Markets can be efficient or inefficient; so can governments. thus market failure is a counterpoint to government failure. - Nicholas Barr

So far as school education is concerned, many of the assumptions necessary for market efficiency fail, the main problems being imperfect information, imperfect capital markets, and external effects.

Education to the extent that it raises an individual's future earnings, increases her future tax payments; in the absence of any subsidy, an individual's investment in education confers a 'dividend' on future taxpayers.

Money income is a flawed measure of individual welfare.