By Mary Anne Winslow According to a recent survey, many sixth-formers could experience money trouble by underestimating the cost of life at university. The survey which interviewed over 500 sixth-formers and 1700 university undergraduates was conducted by Nat West Bank. It found that sixth-formers had no idea about the real costs of college life.The question of whether we should subsidize postgraduate education isa matter of weighing up the costs and benefits. There would be manybenefits, but do they outweigh the costs? One of the first points to make is that this subsidy would lead to ageneral increase in income larger than the size of the subsidy. Thisrise would of course mean a rise in income tax revenues. During arecession, the subsidy would help to induce growth by automaticallyincreasing government expenditure. Scotland’s economy is blighted byhigh unemployment and low productivity and many of the policies set upto change this have not worked. An increase in postgraduate educatedindividuals could reverse this trend through creating new jobs,raising levels of skills and attracting companies from abroad toset-up here. By increasing investment in Scotland’s universities their quality canbe raised so that the research that they do is up to world standard.Such a result could have knock on effects to other areas of thecountry as well as to those receiving the improved education. Thoseachieving the qualifications would see their potential income increasea lot. Currently, postgraduates can expect around 20% more than simplegraduates. An increase in Scottish postgraduate research should create andattract new cutting edge companies who will employ a higher skilled,better-educated workforce. Scotland has started losing out to lessdeveloped countries in terms of low skilled jobs so to reverse this itneeds investment that will regenerate its workforce. The question of how to fund this is clearly a tricky one as there aremany other deserving places for government spending like health andprimary/secondary education. Making the decision to use governmentspending would then involve looking at tax rates, which again wouldnot be popular with the general public. Achieving this funding may bebetter attained from the private sector through incentives such as taxbreaks subsidies to the firms themselves. This would ensure that onlythe most productive courses were invested in. However, the incentivesmay not be enough to vastly increase postgraduate participation, andemployers may continue to simply hire individuals who have paid fortheir own education. However, the government does not want everyone tobe a postgraduate, as the value of each extra postgraduate decreasesas participation increases. One of the main aims of the Scottish parliament is to attractinvestment from abroad. A well-educated workforce attractsmultinational companies, and multinational companies help preventstudents educated here from moving abroad. An increase in home grown hi-tech companies is always an objective.With increased research and better universities this is possible. Infact our universities may lead the way taking advantage ofintellectual property rights over more extensive research. TheScottish parliament can promote enterprise in other ways, for exampleby increasing funds available to start-up companies. However, it isdoubtful that this would have the same impact. Although there are many advantages of the proposed subsidy, with eachbenefit that a postgraduate education brings there seems to be otherways to achieve the same result. The task for policy makers is todecide the right path to choose.An initiative to subsidize postgraduate education in Scottishuniversities would involve quite substantial expenditure by theScottish parliament. However, improving comparative advantage is animportant goal. In this essay we present a cost benefit analysis ofsubsidizing postgraduate education, and look at the long-termimplications for Scotland. One of the initial considerations is that of fiscal stimuli. As withany increase in government spending, there would be a correspondingincrease in output. The increase in output would be larger than theinitial investment due to the multiplier effect. Output equals income,and thus there would be a general rise in the level of income. Thisidea is explained in more detail later on. Higher education researchalso indicates that postgraduates are more socially cohesive andintegrate better into society. A subsidy on postgraduate education would also act as an automaticstabilizer. The reason for this is that when graduates enter theworkplace, say during a recession, and find that they can’t get a job,they are more likely to consider a postgraduate degree. Firstly toimprove their attractiveness to employers, and secondly to use theirtime more productively than claiming benefit. Furthermore, ifpostgraduate education were subsidized by the government, workers whowere made redundant would use the opportunity for self-improvement. Subsidizing postgraduate education may also improve the quality ofuniversities in Scotland. Many universities in the U.S.A. use theirpostgraduates and researchers to innovate, and as a result benefitfrom the intellectual property rights on these products. High profileuniversities would attract foreign students who would bring diversityand money. In addition, students often benefit from having studied avariety of subjects at university. “Senior executives and policy makers themselves often refer tonon-technical aspects of their university education as seminal totheir own success in the labor market and beyond” Higher education does not necessarily increase the productivity of graduates,but rather serves as a screening mechanism for private enterprises.The higher productivity of graduates is really attributable to their greater ability. Therefore many argue that the private sector should share the burdenin developing postgraduates. Students would get to study for aqualification that will improve their ability to do their job andadvance their career prospects and their employer benefits from abetter-qualified, more productive and better-motivated employee. Employers could be encouraged to do this through tax or cashincentives. By producing tax incentives to firms to fund employees onpost grad courses, we let the market decide what it finds mostimportant, and at the same time help fund the students that itbenefits from. Otherwise the government would be paying to trainstudents that the private sector most gains from. However, there isthe free rider problem. Why should a firm pay to educate an employeewhen they can hire one already educated by the government? These figures imply that the subsidy would decrease unemployment.Furthermore, if students further themselves and get better jobs thisleaves jobs open further down the income scale for those that don’tcontinue their studies. This would have a knock on effect down the jobladder and reduce unemployment nationwide, further increasing incometax revenues. What about Scotland specifically? Scotland’s economic growth isconsistently below that of the UK. In order to make Scotland morecompetitive we must focus on technology, innovation and productivityimprovements and the need to transfer knowledge from the science andengineering base into the market place. This subsidy might shift thebias of postgraduates from foreigners to Scottish people. By creatinga large and more productive labor force, Scotland can make it veryattractive for technology and science based firms to locate here.Also if postgraduate students are attracted from abroad, and decide to stay, then this could help with our aging population problem. But what are the costs, and would this initiative be worthwhile? Firstwe must consider the number of different ways in which we couldsubsidize postgraduate education. The most obvious is for parliamentto pay the fees for any one who wishes to study a postgraduate degree.Alternatively, the government can offer the private sector tax or cashincentives to fund postgraduate courses for employees. Either way, theparliament would have to find the money by either redistributing fromother areas, or borrowing more, or an increase in taxes. It isimportant to note here that the Scottish executive does not have thepower to borrow privately and so would have to either lobbyWestminster for more funding or redistribute its budget. It can onlyraise income tax by 3 pence. However, what if the supply of postgraduate places is inelastic. Forexample, it may take large increases in wages to entice moreprofessors into the industry. Then the price of each place could soarand the Government would find it hard to meet its commitments. Many economists see human and physical capital accumulation along withtechnological progress as the key to economic growth. However, if thesubsidy were effective in attracting more postgraduates, Scotlandwould experience diminishing marginal productivity of the investment.In other words, for each additional postgraduate the marginal returnsdecrease. This is represented in the graph below. In terms of theindividual the comparative advantage of an individual postgraduateover the rest of the workforce will not be as much as before.Postgraduates would not be as exclusive anymore. In the long run, apost grad could become as necessary as a degree is today. The impact of educating the population has been studied by Barro andLee. They found a positive relationship between education andper capita GDP and confirmed that there is diminishing marginalproductivity throughout the education system. One reason is that postgraduate education is more expensive per capitathan secondary education. This is backed up by Psacharopoulos.Primary education results in the biggest returns with a world averageof 18.4%, whereas secondary education give 13.1% and higher educationonly returns 10.9%. We therefore assume that postgraduate education islikely to give even smaller returns on investment, especially inBritain, where there is such a large difference between the cost of adegree and a post grad. The production function explains that output is a function of capitaland labor. We can apply this idea to this Scottish economy. Byincreasing the amount of educated labor (postgraduate subsidy) we canincrease output, but only to a certain point. There is diminishingmarginal productivity, unless, we increase the amount of capital aswell. The way to do that is attract FDI and encourage enterprise inthe domestic economy. By doing this we can maximize the gains from thesubsidy in postgraduates. Diminishing marginal productivity might affect whether the governmentgoes ahead with this investment because it might not have the desiredresults for Scottish productivity. Of course the government will alsohave to take into account the social and private gains from theresearch that is done by postgraduates, such as intellectual propertyrights as we mentioned earlier. This is a key aspect of the costbenefit analysis because not only do postgraduate courses improve thelabor force, but also their work is often directly related toimprovements in the industry. Thirlwall (add date) states “Education is one of the most importantinputs into R&D and for attracting FDI”. There are a lot of otherfactors that will influence whether subsidizing postgraduate educationhas the effect of increasing FDI. Scotland currently enjoys favorableconditions for FDI such as low corporate taxes and English as a firstlanguage. Scotland’s brain drain problem is not a new one. Educated Scots arelured south and abroad by higher wages and more opportunities. Sosubsidizing postgraduate education may not produce the desiredincrease in educated labor. A policy of tax incentives or subsidiesto attract FDI in conjunction with the postgraduate scheme would helpkeep Scottish students home and attract others from abroad. However,the two at the same time may be a little too much for the Scottishparliament to fund long term. If the price of postgraduate courses goes down then there will be anincrease in demand. In the long run this should result in an increasein capacity, as long as the government maintains its level of perstudent funding. An equal increase in supply and demand would mean thecosts of postgraduate education would remain relatively stable.However, an inelastic supply of professors or even facilities wouldsee costs rise. In the short-run the potential 20% increase in earnings for men and34% increase in earnings for women should increase demand for postgrad courses. In the long run, however, it is unclear whether thiswill benefit Scotland’s productivity or not. A general rise in incomecould mean the loss of a comparative advantage in the price of labor.However it is likely that Scotland would find itself with abetter-educated population and comparative advantages in new areas. There may be better ways to improve education like spending more onschools, increasing the quality of secondary education so that whenpeople reach university level they have covered more material.Following that, the degree programmes could be improved. This wouldalso have a positive impact on productivity without forcing morestudents into costly postgraduate degrees. Perhaps the money would bebetter spent on improving vocational training in colleges. In conclusion, the subsidy would induce a general rise in income.Extra funding for universities would improve Scotland’s most valuableasset, and help them create a world class labor force. Unemploymenthas been the bain of Scottish society for 30 years and this policywould go a long way to addressing that problem. However, there are some practical issues of funding. Without otherdepartments suffering it could prove difficult to give the policy thefull backing that it deserves. In addition, we can find more value formoney in improving primary or secondary education. So while the ideaof improving productivity makes sense, we conclude that this may bebetter achieved either through partnership with the private sector orimproving other areas of the education system. It is for policy makersto decide which one to choose. Mary Anne Winslow is a member of Essay Writing Servicecounselling department team and a dissertation writing consultant. Contact her to get free counselling on custom essay writing. Article Source: http://EzineArticles.com/?expert=Mary_Anne_Winslow http://EzineArticles.com/?Postgraduate-Education-and-whether-it-should-be-Subsidized&id=313560 incest sex move mum kids incest free forced incest stories erotic incest stories sister
