The government's decision to grant greater autonomy to universities and reduce subsidies for higher education has been met with mixed reactions. Many people support the policy, believing it will bring equality to the currently segregated community and increase overall welfare.

Proponents of a blanket subsidy for higher education hinge their arguments on conventional wisdoms: That there are hordes of poor students that do not enter college because they cannot afford the tuition fees; and that putting more and more individuals through college will increase overall public welfare. These ideas are appealing and popular, but are not necessarily correct. Let's take a closer look.

First, evidence shows that there is only a very small fraction of the poor that graduate high school and are thus eligible to enter college. The number of poor people going to school decreases significantly as the level of education increases. In Indonesia today, nearly 90 percent of children from the two poorest income quintiles graduate from primary school, but only approximately 60 percent of the same group continue to junior secondary school.

The number continues to decrease; only about one out of ten young people aged 16 to 18 years old from the two poorest quintiles graduate from senior high school and are eligible to enter college. Of this number, maybe half decide to continue to college.

Unlike what many people would like to believe, the main reason the number of poor people decreases as the level of education increases is not because they cannot afford the tuition fee, but rather because the poor cannot afford the opportunity cost of education.

Going to school means forfeiting income; and for poor households this is a big deal. Six years of primary school means six years of lost income - 12 years of basic education means twelve years of lost income. That is the main reason why only a small fraction of the poor decide to go to college. Even if we made the fees exceptionally low, this is unlikely to change.

It doesn't take a mathematical genius to figure out that a blanket subsidy for higher education would mostly benefit students from well-off families. The very poor generally don't go to college, the middle and upper classes do. Subsidizing higher education won't make universities less exclusive; it will only make the exclusive pay less.

Furthermore, the idea that a massive expansion of higher education would lead to a higher level of general welfare also needs to be re-examined. It is true that the personal benefit of higher education is significant; on average, a college graduate makes about twice as much as a high school graduate over a lifetime. It does not follow, however, that having more and more individuals going to college leads to a higher level of welfare for all.

What we need to understand is that education is a "positional good" - its value depends on whether you have more of it than other people - and is not just about acquiring knowledge and skills in absolute terms, per se. The rewards you reap from your education do not solely come from the skills and knowledge you receive, but also depend greatly on whether you're somewhere "at the top." The catch is, it's impossible to have everyone at the top.

To put it simply, an ambitious expansion of tertiary education would lead to a decrease in value of a college diploma. We're already beginning to see the signs today. Some occupations that only required high school diploma just a couple of decades ago - security, sales promotion, taxi drivers - are now beginning to require a college degree. In the worst case scenario of tertiary education expansion, one can only hope to get a job, any job, if they have gone to college. This would not help the poor; indeed it would suffocate them, for then they would have no choice but to forfeit income and spend even more money to go through college if they expect to get any decent job at all.

We should all pause for a moment before blindly demanding the state heavily subsidize higher education. Such a policy is indeed a "feel good" policy, one that gives us the illusion that we've done something good when in fact we would only be giving a break to the middle and upper classes and would very likely hurt the poor in the long run.

A better - though perhaps less politically appealing - policy would be to focus on basic, including preschool, education. Participation in quality early childhood education strongly correlates to higher level of success in adult life, while the opportunity cost borne on poor families is very low (since toddlers can't work for money anyway). Meanwhile, we are still falling behind in terms of primary education quality and participation in secondary education.

The writer is the Executive Director of the Association for Critical Thinking. This article is his personal opinion.

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