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Lecture 18

ECON 201 Lecture 18: Special Topic Notes 11.28.2017

Course Code
ECON 201
Lynn Usher

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Special Topics
ECON 201
I. Public Elementary & Secondary Schools in U.S.
Consumers pay taxes to government
Government pays the schools
Student go to school in their district where they live
(shop for house)
2. Cross country comparison (pg. 409) U.S ranked only 12th (2009)
Not a top country based on spending per student
B. Educational spending (real) student in U.S
1. U.S Over time (measured 08/09 dollars) 1970=2008 $4269 to $10441, more than
2. In 2005, US spending/student 9.156
This is 46% more than the average of 1 countries
II. Economics & The Structure of the US Educational System
A. Public schools (primary and secondary)
1. Schools: have monopoly power- no competition
Decrease incentive to compete
Decrease efficiency
2. Consumers: have limited choices- not directly paying
B. Private Schools: consumers pay twice
1. Taxes & tuitions
Example: restaurants- hat if they eet copetitie?
a. Eat for free in restaurants in your district (paid- tax $)
C. Competitive Markets:
US Colleges & Universities- ARE competitive & results are good
a. Students have choices
b. Financial aid can be used (private or state schools)
c. US leads in the world in:
1. Variety of programs
2. High quality research
3. Quality faciality
4. % of HS graduates attending
D. Results & Conclusions
If consumers (parents) pay directly
Schools will operate more efficiently leads to: more efficient education
III. Three alternatives: Increase Competition
A. School Vouchers
1. Description:
Government collects taxes & gies each studet a cetificate ouche hich euals
cost education/student
Students choose favorite school & pay with voucher
find more resources at
find more resources at
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