Explain the concept of merit goods with reference to the formal provision of education in a country. 

Merit goods are those goods and services that society values and the government (state) encourages in order that positive social advantages are generated. It might be that individuals will need encouragement for consumption of these goods and as the government may subsidise or even provide such goods and services free at the point of delivery. Merit goods might be provided by either the public or private sector and include health services, work training programmes, public libraries and education. 

Education

Education is considered a merit good because it:

• Gives a stimulus for research and problem solving which can add to the long term growth of a national economy;
• Encourages a more enlightened society and social cohesion;
• Is a driver to rising incomes and productivity for current and future generations.