If college education produces a positive externality, the government may

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When there is a positive externality associated with a good or service, the market may underprovide it as private individuals may not take into account the social benefits of their actions. In such cases, the government can intervene and subsidize the activity to encourage its production and consumption. In case of college education, it is argued that it has positive externalities as more educated individuals tend to have higher incomes, contribute more to the economy, have better health outcomes, and are more involved in their communities. Therefore, the government may subsidize college education to increase its affordability and encourage more people to attend college, which in turn can have positive spillover effects on the economy and society.

If College Education Produces a Positive Externality, the Government May