Is Free Tuition Europe’s Message to America?

Published November 15, 2015 in Tacoma’s News Tribune.

grad capsBERGEN, Norway.  Should college be free for students, as Bernie Sanders contends?

Those who take this position usually support it with two claims: We need the best-educated workforce in the world, and cost should not deter young people from developing their talent.

In other words, free tuition would lead to a more prosperous and equitable America. And since college in countries such as Denmark and Norway is free, why can’t it also be free for Americans?

Yet if we follow Sanders’ suggestion and look abroad for inspiration, it’s not so clear that “free tuition” is the take-home message. Look closely at other nations, and it is apparent that we almost excessively invest in college.

In many respects, public investments in U.S. higher education are typical of levels found elsewhere.

Government bodies in America spend about 1 percent of the nation’s gross domestic product on higher education. The average for members of the Organization for Economic Cooperation and Development, a club of rich democracies, is about 1.1 percent of GDP.

True, Scandinavian countries like Norway (1.4 percent) tend toward the high end, while the United States is at the bottom. But in no country does the government invest more than 2 percent of GDP on higher education.

Our outlier status has more to do with the presence of private dollars than the absence of public dollars. Private spending collectively rises to 1.6 percent of GDP in the U.S., whereas in the average OECD country, it is less than a third of this. Norwegian citizens spend a minuscule .1 percent of GDP on tuition expenses.

Combine these two figures – public and private spending on higher education – and it becomes obvious that Americans spend enormous amounts on higher education. Per-student per-year, we spend $30,000, or twice the OECD average. Norway, a country richer than the United States, also comes in at the high end, but its per-student spending only amounts to $20,000 per-year.

Comparing the cost of college in the U.S. to its cost abroad tells us what we already know about cross-national comparisons of health care: Our spending is out of the international ballpark.

Whether in America, Norway, Sweden, Denmark, France or Spain, roughly 40 percent of youth today wind up with the college degree that provides them with brighter employment prospects than have the 60 percent without. Like Sanders, most people believe that this percentage would rise if tuition were free.

Perhaps. But even if eventually half of our youth wound up with a college degree, half would still not.

Unlike America, European nations typically rely on a range of strategies to increase the odds that the 60 percent who don’t go to college nonetheless end up well-educated, with good job prospects and reasonable earnings.

Their high schools commonly offer a vocational track that develops valued labor market skills; this is a popular option for those not inclined toward college. In many European countries, between one-third and one-half of youth end their formal education with a vocational high school degree.

For those meeting bad luck in labor markets – the unemployed or underemployed – European countries spend considerable amounts to encourage their successful re-entry into the work force. The average OECD country spends .5 percent of its GDP on such training and activation policies, while the U.S. spends a paltry .1 percent.

Finally, most European countries substantially subsidize the goods and services needed to work: transportation, child care and elderly care. And no country leaves citizens without health insurance. Here too, public expenditures in the U.S. fall far short of European standards.

A shortage of vocational education, work-activation policies, and subsidies for the goods and services needed to work help account for the fact that only 68 percent of Americans with just a high school degree are employed. In OECD countries, 74 percent of them are employed. In Norway, the figure is 82 percent employed.

No one doubts the value of public investment in higher education. But college is not the sole route to a happy, educated and productive adulthood. Indeed for a majority of America’s youth, it is not the path chosen.

Public investments in the other routes could do more than free tuition to advance the objectives of equity and national prosperity.