Heavy Lifting - thoughts and web finds by an economist
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Wednesday, April 13, 2005

Is this good public policy?

The market for science and math jobs evidently doesn't pay well enough or there are too many U.S. students that are unable to complete math/science curricula in college. Regardless of the reasons, the U.S. government has determined that there are too few people going into math and science. The answer? Subsidies to college loans. From today's Chronicle of Higher Education (reg req'd):
Members of Congress introduced a bill on Tuesday that would pay the interest on student loans for graduates who agree to work in mathematics or science jobs, including teaching, for at least five years.

First, subsidizing those who go into math/science jobs might not encourage many NEW people to go into math/science but might just reward those who are already in those areas. Second, one reason the college curriculum is broad-based is for students to self-discover their comparative advantage. I wanted to be a pharmaceutical chemist for a while, until I discovered organic chemistry and simultaneously discovered economics. Chemistry out, Economics in...arguably society is better off - at least I am not killing people with bad pharmaceuticals.

Subsidies might encourage a marginal student to enter into the science/math fields only to get the interest subsidy but might have very little ability in science/math and this might not be so good for society. If the government is successful in attracting marginal math/science students into the field there is a potential social cost - bad engineers building bad bridges. If there are a lot of math/science students but not enough jobs, or employers willing to hire marginally qualified students, the government might get into the business of foisting these students on society in one way or another - either through forced employment or through the primary and secondary schools.

A love for science and math can be inculcated in the freshman and sophmore years of college, but I fear the government is looking at the symptoms of a problem and not the cause. A passion for science and math is really formed in the freshman and sophmore years of high school, a full four or five years earlier than the government's proposed subsidy.

I had a lot of friends who majored in political science and history - where's the subsidy for them? I came out of undergraduate (and graduate school) debt free - where'd be my subsidy?

Cheap policy (estimated to cost about $66 million per year), but bad policy.

I, on the other hand, got a National Defense Education Act fellowship to attend graduate school in economics (in 1969). Which was about the craziest thing that has ever happened to me.
It seems like every five years or so I read an article in the Chronicle of Higher Ed about a "shortage" of people trained in math or science, only to read another article several years later about the plight of people scraping by on post-docs. About a year ago they did a good piece that united the two articles. It said that industry likes these "shortages" because it keeps down wages. Student loans that are non-field specific are a much better mechanism than subsidies. Interestingly, the Wall St. Journal did a piece the other week about how the children of tech executives don't want to study computer science or engineering: they all know anecdotes about people whose jobs were outsourced or had to move to the boondocks to chase one of the few positions available.
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