Kevin Carey has written an excellent essay for The New Republic about the costs and benefits of higher education. It deserves highlighting because it persuasively argues against an idea I have been attracted to, which has caught on in this blog, and which has been picked up — as he notes — in more and more media stories: that a college degree might no longer be worth it.
The first point he makes is that this story has been told before:
Sally Cameron thought she had done everything right. After studying French and Arabic at a tony liberal arts college, she knew that graduate school would help her career chances. But when she hit the job market, her Ivy League management degree didn’t seem to matter. . . . Sally paid the rent by tending bar and filled her time with volunteer work. Sally’s story sounds like the kind of depressing story filling the pages of newspapers and the popular press these days. There’s only one difference: Sally Cameron earned her master’s degree from Yale in 1980.
When we revisit Sally three decades later — and others who had stories just like hers — she’s doing well and wearing white collars.
Carey’s second point is that economic data show the financial returns to education are unquestionably very great, and only increasing, while wages for unskilled workers have stagnated:
Yet despite the increase in supply, the price that employers were willing to pay for college graduates went up, not down. The inflation-adjusted median wage of bachelor’s degree holders increased by 34 percent from 1983 to 2008. (The earnings for high school dropouts, on the other hand, fell by 2 percent during the same time.) People with graduate degrees did even better, increasing their earnings by 55 percent.
And his third point is that we can expect this trend to continue because as the world becomes more technologically complex, the financial returns to high cognitive ability will only increase.
All three points taken.
But I don’t think the facts Carey presents are dispositive. Here’s why: Those of us who question the price and value of higher education don’t disagree that people with B.A.s do much better in life, especially in employment. We disagree about the source of that advantage: The B.A. may mostly correlate with and signal for, rather than impart important qualities. (Really we all agree it’s some mix of the three factors — our differences are of emphasis.) The data Carey presents are perfectly consistent with this view.
#more#We skeptics think this: Since employers can no longer measure job applicants’ IQs nor put them through long apprenticeships, graduating college is the way job-searchers signal an intelligence and diligence that college itself may have contributed little toward. Employers are (to use a little economic jargon) partially outsourcing their employee search to colleges. This is a good deal for employers, because college costs them nothing, and the social pressure to get a BA means they won’t miss too many good prospective recruits by limiting their search to college grads. And higher ed is a good bet for each individual high-school senior because, in the current system, that’s what employees are looking for — and the payoff is still greater than the costs of college.
(In a funny way, Carey’s data almost supports this position: He notes that BAs’ salaries increased by 34 percent between 1983 and 2008; but other studies have shown that students studied less over the same period. So the BAs’ wage advantage was increasing, even as the knowledge acquired in its attainment decreased.)
To use one economic jargon just once more: If this view is correct, our higher-education system is a big prisoner’s dilemma. Every individual person — the high-school senior and the human-resources manager — has a rational incentive to pursue a BA, but the system as a whole is massively wasteful. There should be a way to prove high intelligence and cultivate diligence and refine social graces that doesn’t cost tens (or hundreds) of thousands of dollars and four to six years, and saddle would-be entrepreneurs with debt (and, dare I add, afflict young people with the grievances and resentments of the academic Left).
This is a roundabout way of saying that higher education as it exists today can simultaneously be a good bet for each student and a bad and outdated model for society as a whole.
Carey adequately proved the former point. But he did not, I think, disprove the latter point, and so his excellent piece should not detract from efforts to look for a more efficient way to provide the goods that higher education is currently providing at a too-high cost.