How much does increasing college-going rates matter to our economy and society?
Caplan: College attendance, in my view, is usually a drain on our economy and society. Encouraging talented people to spend many years in wasteful status contests deprives the economy of millions of man-years of output. If this were really an "investment," of course, it might be worth it. But I see little connection between the skills that students acquire in college and the skills they'll need later in life.
Much more here, including answers from Charles Murray, Richard Vedder and others. Hat tip to Arnold Kling.
By the same logic, isn’t reading blogs such as MR also a waste of output?
“By the same logic, isn’t reading blogs such as MR also a waste of output?”
Is the government subsidizing you to read MR for 4 years instead of working/acquiring skills?
If it’s such a waste, then how come employers seem to value it so highly? “Credentialing” or “signaling” is not an answer it’s a restatement of the question.
If you believe in the wisdom of the markets, then it makes more sense to ask what students learn in college that isn’t specifically related to their coursework.
Over-education is a market failure. Industrial psychologists have known for years that general intelligence tests, job knowledge tests, and personality tests (though imperfect) are all vastly better predictors of job performance than years of education, letters of recommendation, or interviews (structured and unstructured). Yet most employers care a great deal more about the last three than about the objective tests. Humans are reluctant to trust objective tests over “expert” opinion, and high status affiliations.
Like many other market failures, over-education is subsidized in a big way by government.
I think Murray is assuming at least an 115 IQ.
then why do so many foreign students study in the US? are they inframarginal? how big is the margin? is an american college education just a means to an end, an american job?
They are forbidden to use general intelligence tests that would be a much cheaper way of getting the same results.
A Stanford, MIT, Harvard, Princeton degree means that you not only have an IQ north of 135 but you’re also a type-a, perfectionist, work-a-holic. You wouldn’t want to hire a bunch of 150 IQs (based on a test) only to find that they are lazy, sloppy and unmotivated.
A Stanford, …, Harvard, Princeton degree means that you not only have an IQ north of 135 but you’re also a type-a, perfectionist, work-a-holic.
Unless you’re a legacy. But then, for those folks all those other attributes are pretty irrelevant.
“If it’s such a waste, then how come employers seem to value it so highly?”
It’s a Nash equilibrium.
Bryan’s comments are very much major-specific, and career-specific. If you’re planning on being a physicist, college is in fact a good investment and you will in fact likely learn things and gain experience directly relevant to your work. Ditto for other hard sciences, engineering, mathematics.
If he’s arguing that the classic liberal arts education doesn’t provide useful job skills, then I think that’s pretty much a given… It might or might now provide critical analysis skills. If you’re bright enough to make use of them, that is. For the top several percent, a classic liberal arts education can be wonderful, if done right, both in terms of personal fulfillment and skills gained.
another thing about colleges
http://barbarafrankonline.com/blog.php/2009/10/19/another-dirty-secret-about-college/
As long as college is the way to produce good grandchildren, parents will still pay for their kids to go to college, regardless of what appears nonsensical from a career standpoint. Assortative mating is the name of the game.
I’m guessing alot of the people who go to Stanford and Harvard didn’t work so hard to get there. The smarter you are, the less you have to work.
It is a vast waste of resources and time for almost all of those who go. If we could honestly test people’s aptitudes before hiring them, we could dispense with most college degrees. In addition, we could probably develop a more efficient system of apprenticeship if we had fewer restrictions on employment. However, the college cartel has captured an entire political party and a good portion of another.
I have a few friends that got liberal arts majors and have been unemployed for years since graduation. Total waste.
People seem to have trouble with the is/ought problem. I’m sure there are real reasons why it’s like it is, but it’s all such a joke from my end. I’ve changed disciplines in engineering. It wasn’t a total shift, but I spent exactly one year in classes. One year.
The past four years I’ve spent dicking around in the lab with professors and committee members doing their best to be unavailable. When I’m done, maybe another couple year tour of duty meddling in someone else’s lab and I’ll be qualified to teach. So yeah, I figure on-the-job would be just fine. As you can see, my education experience is not burdened by any endowment effect.
I think some of the commentors are fooling themselves if they believe education in engineering, geology, nursing, mathematics, microbiology, chemistry, computer science, and many other fields can be acquired as well on the job. Employers are not going to invest on-the-job hours teaching knowledge which prepares a worker for numerous career options. Employers are going to train an employee for one specific job.
Some of you younger folks may believe you can predict what job you wish to do for the rest of your lives, but you are almost certainly mistaken. Far better to possess broadly applicable knowledge than to be trapped in a role which becomes your prison cell.
John,
You are forgetting that if all training was provided on the job than entry level job responsibilities would be less.
For example, when you start in a bakery or a kitchen you mainly work to keep the place clean. As you master tasks, you are taught new ones.
This is not to say general education is not valuable. But it can be acquired through self-study and conversations with colleagues and tested through independent bodies (such as the AICPA).
basho: “You are forgetting that if all training was provided on the job than entry level job responsibilities would be less.”
I do not understand what you are meaning.
basho: “But it can be acquired through self-study and conversations with colleagues”
Sorry, but I disagree. One may be able to learn from colleagues how to do other technical jobs in the firm in which he works. But he’s not going to get exposure to technical jobs in other industries or even in other divisions in his same company.
Some folks may be able to self-acquire knowledge equivalent to a master’s degree in chemistry. But my guess is their acquisition will be far less efficient than if they enroll in a degree program.
Anthony says: “No – at the low end, a college degree is signaling that one knows how to read and write and generally show up, which is something which a high-school diploma no longer reliably signals.”
I wish some of my students knew how to read and write well BEFORE I had them in class. Sure, some students already have the skills, and they coast through. Some never learn. Others, hard as this may be to believe, actually do learn and improve during their time in college. If you believe people can learn some things on the job, why is it so hard to believe they could learn other things in a college classroom?
I question the mating benefit of college for most people. I find it odd we go away to school to find somebody with the same basic middle-class background we have. Marrying your high school sweetheart makes more sense today than 100 years ago when it was more common.
I’ve become increasingly convinced that every college and university, no matter its reputation, is to some extent just a diploma mill.
An earlier comment said college may have some use for physics, hard sciences, etc. but not liberal arts. I’d say there is some truth to that. I’d also say that for those hard sciences, increasingly, you need a graduate degree to succeed (they really don’t teach you all that much as an undergrad.) In that sense, a college degree only serves as a stepping stone to the more valuable graduate degree for some, and as a complete waste of time for others.
On the other hand, getting a decent college education can increase critical thinking, understanding of a variety of topics, and have other positive benefits that while not directly applicable to one’s chosen field of employment would make that person a more informed and responsible citizen.
Caplan’s argument makes a lot of sense. I don’t understand how communication majors, management majors, spanish majors(or other languages), etc. can possibly benefit more from a 4 year education than 4 years of experience. Isn’t it absurd to begin with that management is an actual major?
I think college is really only worth it (in terms of education and not merely signaling) for those who major in a skill that is immediately useful and difficult to acquire solely through experience: the sciences, engineering, math.
According to an OECD report on Science and Technology, only 16% of new college graduates in the US major in a science or engineering field compared to 39% in China, 38% in South Korea, 31% in Germany, 30% in Finland, and 25% in Japan. I find that to be a very interesting set of data.
Isn’t it absurd to begin with that management is an actual major?
Accounting, finance, economics, commercial law, labor law, employment law, and a lot of public speaking and group presentations, resulted in me being very well prepared for the lucrative career I eventually ended up in.
They certainly didn’t teach me about cash flow in high school and it’s not something you’d expect your first boss to teach you.
What should I have majored in?
The last time I was recruiting at MIT, one candidate mentioned his work and how he would be a valuable asset to the firm.
He was a bit stunned when I told him we mostly judged his work as proof of his willingness to work long hours, master difficult concepts, and synthesize ideas. That would encourage us to invest in his on-the-job training over the next several years.
Ah, youth.
why believe bryan caplan?
lots of people work for a while, go back to school, and then go back to work.
maybe ask them in what sense it was worth it, and why, and how much.
Success in college is a valuable signal b/c it is costly and competitive. Employers know the top students will likely be good hires.
I suppose you might ask then why don’t we use the same information (GPA, tests) and hire out of high school, thereby gaining 4 years of valuable output.
College is like the playoffs in sports. You take the top students out of high school and then have them compete against each other at a higher level. This is useful b/c it’s on a national level, whereas high school education quality varies across the country. And this can’t be done any earlier in life b/c most parents will not allow their students to leave home until their about 18 years old.
It’s actually a win overall for society to allow the best students to signal their quality so that the companies that really need them can find them.
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“lots of people work for a while, go back to school, and then go back to work.
maybe ask them in what sense it was worth it, and why, and how much.”
Babar, I did this. In almost no sense was it worth it. It is correcting an inefficiency with an ineffectuality. My last job sucked. I didn’t know how to find a better one. I knew how to do school.
So, I forwent, hmmm say $250,000 in income (before taxes) to pursue a PhD. That’s about the startup package for a professor. I should have just done something in my garage. I wouldn’t have had to prove that I’m smarter than the other students (I am). I wouldn’t have had to prove that I’m as smart as my professors (we’ll see). I’d be way ahead of where I am. I just wouldn’t have that piece of paper. But, from the beginning, the only reason I wanted it is because other people respect it, not me.
I read Caplan almost the same as Murray. The point is, if we completely stopped granting post high school degrees tomorrow, it 10 years would Coke, Cisco, and NASA just shut down? No, they’d just have to figure out how to find talent themselves. Could they identify someone and train them to do a job in less then 4-10 years? I bet they could.
We have all these different departments that are justified because they are so different, yet they operate almost identically. Hmmm. We have all these different people and yet they must jump through all the same hurdles. Hmmm. We have a system of experts selling their services to the ignorant…no, I’m not talking about the medical industry Dr. Krugman, I’m talking academia here.
If someone in high school had taught me how to use Mathematica, I could have learned a much larger amount of useful material than I did in my 6 years getting a graduate degree in statistics. Sure, I wouldn’t have learned many formal proofs and things like that, but I could have learned a much larger amount of material on my own with a computer algebra system and Wikipedia.
The problem is that no one would have hired me at age 18; I had to prove myself by getting a graduate degree. I think a company that hired talented and motivated high school students right out of school and trained them to do specific jobs (that includes math and engineering jobs) would have a tremendous amount of success, because these students would be more useful to them by age 22 than their college-bound cohort, and they also would have less leverage to leave the company and seek a higher salary elsewhere, so they could be paid less than their college-educated cohort as they age.
“Employers are not going to invest on-the-job hours teaching knowledge which prepares a worker for numerous career options.”
Not in this world, but long term commitments and apprenticeships are pretty common throughout history. It boggles the mind to think how different our world could be.
@bjk
I very much doubt it. The elite universities definitely select for overachievers — students who excel in multiple extracurriculars, or found charities, or are doing high-level research, etc. These things require more than just ability, but extraordinary effort. (Not to mention: wealthy parents so you don’t need a job, great schools with the programs available, etc.) Having great test scores and grades are necessary but not sufficient criteria to gain acceptance at a place like Harvard. I speak from experience — I had good grades and very high test scores coming from high school, but was systematically denied from top Ivy-type colleges. My extracurriculars and other qualitative achievements were just average. This was 6 years ago, from what I’ve heard the elite universities are even more selective now.
Portal Fan: “Isn’t it absurd to begin with that management is an actual major?”
Why is it absurd? Do you know the coursework for a management major? Have you worked with corporare executives enough to understand the inputs they must assess in reaching decisions?
In order to understand the environment in which he operates and makes decisions, a corporate manager is likely to need a general understanding of: financial and cost accounting; corporate finance; business and international law; industrial psychology; microeconomics; design of management information systems; inventory and production systems; use and limits of statistics and marketing research. While it is true that such knowledge might be acquired through self-study and on-the-job, that’s not the efficient way to go about it. Furthermore, learning exclusively on-the-job is a pretty good prescription for career immobility.
1. Education is free it is the diploma that costs you.
2. I think that we should separate education and testing.
3. Education is not equal to schooling.
No doubt about it, Caplan really has those bien pensant types nailed with this one! How stupid of
us not to have realised that what we really need is a society where even fewer people have heard of Dostoevsky
or Hobbes! After all, what value could there possibly be in lots of people knowing about their common cultural
inheritance? They might make a bit less money and watch a bit less reality TV, and we can’t have that.
(Sigh. Seriously, gg, Dan*, and Yomtov have it right.)
Look, let’s stipulate that going to university is on average a net
loss, dollarwise, over a lifetime. That doesn’t in itself show that it’s
not something that people would be better off doing. Cf. having children,
writing a novel (even a bad one), marrying someone who’s a good and fun person but
doesn’t earn much, etc.
The question is not whether having a degree is better than not having one. Of course it is. Knowledge is good. More knowledge is better.
The question, however, is whether college is worth it in terms of opportunity cost. That’s a much more difficult question.
Take two people – send one to college on his own dime, and let the other one start working in a trade. In four years, the tradesperson will have earned as much as $100,000 – $200,000, have a journeyman certification, four years of job experience, AND will have received a significant education in many skills. The college student will be $100,000 in debt or more, and be entering the work force with no job experience other than summer jobs. Most likely, the type of job he or she can qualify for will pay substantially less than the journeyman tradesman is earning. And if it takes the college grad 10 years of paying off student loans before he or she can start saving for retirement, it will take a significantly higher level of paycheck deduction to achieve the same amount of retirement savings as the person who started saving at age 20.
Unless the college student studied engineering or law or pre-med or another subject in a high-paying field, or is so gifted that he or she will rapidly parlay a degree into a meteoric climb in the business world, that degree could be a financial disaster. I have friends in their 40′s still paying off their student loans while working jobs totally unrelated to what they studied in college.
The most damage is done to the children of working class people – those who don’t qualify for major scholarships or financial assistance, and whose parents are not wealthy enough to absorb the cost of their education. To such people, a general arts degree is a luxury they cannot really afford, but they are pressured into it by society, by the availability of student loans on terms that ensure they won’t feel the pain of the borrowing for years, and by their parents’ desire to see them have a better life.
Warehousing such people on their own borrowed money for four years and rewarding them with meaningless degrees in watered down general arts subjects that will not give them useful life skills is a net loss to society, and a disaster for the students.
We need to support alternative forms of education for such people. More university-transfer programs at 2-year colleges, more alternative education avenues like internet courseware, on-the-job mentoring, and adult-learning programs. In the internet age, we should also be more flexible in how we evaluate the skills and character of the people we hire. There are a lot of ways people can educate themselves now, and a lot of ways they can exhibit their education and intellect.
I’m unimpressed by almost everything Caplan says. For instance:
Caplan: From a moral point of view, far too many students are going to college—just as far too many people stand up at concerts.
Really? The equilibrium is that either everyone stands up (and, I guess by analogy, gets an education)or no one stands up. And most people actually derive tremendous enjoyment from standing up at a concert and dancing around. So what’s his point? He’s completely confused.
Actually, I think being in college has both pros and cons which are measured by individual’s perspectives. On the bright side, colleges mainly concentrate on individual’s developments and career skills. It seems that students who attend college will be more matured, skillful, and successful. They have the knowledge of “basics” which are primarily communication and technology skills. Even though these skills may not sound so important, but they will come in handy in work fields. Besides, holding a college degree has been evaluated and recognized more than ever in today’s society. Therefore, tuition cost becomes one of the major issues as being in college, especially in private schools. It is simply because the better academic reputation a college has the more tuition it will cost. As the cost keeps increasing significantly, more people will not be able to afford it and many will discontinue their studies.
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