Tuesday, October 12, 2010

The cost-benefit analysis on education

MiaS has just had a chap round to quote for a new boiler. He seemed smart enough, but as the part of the talk afterwards about the benefits and advantages of this proposition started to stretch on I started to brace myself for the key detail, the price. And it was just as well that I did. Ouch - I could perhaps still expect to save money over the next 10 years, but most of the benefit would be going in the cost of the a certain gas company's services. ( The fact that I might still do it shows they have their pricing point just about right. )

Today the MSM is full of horror stories about student fees being uncapped ( or to put it another way more of the fees being paid by students, less by the general tax payer. Since the general taxpayer is, I'm guessing, much poorer than graduates this is a negative redistribution which is what makes some of the left's defence of it hard to understand. They use a spurious argument about putting poorer students of University - which is an argument that fails on so many levels - including the fact its the poor the state tax collector is robbing to pay for all of this anyway.)

The Universities will need to explain the benefits of these course more fully than the "education is good guff" we normally get, and then they will have to judge from the reaction if they have their pricing points right.

Of course ( no pun intended ) there is loads of room for innovation in the tertiary education market. Cost could be brought radically down. Indeed I've seen this done twenty years ago as Aston University which instead of rolling up a dying when the Red Bricks persuaded the Govt to cut its and Salford's grant by about a third made the necessary changes and became one of the UK's top universities. ( Indeed for all those who bang on about public school types dominating University, Aston is dominated by state alumni and does very well thank you. )

Now there are factors such as reputation which mean that some Universities can charge highly for a poor product, in value terms, but where employers are still happy enough and hence it'll make economic sense to pay their high fees. But surely there is a massive gap in the market developing here for quality and value.

Wat Tyler has all the figures over at Burning our money. MiaS can remember such data coming out from the economist a while back showing the added earning potential of doing a degree. ( Hint if you a chap studying microbiology will actually damage you economically ).

There are issues about certain Universities being able to protect their real market - that for blue chip employers taking their graduates - but these could be addressed.

Its time to sober up and face facts. Tertiary education is not the universal good and benefit that has become an unquestionable article of political faith. Its time for the iconoclasts to get to work.

Update: How an arts degree can damage your life ...


Anonymous said...

This seems to refer to the benefit to individuals.
But is having mass education ( of almost any sort) not to the benefit of the country.
As for the individual there is a pleasure beyond money in doing what you like doing and have learned to do.

Man in a Shed said...

@Anon - Of course you have a point. But most of the benefit to wider society is achieved by the time people get to 18.

After that there is also likely to be a very wide divergence in any benefit to society by what subject is studied.

Ie roughly - Arts degree wast public money, maybe some science, medicine and technology ones don't - but even that's not guaranteed.

Why do people go to University at 18 rather than say 25 ?

We live in a country that is going to have to put the retirement age back for the old and exhausted, but insists that the young fit and eager continue to be lectured until they are at least 21 !

Edward Spalton said...

I just had the chap round to service our central heating boiler. He is the same chap who installed it twenty years or more ago.

Mindful of the cost of gas, I asked what sort of new, efficient boiler he would recommend.

"I wouldn't bother" he said "whilst this one keeps going. The new ones will save you money on gas but they will need replacing in five years. You will end up paying more".

Then, I read the same advice in one of the "home and garden" week end colour supplements. So I think I'll take the advice.

Man in a Shed said...

@Edward - thanks, that's a good point and one I tried to raise with the salesman at the time !