2014-05-28 — nytimes.com
When experts and journalists spend so much time talking about the limitations of education, they almost certainly are discouraging some teenagers from going to college and some adults from going back to earn degrees. (Those same experts and journalists are sending their own children to college and often obsessing over which one.) The decision not to attend college for fear that it's a bad deal is among the most economically irrational decisions anybody could make in 2014.
The much-discussed cost of college doesn't change this fact. According to a paper by Mr. Autor published Thursday in the journal Science, the true cost of a college degree is about negative $500,000. That's right: Over the long run, college is cheaper than free. Not going to college will cost you about half a million dollars.
We disagree with the thrust of this article. We think what the stats are showing is little more than: getting a 4 year degree is now so "trivial" and standard, that it says more about your own lack of discipline (and probably presence of mental/behavioral problems) to not get the degree. In other words, its not that people with the college degrees are "so good"; it is just that they have "proven" they are not "THAT" bad. They are not, in other words, the absolute dregs of society.
Even more stark facts regarding differences in outcome apply to the question of whether one completes high school. But no one is advocating that high school is worth $100-200k.
The significant phenomenon here is the poor cultural knowledge and practices of those who tend not to go to college; not that others are affirmatively gaining much of an advantage from college. After all, does anyone seriously find bachelor's-level grads generally more employable specifically because of college? Everyone knows that a "Master's is the new Bachelor's", and if you actually want to get ahead (not just not fall behind), you need an advanced degree/training.
Further, if the same college-bound kids skipped college and went to work, they'd probably still be more responsible (better workers, savers, etc.) than the types that typically don't go to college -- they would tend to save earlier, and quite likely, close the gap between their college-bound peers. Thus, the $500k lifetime income improvement doesn't impress us. (There are other flaws in the analysis, e.g., that a recession or depression lowers the lifetime earnings of those who enter the job market in it, and if this cohort were individually analyzed, the benefit of college would likely be even more slim. )
Also the whole commentary misses the overriding fact that the median and average real incomes are stagnant to falling (depending on the inflation index used) over the last generation. Obviously college grads are included in that, which means we truly are comparing the rate of sinking stones to pebbles.
We feel the most on-point part of the article is:
We'd be severely reticent to call the median college-grad wage "middle class" these days, but would agree that such people will tend to be better off than the types of people who don't go to college at all (or don't finish it). That doesn't necessarily say much about the actual performance of the higher education system. And this is totally ignoring that its real cost increase has far outstripped any metric of improvement in "benefit".
Thus, by Leonhardt's logic, the higher education system will be "beneficial" until the moment that its inflated cost is one dollar more than the lifetime marginal improvement to the student's income. Whoopie. As above, the analysis that has been done on that question so far is flawed and unscientific in that it doesn't measure the other half of the equation (earnings of the college-bound cohort that opts not to go to college), but even ignoring that point, we are fast heading in the direction where the fiscal benefit of a typical undergraduate degree is minimal. This direction of change seems not to bother Leonhardt, but it bothers us.
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