of crime in the society because most people are able to economically sustain themselves. Graduates always acquire skills and knowledge that may help them make wonderful innovations that are crucial for economic development (Piatt 2012, n.p). The fact that higher education should be subsidized by the state is criticized by many because they feel that not all returns got from university graduates are as a result of the university degree received. Some of the extra benefits gained from higher education are not as a result of education particularly higher education (Teixeira 2004, 333-335). Education can be provided by private sectors although at a higher cost compared with the government or public schools. Private sector’s main intention is profit incentive and cost cutting unlike the government schools which are not profit oriented. Provision of education by private sector can be very expensive to the parents due to the profit motive of the private schools which prompt them to increase fees. However, private schools normally offer very high quality kind of education compared to the state schools hence making only the rich to take their children to the private schools because they can manage the high fees charged. Private sector can provide very nice schools but the biggest problem is that these schools may not be affordable to the poor. If issues of schools and education at large are left in the hands of private sector by the government then not everybody may get education (Brewer & Mcewan 2010, 303-304) . Education may just be purely business where owners of schools attempt to cut cost and maximize their profits. This would imply that only the haves will manage this important resource in one’s life. This may have a very bad impact on the country’s economy where only the few educated from private schools run the economy. The few rich individuals may further mean less employment opportunities and high dependency level. Due to importance of education, it should be left in the hands of the government. However, provision of education by the government may lead to poor delivery because the government may not have proper control on the state owned schools compared to private schools. Government owned schools may have surplus teachers which are very expensive to tax payers unlike private schools which may have lean and effective number of teachers and even pay tax as a school (Teixeira 2004, 333-335). Results There are a number of positive external externalities associated with education. When many people are educated, the level of economy will rise because there will be a high number of educated individuals with vast skills. Educated individuals may be able to provide the best workforce that may increase the growth of companies. Increase in performance of companies may further boost their revenues and make the government to benefit through taxation of the companies and employees. Tax revenue may then be used in providing of services to the society and even used for security measures around the country’s borders. Moreover, education may provide skills and knowhow that may help individuals to be self-employed and help their families. Employed individuals may reduce idleness and eventually reduces crime rates. The standard of living of the people who have gained quality education and their families will definitely go high because they have their sources of money and low unemployment rate. Educated individuals normally gather knowledge which may boost political participation and eventually good governance in the society (McMahon 2009, 180-200). Discussion of Results Living education to be controlled by mechanisms of free market may lead to failure of the market since not everyone will get access to it. Free market may not allow satisfaction of the society with education and therefore it may create an incomplete market. It is therefore evident that supply of education by free market cannot get positive and equal consumption of the good. Information regarding demand and supply of education may not be well understood by the market players because the consumers may not even initially realize the instant benefits of education (Teixeira 2004, 333-335). The less privileged people in the society are not likely to be part of the free market consumers making the issue of supply and demand of education are hard to calculate. It is evident that even apart from positive externalities, merit goods may not be consumed as expected by the suppliers hence creating market failure. Individuals do not have the understanding of the benefits of attaining education. Students would just go to school regretting the burden of assignments and examinations without taking note of ultimate benefit of education (Piatt 2012, n.p). Conclusions It requires the intervention of the government to convince people on the benefits of education. Due to expenses related with financing education, the government has the responsibility of subsidizing and regulating education in UK. The government must employ teachers and ensure that the students get quality education. However, it is important to note that the government cannot ensure quality education amongst all the students in public schools (Teixeira 2004, 333-335). Recommendations The state owned schools may underperform and provide sub-standard quality of education due to lack of proper management and supervision responsibilities. Private schools enjoy quality and proper management which in turn leads to quality education amongst the students. They also employ highly qualified teachers who are capable of providing quality education. Privately owned schools insist on quality due to competition with other players in the education industry such as other private schools and public schools. References Brewer, D. J., & Mcewan, P. J. (2010). Economics of Education. Burlington, Elsevier Science. McMahon, W. W. (2009). Higher Learning, Greater Good: The Private and Social Benefits Of Higher Education. Baltimore, Johns Hopkins University Press. Piatt, Wendy, 2012, “OECD Education at a Glance Report,” Retrieved 11 May, 2013, . Teixeira, P. (2004). Markets in Higher Education: Rhetoric or Reality? Dordrecht, Kluwer Academic Publishers. Verma, Manisha, 2013, “UK vs. USA: Which Is a Better Option to Study Abroad?” Learnhub, Retrieved 11 May, 2013, . Read More