Final answer:
A college education indeed creates positive externalities such as improved economic productivity and societal benefits like better health outcomes and lower crime rates. Governments can address these externalities by funding education, providing financial support, and facilitating partnerships between businesses and educational institutions.
Step-by-step explanation:
Does a college education create positive externalities? The answer is true. College education offers not only personal benefits in terms of higher potential earnings and career opportunities but also produces significant positive externalities for society. These societal benefits include increased economic productivity, higher tax revenues due to better-paying jobs, and societal improvements like reduced crime rates, improved public health, and stronger democratic processes.
Regarding policies for addressing these externalities, governments can introduce initiatives similar to those used for technology spillovers. This includes funding education directly, providing loans or subsidies, and tax incentives to make education more accessible and affordable. Collaborations between businesses, schools, and colleges can further enhance the real-world applicability of education, leading to a workforce that is well-trained and ready to contribute to the economy.