Education fact of the day

Estimates suggest an average annual consumption value of college as high as $11,600, with considerable heterogeneity across students. Incorporating these benefits raises the average expected return to college by as much as 14%.

That is from a new NBER working paper by Yifan Gong, Lance Lochner, Ralph Stinebrickner, and Todd R. Stinebrickner.

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So college should be free?

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Different dudes, but they define it thus:

"we categorize as “consumption,” including college spending on student activities, sports, and dormitories."

Not sure this is "shout it from the rooftops."

Dorm living has a cost, and the benefit is that you get to live in a dorm. Maybe you move from your room at home to share a room with a couple strangers. From a queen size to a bunk bed.

Yay?

I guess you could commute, but dorms seem to be a necessity. They are a quite a bit nicer than they have been in the past, along with some of the other facilities that are on campus now.

Sure. When parents send kids off to live in a dorm, rather than attend a commuter school, they are in part making a lifestyle choice for their kid.

But I still balk a little at this "consumption value of college" because it is also in a sense a forced choice. Maybe the best ranked college which admits you necessitates dorms.

Or worse, the best ranked college which admits you demands out of state tuition.

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View college as a 5-year Animal House-style vacation, and it's a bargain!

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College was great, I would definitely do it again. And this consumption value estimate was at Berea College; I bet it would be much higher at some other schools.

Go do it again, then. Who's stopping you?

At the top colleges, the majority of alumni go to graduate school.

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The Stinebrickners have been doing a lot of writing about higher education in recent years, AFAICT their working papers are published by the NBER. Most NBER papers are by professors who are from well-known research universities rather than from Berea College, I wonder if Prof. Stinebrickner has a connection with someone at the NBER, or if this represents an ongoing gradual percolation of research talent to all levels of higher education, not just the research universities but the small private colleges too.

Places such as Williams College have had econ research institutes or programs for decades. But an NBER working paper from someone at Berea College is still unusual (or would be, except Prof. Stinebrickner has been publishing working papers there for several years).

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I would like to see that broken out between government jobs and private industry.

Also, most people get liberal arts or social study degrees and then are homeless. If it sounds too good to be true, it usually is.

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Trump, please end this policy:
"You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy."

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