2001 Articles

The Cost-Effectiveness of Public Postsecondary Education Subsidies

Muennig, Peter A.; Fahs, Marianne

Background. Although educational attainment is a well-recognized covariate of health status, it is rarely thought of as a tool to be used to improve health. Since fewer than 40% of U.S. citizens have a college degree, it may be possible for the government to improve the health status of the population by assuming a larger burden of the cost of postsecondary education. This paper examines the costs and health effects of a government subsidy for public postsecondary education institutions.
Methods. All high school graduates in 1997 were included in a decision analysis model as a hypothetical cohort. Data from the U.S. Department of Education, the World Health Organization, and the National Center for Health Statistics were used as model inputs.
Results. Relative to the present educational system, a federal subsidy for public and private colleges equal to the amount now paid by students for tuition and living expenses would save $6,176 and avert 0.0018 of a disability-adjusted life-year (DALY) per person annually if enrollment increased 5%. The overall savings among 1997 high school graduates would be $17.1 bil lion and 4,992 DALYs would be averted per year relative to the present educational system. If enrollment increased by just 3%, $3,743 would be saved and 0.0011 DALYs would be averted per person. An enrollment increase of 7% would lead to savings of $8,610 and 0.0025 DALYs would be averted per person relative to the present educational system.
Conclusions. If the government were to offer a full subsidy for college tuition at public universities, both lives and money would be saved, so long as enrollment levels increased. Providing a free postsecondary education for students attending public schools may be more cost-effective than most health investments.