Some people advocate government funding of college scholarships as a way of creating a more egalitarian society. Others argue that scholarships help only those who are able to go to college. Do your answers to the preceding questions shed light on this debate?
If more college scholarships increase H, then it does lead to a more egalitarian society. The policy lowers the returns to education, decreasing the gap between the wages of more and less educated workers. More importantly, the policy even raises the absolute wage of unskilled workers because their marginal product rises when the number of skilled workers rises.