The education system in Japan is one of the best in the world. Primary and secondary education is free, with a typical school day from 08:00 to 15:00 or 16:00, depending on the age of the students.
With reference to the dataWith reference to the data above and your knowledge of economics, analyse why education in Japan may be an external benefit (6 marks)
November 2023 Paper 1: Microeconomics and Business Economics 4EC1/01 (QP)
An external benefit is the positive effect of a transaction on a third party. A third party is someone other than the buyer or the seller. External benefits are also the difference between social benefit and private benefit.
One example of the external benefits of education is that if someone consumes a higher level of education, they will gain new skills. This benefits a third party as well as themselves. For example, it will benefit their future employer as they will be more productive and bring better ideas to the workplace.
Another example is that those who have better education are more likely to have high skilled jobs or own more profitable businesses. Therefore, they are more likely to contribute larger amounts in either income tax or corporation tax, so society will benefit.