Pricing and investment decisions in Irish Education

Irish third-level graduates benefit significantly from their education in the form of higher earnings. This private "rate of return" is higher in Ireland than in most other OECD countries. This implies a strong case in equity terms for tuition fees. The abolition of fees in 1994 did not increase equality of access to higher education as intended, but other labour market changes in the late 1990s affected the outcome - notably the increased earnings prospects for second-level school leavers. Also, the low achievement of some socio-economic groups at primary and secondary levels is a factor which makes third-level "free" education an ineffective policy in social terms. The return of tuition fees is advocated, together with improved student support schemes: in particular student grants should be subject to a much more gradually tapered means test. Higher education institutions which charge cost-related fees should be freed from government-imposed restrictions on intake, especially into medicine.