Risk Insurance and Underinvestment in Education

Abstract

Introduction In recent years considerable attention has been given to the role of the State in the financing and provision of education. Public financing of education has, in particular, been widely justified on the grounds that there are external benefits from education (1). Underinvestment in education occurs because the individual equates private benefits and private costs. But social costs equal private costs while social benefits exceed the private ones. This situation can be corrected by reducing private costs through public subsidies.

Citation

Wallace, R.M. (1977), "Risk Insurance and Underinvestment in Education", Studies in Economics and Finance, Vol. 1 No. 1, pp. 42-46. https://doi.org/10.1108/eb028589