Comments on: What’s the real value of a college education?

By: rc_moore

rc_moore — Thu, 15 Oct 2009 05:18:43 +0000

“What I object to is the assumption that the entire earnings increase is caused by the college education.”
You are right, we can’t assume that, and no such assumption has been made. But we can’t assume the factors you list make any difference to the overall average either, without data.
“It is possible, for example, that smart people are more likely to graduate from college that dumb ones”
This is likely to be true, but is it likely that a smart person, on average could make as much without the college education? I think not. So, the economic benefit of college remains. And in fact, it may be much greater than 25000 for the smart person. Remember, the average may be pulled down by the mediocre person who gets a college education, but does not do much with it.
And a smart person who does not go to college would inflate the non-college income also (the assumption is that being smart, they maximize any endeavor), so it may all even out.
“Another example — perhaps people from rich families are more likely to graduate from college than poor ones. Perhaps rich people are more likely to earn more because of family connections that help them get job interviews. Perhaps the rich do better because they had better diets growing up; maybe they are more likely to land high paying jobs because they can afford nicer clothing for the interviews…”
Again all this may be true. But you are looking a very small percentage of the population, that will probably not greatly affect the average. And presumably, the rich do well whether they go to college or not, so their effect is found in the non-college data also.
And if you look at the data more closely, the economic benefit of a college education really pays off for minorities, who presumably are not, on average, rich.
Your hypothesis really has no support, in either the data, or the casual analysis. There is really nothing to suggest that on average, a college education is anything but a major economic benefit.

By: David Annis

David Annis — Thu, 15 Oct 2009 02:06:40 +0000

rc_moore, the article that you quote says that college graduates made more than $25,000 a year more than those without college degrees. My point is that while I am confident that the number given is reasonably accurate I doubt that the entire difference is caused by the increased economic value that college adds to the output of those workers. It is possible, for example, that smart people are more likely to graduate from college that dumb ones. It is also possible that smart people would, on average, earn more than their less intelligent peers. How much of the difference in earnings is attributable to the additional intelligence and how much is due to the college education?

Another example — perhaps people from rich families are more likely to graduate from college than poor ones. Perhaps rich people are more likely to earn more because of family connections that help them get job interviews. Perhaps the rich do better because they had better diets growing up; maybe they are more likely to land high paying jobs because they can afford nicer clothing for the interviews. How much of the additional earnings of college graduates can be accounted for by the fact that those from poor families are under-represented in the pool of college graduates?

I am quite sure that the entire $25,000 difference in earnings is not because of the value that college adds to the output of its graduates. What I object to is the assumption that the entire earnings increase is caused by the college education.

By: Christopher

Christopher — Wed, 14 Oct 2009 18:33:12 +0000

It just depends on what you are going to college for. Go for what you love, not for what you think your going to make money doing. Not for some specific degree that like is said above, most likely will be applied minimally to the job you actually end up getting.
I am personally going to school for philosophy, and having access to other “thinking” individuals and the ability to argue/debate is very worthwhile. For other art related degrees, the access to other people, professors is the reason for going.

But yeah, if you are going for something specific, just go intern, would get you headfirst into the actuality of the job quicker.

By: rc_moore

rc_moore — Wed, 14 Oct 2009 18:33:06 +0000

It turns out the the U.S. Census has the answer to the question “what is the economic value of a college education”:

How Much Is a College Degree Worth?
How much is a bachelor’s degree worth? More than $25,000 a year, according to a March 2007 report from the U.S. Census Bureau. Adults aged 18 and older with a bachelor’s degree earned an average of $54,689 in 2005, while high school graduates earned $29,448. A two-year associate’s degree brings an average annual premium of $8,500 over a high school diploma.

From http://www.mdrc.org/area_fact_33.html. I verified the source data from http://www.census.gov.

By: rc_moore

rc_moore — Wed, 14 Oct 2009 17:46:27 +0000

Andy, Jacob –
Have you considered that maybe “you don’t know” what “you don’t know” and this gives you a false impression of the value of knowledge?
Since we are being anecdotal here; I never appreciated the value of much that I had learned as an undergraduate until graduate school.
I would also suggest that most exist in a sort of “blindness” about the contributions of the highly educated, that allow most of to exist in a world where we can “pretend” that knowledge is overrated.
I personally am very glad that a small group of our population makes the economic and lifestyle sacrifices necessary to maintain our civilization.
The way to resolve this argument is with objective evidence, none of which has been presented. Arguments against a historically productive system without it are naive and of little value.

By: Jacob Vohs

Jacob Vohs — Wed, 14 Oct 2009 04:34:10 +0000

I have a college degree. My son is working a two year technical degree in Industrial process control. He will Make more than me in a few years after graduation, and I have a good state job, and more money than most PhD grads. With regard to money 4 year degrees are over rated and stupidly expensive.

By: Andy Kaiser

Andy Kaiser — Wed, 14 Oct 2009 03:37:01 +0000

In part a reponse to RC, in part a response to the article:

College and university education is great for specialized training, allowing students to delve deep in a particular topic. But a lot of undergrads don't need that!

I've actually been considering going back to college for a couple classes - training that would compliment my current job. But I also agree where the article talked about the needlessness of the overall college experience. In my case, I learned a lot, but very little of it applied to my eventual job (even though my degree and job are in the IT field). I probably would've been better off financially and received far more experience if I'd interned instead of going to college.

Andy

By: rc_moore

rc_moore — Mon, 12 Oct 2009 17:48:14 +0000

David –
You seem to be discounting the fact that certain areas knowledge can only be obtained (for the vast majority of us) in a university setting. For many professions, little or no income can be earned without an accredited degree certifying some level of competency.
I guess you could argue that the cost of certification will not equal the earning capacity of the profession, but it is not all about money, it is often about the happiness of working in a field one loves, not just in a field that generates the highest career profit, that drives the decision making process.
Can you explain , with a specific example, why you feel that a career goal that requires advanced knowledge could be obtained without the education a university supplies?
I don’t see evidence in your essay that other practical options truly exist.

By: Andy Kaiser

Andy Kaiser — Mon, 12 Oct 2009 13:59:12 +0000

David, let me know if you want the title changed, and I'll change it. It's too late for the podcast, but I'm happy to modify the text.

Andy

By: David Annis

David Annis — Mon, 12 Oct 2009 13:29:13 +0000

I now realize that perhaps I should have titled this what’s the economic value… or what’s the net present value…
The real value is not economic; the real value is in not being ignorant.