2020 in The Age

The Age reported today on some views that I might be putting to the Productivity Stream. Of course, it focussed on my “mind changing” views on reading age and I will have more on that soon (but for the record I never said, “finger painting,” I said creativity; there is a difference).

But, more conventionally for an economist, I also talked about our educational system:

Professor Gans believes governments should fund students, not educational institutions. Institutions, both public and private, should compete for students, not the other way round.

“One of the things I’ll be stressing will be how do we allow people who want to spend more on education to do so without punishment,” the Melbourne academic said.

I have written about these things before in Finishing the Job (summary here) but I also commend Andrew Leigh’s AFR piece a few weeks ago that summarised these types of ideas concisely.

The article also referred to Bruce Chapman’s ideas of extending income-contingent loans beyond higher education. Housing and credit anyone? 

3 thoughts on “2020 in The Age”

  1. There’s tremendous potential to the idea of funding students not institutions.

    We don’t have anywhere near the kind of muddy water that the USA has when it comes to vouchers.

    All we have to do is change the word (vouchers was always the wrong one). It’s great that Australian politics hasn’t had many premature attempts to introduce this funding model. It has given us clear access to pursue it now.

    Oh and another article came out today re: the development of extreme internet:


    There’s enough articles popping up to suggest that this new network we are investing so much money in will be dead before it even begins. Although this technology in the article seems to be land-based, I would still lean towards a vuture of wireless with extreme speeds.


  2. I just read your article about allowances, good article.

    Something I want to stress, and that rarely gets mentioned by advocates, is that the amount of specialist schools would climb dramatically as niches develop within the market.

    For example, we’d probably see niches develop to cater specifically to children with learning disabilities, and also for smart children. We’d most likely see a rise in Montessori schooling as well.

    You’d also see things like sports specialist schools, arts, and most likely language as well. Allowing the market to take control is possibly one of the most exciting things that could happen to Education in Australia.


  3. One thing that I think may end up being one of the greatest impediments to competition, or at least specialisation in universities is student accomodation. Most students go to the closest university (I think I read it was about 80%) so they can continue living at home. Financially this is just too attractive. Rents are rising, and sharehousing is daunting for a 17-18 y.o.

    Now, extensive student housing could mitigate this problem just like American students have extensive mobility, but I don’t think any university in Australia has enough campus accomodation to house even 10% of its undergrads (let alone post grads). Also, where American universities are often in college towns, most Australian universities are in (expensive) cities.

    Unless it becomes easier for students to live near any university, all universities will tend to cater for most of the local population’s prospective students, and since these students won’t be homogenous, the unviersities will be try to be all things to all people.

    It won’t be easy for this to happen though. The universities which can easily build much more accomodation are in regional cities or outer suburbs where rents are cheaper anyway. The universities that need it the most, such as the sandstone universities, are surrounded by very expensive land, which means they would have to sacrifice existing buildings. I guess Sydney University could encroach on The Block though, it seems like the kind of thing Columbia would do.

    But the restrictions placed on student mobility by accomodation issues is immense. How can universities pursue their comparative advantage with such a huge impediment to inter city (and in many cases, with terrible transport issues, intra city) trade in education?


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