Question

Consider the following scenarios. What is the underlying argument for government intervention in the education market?

(a) A politician claims that the government should intervene in the education market to “even the playing field” for rich and poor families.

(b) A politician states that areas in which the population is poorly educated have more break-ins than other areas and that consequently, the government should intervene in the education market.

(c) A politician asserts that he wants to increase the awareness of public school options, and thus the government should intervene.

Answer 1

(a) is the correct argument. This is because education nowadays is considered a necessary good. Without government intervention, private players will charge high amount for providing education such that only the rich will be able to obtain education. Slowly it will happen that the rich are becoming more skilled and securing more jobs easily and the poor will be unskilled with poor job quality or no job. Thus the rich will become richer and the poor will become poorer. Thus it will be necessary for the government to step in and 'even the playing field' for rich and poor families by providing education and at the same time giving subsidy to private players or otherwise.

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