an underappreciated tution fees argument

Rortybomb draws our attention to a point that I think was implicit in one side's argument in the tuition fees hoohah about a year ago, but which for one reason or another didn't really get across.

The idea is that although it might in some sense be fairer for those who personally benefit from higher education to pay for it, it may not be beneficial to society as a whole, because

Debt puts contraints on what people are capable of doing, and one way out of that constraint is to work in the fields that pay the most.  For those who want to see our best working in schools, government, nonprofits, taking chances starting entrepreneurial work or simply not working to replicate already existing power structures, this is a terrible arrangement.

This argument is a bit like the impossible-to-kill Laffer curve argument that has been in the news lately. It might be a nice idea for those who benefit from university to pay society back for the privilege, but it's not going to happen just because the government wants it to: if you try to claw back the nominal cost, the little fuckers will just take their pounds of flesh/public benefit in a different way, by working in the city rather than doing useful welfare-improving things.

The anti-fees people who use this argument, and I think it captures what a lot of them meant when they warned about young people being 'saddled with debt', differ from the tax-cuts-for-the-rich brigade in that they have academic evidence on their side. The paper is called Constrained After College: Student Loans and Early Career Occupational Choices, and the money quote is

We find that debt causes graduates to choose substantially higher-salary jobs and reduces the probability that students choose low-paid “public interest” jobs…Specifically, in our preferred specifications in columns 6 and 7, we estimate that an extra $10,000 in student debt reduces the likelihood that an individual will take a job in nonprofits, government, or education by about 5 to 6 percentage points.

The study was done in America, where student loans are bigger, aren't always income-contingent and generally have less favourable terms than UK ones, but in the other direction the effects on entrepreneurial work and political activism were left out. Even without taking these into account, though, this one paper provides way more evidence for lowering UK tuition fees than there has ever been for increasing revenue by decreasing income tax.