Did Europe find a cheat code that gets free $$$ for education?
Nothing is free - once you graduate you are hit with 50% tax that gets back all you "free" tuition costs many, many times over.
Not saying education should not be subsidized via taxes (I think it's good overall), but it's not free at all - the price is just hidden and spread out over many years (similar to student loans but less visible).
It does. In large part due to Baumol's cost disease - higher overall incomes in productive sector like tech drive up costs for sector with low productivity growth - so professors and admin staff in US make 2x salaries compared to Europe (cost of living adjusted). Also, have you seen EU student amenities and dorm sizes?
Is it necessary for there to be student amenities paid for by the school? Why should tuition pay for a bunch of ancillary nice-to-haves instead of, ya know, the education?
Because schools are in competition with one another to attract students (who have the ability to broadcast applications to multiple schools). The campus life factor is a major part of a student’s decision.
Put yourself into the student’s shoes. If you had the choice between two schools of otherwise roughly equal academic reputation but one offered luxurious residences while the other housed students like medieval monks, which would you choose?
Public schools shouldn't oblige and instead offer the lower cost option. The market will then sort this issue out in a few years. Right now its public = expensive and private = absurdly expensive
EU universities, the amenities are quite meager, as they should be. But for dorms it’s usually single occupancy. Unlike the US where you’re expect to have roommates.
The roommates thing is just part of the socialization of US universities, since many kids are not living anywhere near home and if they aren't forced to become close friends with someone by, say, sleeping right next to them, they often go a little nuts. By the time you are an upperclassman you are generally given your own room or you live off campus.
I've done the US university dorm living. I was already pretty well socialized being involved in many social causes and clubs. Unlike the movies, my roommate and I didn't turn into lifelong friends. Our living arrangement was strictly business. Now, I am lifelong friends with my apartment roommates. We shared a house together but did not share a room.
Also, campus ties you closer to home more than you imagine. They shutdown campus for different breaks and you're more or less forced to go elsewhere, which is typically your family home.
But honestly, double and triple occupancy rooms are completely unnecessary and uniquely American.
>I am lifelong friends with my apartment roommates. We shared a house together but did not share a room.
It depends entirely on the person. I had a similar thing happen to me, except that I managed to get a single my first couple years of school. But I know from others, that it often creates a very intimate, fraternal bond which gives kids some semblance of a family bond before they are able to get a real social life, join clubs, make friends, find a partner etc.
I'm trying to follow you. I don't get how Baumol's has a higher degree of effectiveness in the US than it does in the EU? Are you saying there are more tech companies and therefore tech roles in the US than EU and thus those drive up non-tech wages even though they aren't as productive?
There are lots of reasons why US academics earn so much more than their european counterparts, but the income level of US tech employees is not high on the list, if it is on the list at all.
Also, Baumol's doesn't predict that wages in low productivity growth sectors will rise, it merely notes that the costs in such sectors do not fall, which means that whatever the sector produces (good, services, art etc) become relatively more expensive compared to other production. This is why it appears to cost so much to see the symphony orchestra, even in Cincinnati - it's not that the players all make a ton of money, it's that their productivity is flat, so the costs of the performance appear to rise relative to, say, toothpaste.
I asked Gemini 3 if your statement is true and got this, as expected: "That statement is false.
In fact, the prediction that wages will rise in low-productivity sectors is the central mechanism of Baumol’s Cost Disease"
Somebody asked Gemini 3 yesterday about a piece of music I was looking for. It said:
> Based on the details you provided—specifically the overlap with the poem "AM" (from Be Bop or Be Dead) and "Set The Tone" (from Bernie Worrell's Blacktronic Science)—the track you are most likely looking for is:
"Music" by DeadbEAT (featuring Umar Bin Hassan) Released in 1992/1993 on the album Wild Kingdom, this track was a cult hit in the acid jazz/trip-hop scene of the 90s and later appeared on compilations like the influential Red Hot + Cool (1994).
Very good, except that there is no album called "Wild Kingdom" by an artist named Deadbeat, and while Hassan does appear on "Red Hot + Cool" it is on a differently named track written by himself.
So forgive me if I call bullshit on Gemini 3 as well.
However, in this instance, it is a correct summary of the most visible popular summaries of Baumol's cost disease, so there's that.
I don't think it captures the essence of what Baumol (& Bowen) were writing about, but I accept that my presentation was misleading.
LLM hallucinations are still a thing for ultra niche topics. Not a problem for topics that have sizeable wiki pages, like Baumol Effect. Here is the first paragraph from wiki: "...tendency for wages in jobs that have experienced little or no increase in labor productivity to rise in response to rising wages in other jobs that did experience high productivity growth"
The problem with this summary is that it's not actually what Baumol & Bowen were really focused on in their original paper.
It is what most people nowadays connect with "Baumol's cost disease", but in their paper, the way in which rising productivity sectors cause wage increases in stable productivity sectors was more of a detail than the central part of their thesis. The core part was the observation that certain kinds of economic activity cannot reduce costs through productivity gains, while others can; the wage connection between them was, well, not an afterthought, but more of a consequence of the very specific sort of economic system we live in. One could imagine a society with different ways of distributing resources to labor that didn't really have this feature, and yet the same sectors of this imaginary society's would still suffer from "Baumol's cost disease".
When you break down how budgets have changed, the two biggest drivers of tuition increases are the growth of administration, and fancy amenities like sports facilities.
The cost of the person in front of the blackboard has not been increasing.
Ok, the prior link was comparing it to EU though, so perhaps costs for professors there went down even more, as professors make less there compared to US
From what I understand European education and degree programs are typically much more structured and narrow, and thus finish a lot faster. A student who finishes K-Ph.D. in the US will have a lot more breadth of exposure than such a student in most of Europe, if I recall what I read on the topic a while ago correctly.
When used in a social context, "free" has a different meaning than in many other contexts. It does not mean, for example, "there is no cost for this thing". Rather, it means "the person receiving this thing is not responsible for paying the costs associated with it (at least not at the time)".
Free health care doesn't mean "nobody gets paid to provide health care", it means "patients do not pay for health at the point of service".
If you'd prefer that we use some other term to describe this, please suggest it. I do find it interesting that the Scottish NHS uses "No fees at point of service" as part of their branding (or did, back in 2019).
For sure. The main benefit is that it allows smart, hardworking but poor students to get a degree and utilize their brainpower productively for the benefit of all. That's great.
Just don't say it's "free" - those who get the education pay back all they got via taxes (which in it's end effect are like paying down a student loan).
Just going to point out that this is semantic hair-splitting that usually comes from opponents of governments providing for the social welfare. Not saying you're doing that, but it's a thing that happens.
And nobody thinks free education doesn't cost anything, just like people don't think the military doesn't cost anything. Somehow, though, there is endless trillions for "defense", and a little moth flies out of the wallet when it's for something that doesn't involve drones.
Absolutely. I never would say it is "free". But in many ways it is a matter of what one values.
I had opportunities to move to the US and likely make 2x-3x what I make here and pay less taxes. I chose moving to Europe instead. It is the sort of society I prefer to live in.
People without a degree: Work and pay high taxes for years while their peers are studying, and then continue to pay high taxes to pay for the high salaries of degree holders who used their degrees to get government "jobs".
People with a degree: Get free education and free stipends, then get paid by the tax payers for the rest of their lives in their cushy government "jobs".
I'd reword the question: "was college paid for via higher income taxes for graduates (and others) or via a more direct approach of student loan taking?". I believe the latter but I don't see the fundamental difference. It's the same student loan but hidden from sight, as it's packaged as higher tax %
You're kidding. The former means all higher net worth individuals to take on both the cost (via taxes) and the benefit (a well-trained workforce for businesses, well-paid, highly taxed contributors for the state, an educated populace of voters, graduates with stable work and in-demand skills). The latter is another example of America's "Everyone for themselves" theme, with students bearing the entire cost of their education, while the graduate, public, state, and businesses reap the benefit.
If the benefits are spread so widely, why shouldn't the cost be?
The students bear costs but no benefit to themselves? No higher wages?
My point is that it doesn't matter in principle if one takes a loan and pays it down over time vs. one is taxed at much higher % and that tax "pays down" a phantom student loan of "free" education.
It does introduce a risk and hence the incentive for loan takers to choose their degree wisely though. Which should lead to better allocation of labor but at a cost of some personal risk.
I actually included the graduate as a beneficiary ("a well-paid, highly taxed contributor" or "the graduate" in the counter), but more importantly:
The entirety of society benefits from a well-educated populace. That's one reason even those without children pay for public education.
Following that, if everyone benefits, why is the graduate taking on all the risk (via a non-dischargeable student loan) instead of spreading the risk across the entirety of society?
I think that's fair that risk should be more spread. Comes at a cost of people choosing degrees more frivolously though and wasting their time and everyone's money
I'd like to push back on "useless" degrees here, as well. The idea that degrees that leave graduates struggling to pay their bills (especially with student loans factored in) are worse than degrees that maximize income is bad for society. Not every job that is good for society pays well - if they did, educators would be better paid, and many executives would not be compensated as well as they are.
Some degrees are less in-demand (at time of graduation) economically, but a well-educated populace that can apply critical thinking and remember lessons from history, can be its own reward. Notably, pushing for a population completely lacking these skills is an excellent way to topple a democracy over time.
The pay is determined by supply and demand, apparently there is a relatively large supply of educators (many just enjoy it despite low pay) relative to the demand.
I see your point on broader benefits, however, those are largely speculative while a shortage of e.g. doctors has very direct and concrete costs to the society.
On prior point regarding spreading risks - would you say government should bail out failed entrepreneurs? Because that is very similar in principle (taking risk, benefit for society)
I would struggle to define a truly useless degree though. That's what I'm pushing back on: that learning from our past mistakes, taking in different perspectives from other times, places, and cultures, and learning not only to learn, but to interpret media and think critically, are tremendously important to a healthy society. What you call "frivilous", I would call low-earning.
I'm not saying failed entrepreneurs should be bailed out, even if (through bankruptcy proceedings) they de-facto are. To your point though, they're given tax breaks by my government [0], which aligns with the goals we seem to have agreed are important and good for society at large.
Small businesses are given assistance when starting out and financially vulnerable; financial assistance that is paid for by all members of society, as we all reap the benefits of a stronger economy when they succeed. I'm not sure how one defends not extending the same courtesy to students.
This can only be true if the society gets richer over timer from this process.
Considering that EU has actually become poorer and the gap is becoming larger every year passing, your theory of benefits from a well-educated populace is not well funded.
In the EU, the risk has been loaded onto everyone but the benefits are meager at best, and inexistent in practice.
This is the typical problem of socialist system where everyone bear the cost but the benefits are only distributed to those in power or those who could manipulate the system for their own benefits.
If that wasn't true, France wouldn't be in the political turmoil and economic disaster that it is today. Unsurprisingly, France has been dominated by marxist adjacent ideologies, co-opted by the "resistants", the real winners of WW2. The US won on the ground but largely lost the ideological battle, we are now seeing the result of that invisible battleground.
> The students bear costs but no benefit to themselves? No higher wages?
Nobody said the student achieves no benefit. We keep saying that the student does not capture all the benefit of their own education in higher wages, but bears the entire cost.
Nothing is free - once you graduate you are hit with 50% tax that gets back all you "free" tuition costs many, many times over.
Not saying education should not be subsidized via taxes (I think it's good overall), but it's not free at all - the price is just hidden and spread out over many years (similar to student loans but less visible).