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Higher Education and Subsidies

Most modern societies today use the public to cover the costs of higher education (Wigger, 65). Here in the US, student fees and tuition represent only a small amount of the actual costs of the schooling with a majority of the costs paid for through subsidization by the federal government (Johnson, 303). As a result of donations from the public decreasing in the 1980s subsidies have become more crucial because costs and quality have been cut as a result of the loss of this revenue source (Winston, 30). Subsidies for students come in the form of grants, loans, and work-study job opportunities (Epple, 890) as well as general subsidies for all students (Winston, 20). Much of the aid provided by government is based on the individual’s family’s ability to pay for school (Epple, 890). There is much debate about the use of subsidization because of the fact that the money comes from the tax payers. This debate begs the question are the taxpayers getting what they are paying for. This paper will look at the arguments presented for and against subsidies for higher education in relation to three goals: economic growth, distribution of income, and social benefits.

One argument for subsidization in higher education is that higher education results in economic growth. Increasing the length of time in school for our labor force increases the nation’s rate of economic growth (Robinson, 265). For the US, one more year of schooling would result in a one tenth of a  point increase in the rate of growth (Robinson, 265). The problem we run into though is that the quality of education has to be at a certain level in order to attain growth (Robinson, 266). We already have a method in place, which determines academic quality by using relative rankings of colleges to determine which schools have a higher quality of education (Wintson, 16). However, even that model has flaws as it results in a race for prestige which can ultimately increase capital costs for a school and this will raise the cost of tuition (Winston, 30). Even if we know what the minimum qualities needed for higher education are, another problem arises: the graduates we produce have to be in the correct fields in order to maximize growth; however, we cannot predict which fields will be most beneficial in the future (Robinson, 267).

Another argument for subsidizing higher education is that it improves the income distribution of all. Subsidization increases access for those of lower incomes to colleges, and because more education usually results in higher incomes, this would improve income distribution (Robinson, 271). Even if an individual can’t/doesn’t use the benefits of these subsidies, he or she knows that his or her family will have access to it in the future (Bevia, 323). However, because the growth in the number of graduates has increased faster than the demand for these graduates, many students have had to settle for employment outside of their chosen field and often in jobs that did not surpass what was available to them without a degree (Robinson, 274). Even with this problem, 30% of those who graduate with 4-year degrees are going to earn significantly more than those without that schooling (Johnson, 305).  Men and women with degrees are more likely to get employment for many employers use a degree in order to determine whether an individual will be able to complete the tasks set before them (Robinson, 370).  Another problem that arises is that the current subsidies are not spread effectively. In the US, the average individual who has access to these subsidies has a fairly high income to start with (Johnson, 305). In other words, the net dollar price those who are poorer pay is higher than the net dollar price paid by those who are wealthier (Wintson, 20). Between the highest and the lowest income brackets government subsidization doesn’t appear to have a great effect, but its effect on the increased income of the middle class is proven (Robinson, 273).

Higher education results in social benefits for those who receive it and those around those who receive it (Murray, 237). People with higher education have better health and less anxiety than those without it (Murray, 237). Another social benefit is that individuals who have higher education claim higher job satisfaction than those without (Murray, 239). Additionally, those with higher education often have better social skills, higher confidence and an advantage in the labor market (Murray, 239). Those around those with education benefit too. Studies have shown that individuals with more education tend to be more active in their community, have more racial tolerance, cost society less and attempt to attain more social cohesion (Murray, 236). Furthermore, it can be argued that having a large percentage of the population exposed to higher education results in social benefits in regards to a population being better able to debate politics, appreciate the arts, being a active citizen and other positive attributes (Johnson, 304).

One of the main problems economists run into when examining this issue is the way that subsidies are being used. Education tends to be a one-time investment and getting it right the first time works to the benefit of all (Winston, 15).
One way in which to achieve optimal subsidies is to have the poor pay (through taxes) part of the expenses for the rich to go to college. The argument for this is that if the wealthy have more wealth and that there will be a trickle down for the poor which means both benefit and that with an increased labor skill in the market the poor will gain the benefit of that education (Johnson, 317).  However, while I think this model is logically consistent, I think it is immoral regardless of the results.
An alternative approach to making the system work is in direct opposition to the prior. The argument goes that we should increase financial support for the low-income students through taxes to all (Epple, 916).  There are two ways to do this either by giving financial aid directly to the low-income students or by providing grants for the colleges (Epple, 916). Both of these suggestions suffer from flaws though. Increasing financial aid could result in making colleges increase their tuition, which would again limit the access for lower income students (Epple, 916). In the case of grants, the result would mean colleges would increase their competition for students with a limited effect upon the lower income bracket, but lower tuition for all (Epple, 916).
Another theory is that economics is not the best system for understanding the benefits of higher education and making policy decisions (Winston, 33). Education should be a goal in and of itself (Robinson, 274). It is the aspects of education that we cannot account for through economics that can justify any expenditure of the government intervention (Robinson, 274). We need to change our thinking about pursing education solely for the potential of increased income (Robinson, 274). Treating higher education as though it was just another business would result in policies being passed that don’t fit our needs (Winston, 34).

How we use subsidization is a huge part of its effectiveness and the current system is not the most efficient. Improvements have to be made and we have to make decisions on how important an educated populace is to us. Personally I feel that an educate populace is valuable in and of itself. People who are educated can make more informed choices. I think any other positives are just a bonus.


Bevia, Carmen, and Inigo Iturbe-Ormaetxe. “Redistribution and Subsidies for Higher Education.” Scandinavian Journal of Economics 104.2 (2002): 321-40. Print.
Epple, Dennis, Richard Romano, and Holger Sieg. “Admission, Tuition, and Financial Aid Policies in the Market for Higher Education.” Econometrica 74.4 (2006): 885-928. Web. 5 Dec. 2011.
Johnson, George E. “Subsidies for Higher Education.” Journal of Labor Economics 2.3 (1984): 303. Web. 7 Dec. 2011.
Murray, Joy. “The Wider Social Benefits of Higher Education.” Australian Journal of Education 53.3 (2009): 230-44. Print.
Robinson, Albert J., and W.L. “Government Subsidy To Higher Education: The Benefits, Costs And Non-Economic Value Of The Policy.” American Journal Of Economics & Sociology 30.3 (1971): 259-274. SocINDEX with Full Text. Web. 3 Dec. 2011.
Wigger, Berthold U. “Are Higher Education Subsidies Second Best?” Scandinavian Journal of Economics 106.1 (2004): 65-82. Print.
Winston, Gordon C. “Subsidies, Hierarchy and Peers: The Awkward Economics of Higher Education” Journal of Economic Perspectives, Vol. 13, No. 1. (Winter 1999), pp. 13-36.



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Wage Differentials between Men and Women

There is a wage gap between men and women. There are many factors that influence this gap, but most researchers agree that the gender wage gap is caused by segregated occupation fields, labor market experiences, education, higher turnover and discrimination. This paper looks at these different arguments in regards to full-time workers.

Women are at a disadvantage because of this inequality in wages. In 1979, Women earned 71.5% as much of men (Blau, 1998, 136) and in 2003 they earned 79.4% as much as men (Blau, 2007, 9). However, even though the gap has decreased, it isn’t necessarily because there is less gender discrimination. During this same time period, women improved their marketable skills, became increasingly committed to the work force (ergo a decrease in turnover rate), and gained more
qualifications (Blau, 1998, 138). In the late 1990s there has been a decrease in the speed at which the wage gap is narrowing (Blau, 2000,86).

The wage gap between men and women has become a bigger problem as more women have joined the workforce.  Between the 1970s and 1995 women’s participation in the workplace increased 23% (Blau, 1998, 117). Furthermore, there has been an increase in the number of women raising their children on their own from 9% in 1970 to 16% in 1995 (Blau, 1998, 141). This rise means that women earning less money than men becomes more of a concern as women are becoming less able to provide for their children due to the wage gap.

The wage discrepancy is also found within occupational fields. Many fields that have a majority of females pay less than fields favored by men (Blau, 1998, 127). This segregation within occupation fields appears to be the biggest cause of the gender wage gap (Karamessini, 56). Men are more likely to go into blue-collar jobs with unions; while women are more likely to be in service or professional jobs (Blau, 2007, 12). Women are concentrated in service and administration jobs with 41% of employed women holding these types of jobs (Blau, 2000, 79). These factors together account for a fair percentage of the gender gap; occupation alone represents 27% of the wage gap, industry for 22% and unionization for 4% (Blau, 2007, 12). The Index of Segregation showed that 53.9% of women in 1997 would have to change jobs in order to achieve equal distribution in occupations (Blau, 2000, 79).  Since men tend to go into certain fields and women into different job fields that pay less than the men’s job fields, this ultimately increases the wage gap.

Another cause for the difference in wages is the amount of labor market experience. While it is true that women on average have less experience than men (Blau, 2000, 84), there is still a wage gap between men and women who have the same amount of experience. White women who have worked 11-15 years in comparison with men who have work 11-15 years only make 87% of what their male counterparts make (Nord, 57).  Work experience often leads to higher initial starting wages (Blau, 2007, 15) which would mean that because men have more experience in comparison to women, this would increase the wage gap. The fact that, in general women, have less work experience only accounts for 11% of the gap in wages (Blau, 2007,11).

Education is another reason why the wage gap exists. Education, like experience, is often a determinant of wage which means that the more an individual has the higher their wage. One way in which women can decrease the wage gap is by catching up in the average number of years of education.  If women had the same average number of years in college as men, based on data from the 1980s, then the wage gap would decrease by 19.8% (Nord, 60).

An additional argument for why the wage gap exists is because women have a higher turnover rate in the labor market. Many women, knowing that they are likely going to leave the labor force at some point, avoid jobs that are heavy in job specific training because all the gains made from that training are gone once they leave that job (Blau, 2007,10). For many salaried jobs, an individual has to remain at the same establishment for an extended period of time in order to gain a higher wage. However, in the last decade there has been an increase in the number of women, included married women and women with children, remaining in the labor force (Blau, 2007, 10).

The problem with all of these explanations is that there is still an unexplained gap left over (Blau, 2000, 82). After taking all of these factors into account, women are stilling earning 91% of what men make (Blau, 2007, 12). A study in 1998 found that for college graduates with similar credentials and similar jobs, there was a pay gap of 10-15% (depending on industry) between women and men (Blau, 2007, 13). One study showed that a change in the screening process for the top 5 orchestras in the USA to a blind audition method lead to an increase in women musicians from 5% in 1970 to 25% in 1996 (Blau, 2007, 13). Besides this there have been numerous court cases that have found discrimination in regard to women’s employment and placement (Blau, 2007, 14). All of this suggests some form of discrimination is present, but it is difficult to assess how much of the gender wage gap is because of discrimination. This discrimination could be taste preferences or an assumption as to whether a woman could do the job as well as a man.

Economists have done many multiple studies in order to determine the causes of the pay gap. Their findings show that, overall, the gap is caused by differences in occupation fields, experience in the labor markets, years of experience, turnover rates, discrimination and likely other factors. However, a significant problem with the research on this issue is that, depending on the models used, the results can often come out differently.

Works Cited

Blau, Francine D., and Lawrence M. Kahn. “The Gender Pay Gap: Have
Women Gone as Far as They Can?.” Academy of Management Perspectives
21.1 (2007): 7-23. Business Source Complete. EBSCO. Web. 25 Oct. 2011.

Blau, Francine D. “Trends in the well-being of American women,
1970–1995.” Journal of Economic Literature 36.1 (1998): 112-165.
Business Source Complete. EBSCO. Web. 25 Oct. 2011.

Blau, Francine. D., & Kahn, L. M. (2000). Gender Differences in Pay.
Journal of Economic Perspectives, 14(4), 75-99.

Karamessini, Maria, and Elias Ioakimoglou. “Wage determination and the
gender pay gap: a feminist political economy analysis and
decomposition.” Feminist Economics 13.1 (2007): 31-66. Alternative
Press Index. EBSCO. Web. 27 Oct. 2011.

Nord, Stephen. “Productivity and the role of college in narrowing the
male-female wage differential in the USA in 1980.” Applied Economics
19.1 (1987): 51. Business Source Complete. EBSCO. Web. 25 Oct. 2011

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Effects of the Columbian Exchange

Effects of Colombian Exchange:

The Colombian Exchange hurt both animals and humans.

This is because:

An epidemic has impacts that are not just physical. These impacts are often psychological and are caused by seeing a disease that has physical disfigurement and a fast death as symptoms.

In some places the death rate was so high the the Natives found in impossible to bury them all. And for those who survived the smallpox epidemic they had a constant reminder via the damage done to their skin.

Animal suffered as well because the addition of new types of livestock impacted the native herds very badly. The new livestock brought new diseases that their immune systems could not handle. Two specific types, alpaca and llama, suffered the most after conquest because of disease.


Crosby, Alfred W. The Columbian Exchange: Biological and Cultural Consequences of 1492. Westport, CT: Greenwood Pub., 2003. Print.
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Effects of convicts in Australia

After spending far too much time on Yahoo Answers answering questions I have decided perhaps the knowledge I have learned should be turned into informative blog posts. So, here is my attempt to educate the public.

Western Australia was greatly impacted by the  convicts that were its base.

For example there was an in-proportionate amount of men to women. Between 1815 and 1840 1 in 8 convicts were women.After 1840 the odds improved with 1 in 5 convicts being women. Furthermore, 59% of the convicts that were women were from Ireland. This means a majority of the ancestry of those with convicts in their background have Irish backgrounds.Oddly, many of the women who were convicts had committed arson with the sole purpose of emigration (450, Jupp).  The women statistics for convicts was more reliable than the mens because they received far more attention bureaucratically than men.

Another interesting effect of the convicts base is that most convicts had workable skills. In the past they were brick layers, bootmakers, blacksmiths, clerks and ploughmen because most convicts has been workers at some point in their lives. Most convicts appeared to being urban working class with 44% having worked skilled jobs and the other 23% having worked semi-skilled jobs (21 Jupp). Some jobs were not relevant to the colonial economy, but many did have background in construction trades and therefore their value was high because they were they basis of the social structure that the was the basis of colonial development.


Jupp, James. The Australian People an Encyclopedia of the Nation, Its People and Their Origins. Cambridge: Cambridge UP, 2001. Print.
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Inspired by the Library of Babel

The mind (which some would call insane) contains an indistinct volume, perhaps billions, of half thought ideas. Their existence cannot be know outside of its deepest space. They are chronicled and filed among the tidbits and dreams of youth. Any of these half-thoughts could harbor hopes of being finished, maybe. But finishing theses dreams is improbable. Billions, scattered haphazardly throughout the mind—they surround the full thoughts; yet they are lost, misplaced, half-forgotten through the whim of a child, a child long since grown. Still, the child remains, hidden and waiting to be let out, which would lead to more half thoughts; which would then have-to be forgotten all over again.

Half- thought idea

Half- thought idea

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Book of Spirit

A book of many pages, supposedly holds the answers, to all  the worlds problems. Obey this book and all will be well. Who wrote it? Nobody truly knows. We have to take it in faith. The faith that makes people obey. The faith that makes people believe. A book that holds fantastical stories. A book about witches and warlocks? No, that’s blasphemy. Thou shalt not suffer a witch to live and all that. Contained within its pages it tells many stories, stories that have been told in other places, in other times. Do you believe? Do you have faith? What exactly do you know? What interpretation do you believe ? What small difference is important? Where will you go? What will you do?
The content of a mere book causes wars and death. Many must suffer for their faith. They deny, exclude, and withhold things to follow this book. Others must suffer for not believing as they belive. There are others, other books, that do the same. Books that also hold the answers, different answers, and therefore wrong. Books that cause their believers to fight and die for them. Books whose pages should have been written in blood. Books that hold much death in them. How can such death, like that held within these books be right? Jealousy of the great and powerful controls lives, just as here in the real world it does. Die believers, fight believers, suffer believers ect. how can this be right? I do not know the answers, I can not claim to know anything because I know nothing. Books KNOW nothing. Words on their pages KNOW nothing. Only those who read them believe they KNOW anything and people must suffer for the knowledge.

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Summer Classes

OK, so I decided to take summer classes because otherwise the summer would be boring. However, I know better than to take a full load as I intend to make money over the summer.

Observation one about staying the summer: Since I decided not to go home this week I have absolutely nothing but job hunting to do this week. Which means my first few days of summer are me walking around aimlessly and filling out job applications.

Observation number two: Everyone else goes home for at least this week before summer classes start if not for the entire summer. Therefore, my social calender just walked out the door.

Observation number three: I have no money. This is because I have no job nor any other way to make money which is why I have to look for a job. However, until I manage to make some money I can just sit around and do almost nothing.

Please PLEASE someone entertain me!

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Have you thanked your parents lately?

Question: Have you appreciated your parents lately? Well I haven’t. So, I thought I would give them a blog post.

Why do I owe my parents thanks?

~ They have put up with my many personal dramas

~They have fed and clothed me over the years

~They’ve taken in my stray animals and indulged my tears over their losses

~They have funded my college and understand the mistakes I make

~They make holidays so much fun (eggnog with nutmeg, Decorating, cooking together, shopping and walks with the dogs)

~They pushed me to pursue the arts and athletics (ballet, tap, soccer, and choir)

~They’ve allowed me the freedom to make my own choices regarding things like religion

~annnnnddd SOOOOOO much more

I failed a little bit this year with mothers day. So, to make it up to my amazing mother I wanted to share with you all why she in particular is worth praise.

~She takes my side and helps me come up with solutions that work

~Shes taught me how to stand up for myself and how to protect myself (thanks for the self defense Mom!)

~She listens to me whine about my life and helps me feel better about my problems.

~She is always willing to let me cry on her shoulder

~She looks out for my best interests.

My dad taught me different things. However, I’m glad I learned them anyway.

~He taught me the love of music and dancing (Family dance session to “girls just wanna have fun” and when he whisks mom around the kitchen).

~He taught me that although, I’m not artistic in the more traditional sense, that II have the ability to put together concepts and color combinations

. ~He taught me to enjoy the quiet things in life.

~He taught me about outdated technology :)

Overall, I think you can all agree that my folks are amazing. They have sacrificed and worked hard so I could have a good life. Although, I haven’t always liked them I have always loved them. I just wanted to make sure they knew that I did notice and I do appreciate their work.


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Wallstreet Crash of 2010


So, just breifly in case you all didn’t notice the market crashed briefly this Thursday. Now websites are throwing around reasons for the crash. Its a good question, but no one seems to have an answer.
MarketWatch suggests that the computers that “flash traded” were being watched by their regulators who failed to see the problem. People cannot react as fast as a computer can process data. MW asked the question did these regulators even know what was going on? There are flaws in the current system, but even so the system overall is reliable. One has to watch carefully and not panic about computers. The error was rectified rather quickly after all.
The Economist suggested that perhaps the crash was due to the fact no one even know the value of the stocks they were trading. Honestly, I think this is true. However, I don’t know if this alone would have caused the crash we experienced. EMH does need changing just as The Economists points out. It doesn’t take all factors into account.
The New York Times pointed out that the computers are there to look for trading opportunities that come and leave so quickly that a person could never hope to see them (much less react to them). Since this is true it seems likely that this kind of software could have caused the crash we witnessed.
Whatever the true cause it certainly has caused people to look at computers more cautiously. I think bringing this to peoples attention is important. I wonder how many people realize what a large flash trade could do to the stock prices of any company. Good luck everyone.

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