Tuesday, October 24, 2023

The Rewards of Subsidy



According to data from the Census Bureau, 343,000 Californians fled the state between July 2021 and July 2022. That marks the third consecutive year that California has seen a net decline in population.

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For the past two years, at least two of the people advising Biden’s Iran envoy were actually secretly working for the Iranian government.--NR

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Danny Serafini, a first-round draft pick who once pitched for the Pirates, has been arrested for the murder of his father-in-law.


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The Rewards of Subsidy

In her 2004 paper “The Incentive Effects of Higher Education Subsidies on Student Effort,” New York Federal Reserve economist Aysegul Sahin made the case that the less they have to pay, the less students work. She wrote: “I find that although subsidizing tuition increases enrollment rates, it reduces student effort. This follows from the fact that a high-subsidy, low-tuition policy causes an increase in the percentage of less able and less highly motivated college graduates. Additionally—and potentially more important—all students, even the more highly motivated ones, respond to lower tuition levels by decreasing their effort levels. This study adds to the literature on the enrollment effects of low-tuition policies by demonstrating how high-subsidy, low-tuition policies have both disincentive effects on students’ study time, and adverse effects on human capital accumulation.”

So the results are that people work less, produce less and schools attract and reward less capable people. But wouldn't it be kinder?

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