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Explanation of education as a positive externality

Education is often used as an example of a positive externality. Are the external benefits greater for elementary, secondary, or college education? Explain.

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An externality is a benefit or a cost to society as a result of the production of a particular good or service. A positive externality benefits society but that benefit is not transferred directly to the provider of the good or service. Schools provide educational services in return for money, either ...

Solution Summary

This solution explains why education is often cited as an example of a positive externality, and gives detailed reasoning for which of elementary, secondary and college education provides the greatest benefit to society.