According to a report from the U$.$S$.$ Census Bureau, "the average $[$lifetime$]$ earnings of a full$-$time, year$-$round worker with a high school education are about $\backslash (\backslash$$ $1\mathrm{.}2\backslash )$ million compared with $\backslash (\backslash$$ $2\mathrm{.}1\backslash )$ million for a college graduate." This indicates that there is a considerable benefit to a graduate from investing in his or her own education. Tuition at most state universities covers only about two$-$thirds to three$-$quarters of the cost, so the state applies a Pigouvian subsidy to college education.

If a Pigouvian subsidy is appropriate, is the externality created by a college education a positive or a negative externality?

A college education generates positive externalities.

$\backslash ($ L$\_\{$c$\}\backslash$sim A $\backslash )$ college education generates positive externalities.

That a Pigouvian subsidy is appropriate does not imply that any externalities are generated.

A college education generates negative externalities.