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What this article does successfully through hyperbole is to remind us to add opportunity costs into evaluating the value of an education. Your quibbles about

What this article does successfully through hyperbole is to remind us to add opportunity costs into evaluating the value of an education. Your quibbles about the obviously rough numbers don't subtract much from that key point. It obviously doesn't make sense to abandon education, but it also obviously doesn't make sense to pay $500k for it. "That the current salaries of recent college graduates represent their probable average output over their lifetime." It doesn't represent that at all. It is saying that the value due to education can be roughly approximated by the starting salary. The gains from there are then more based on experience/work, not the education. Of course, you ignore the money made while you would have been in school. You also ignore the periods of unemployment. "I don't believe that the complete value of the education is in its utility for the labor market." The fundamental question though is how much we should pay for it. I could read books, do "home work", and watch MIT lectures on the internet for a lower price. Many people are looking for ROI. "That there is a reliable way to make a ten percent return on investment overseas." A rough number, but definitely too high. The world is over-invested anyway as a result of too much money having been created. "And that the normal personal investment into a college education is really $300,000. This is anti-factual. It is probably also wrong that each marginal elementary schooler costs $200,000, but I can't say for sure about that." I don't think it says personal investment, the distributed cost counts too. It costs about 20k per year here for elementary school and 25k for high school, to be conservative. You don't need to look at the marginal costs here, because they are your costs.

btilly 16y ago
"That the current salaries of recent college graduates represent their probable average output over their lifetime." It doesn't represent that at all. It is saying that the value due to education can be roughly approximated by the starting salary. The gains from there are then more based on experience/work, not the education. Of course, you ignore the money made while you would have been in school. You also ignore the periods of unemployment. That is indeed what it says, but that reasoning is wrong. He's commenting that most of these expensive kids are unemployed and therefore make nothing. That is due to the economy. However the first job they get is likely to be at a higher salary than non-college students, and a college degree enjoys a permanent advantage throughout life in getting jobs and getting raises. Even several years out of college, many employers will look at the presence of a degree when hiring. And it is an advantage again if you need to switch careers. (Which is becoming very common.)
- wyclif 16y ago
  And it [a college degree] is an advantage again if you need to switch careers. (Which is becoming very common.) But where's the educational correlation between a degree in a specific discipline and a change to what is presumably a different discipline? If I have a degree in Literature, I'm an editor at a publishing firm, and I get fired and then get a job in, say, the biological sciences, how is my degree intrinsically an advantage other than as a barrier to entry (a weeding-out tool) to the professional class, which is not purely educational in nature?
  - btilly 16y ago
    You've put your finger on an important issue. For the person with a degree, there is an advantage in passing that barrier to entry. But why is that barrier to entry there? From the point of view of the employer, a degree indicates that the possessor has, among other things, a certain level of intelligence, literacy (not a small deal in a country where over half the country is functionally illiterate!), experience in learning, general background, work ethic, and socio-economic status. It is therefore a somewhat useful filter to apply for many professions. Of course most of those traits have nothing to do with what you actually learned in university. And there certainly are plenty of successful people with all of those traits who did not bother with university. So even though I believe that for most people, education is worthwhile to that person, I'm far less certain that society as a whole benefits much from all of the money spent on higher education. (And I become even less certain when I look at how wasteful the process has become. Costs have been going up faster than inflation for decades, with no apparent reason than that everyone in the process knows that they are free to raise costs by that much, and it is always easier to spend more money than it is to spend less.)

btilly 16y ago

"That the current salaries of recent college graduates represent their probable average output over their lifetime." It doesn't represent that at all. It is saying that the value due to education can be roughly approximated by the starting salary. The gains from there are then more based on experience/work, not the education. Of course, you ignore the money made while you would have been in school. You also ignore the periods of unemployment. That is indeed what it says, but that reasoning is wrong. He's commenting that most of these expensive kids are unemployed and therefore make nothing. That is due to the economy. However the first job they get is likely to be at a higher salary than non-college students, and a college degree enjoys a permanent advantage throughout life in getting jobs and getting raises. Even several years out of college, many employers will look at the presence of a degree when hiring. And it is an advantage again if you need to switch careers. (Which is becoming very common.)

wyclif 16y ago
And it [a college degree] is an advantage again if you need to switch careers. (Which is becoming very common.) But where's the educational correlation between a degree in a specific discipline and a change to what is presumably a different discipline? If I have a degree in Literature, I'm an editor at a publishing firm, and I get fired and then get a job in, say, the biological sciences, how is my degree intrinsically an advantage other than as a barrier to entry (a weeding-out tool) to the professional class, which is not purely educational in nature?
- btilly 16y ago
  You've put your finger on an important issue. For the person with a degree, there is an advantage in passing that barrier to entry. But why is that barrier to entry there? From the point of view of the employer, a degree indicates that the possessor has, among other things, a certain level of intelligence, literacy (not a small deal in a country where over half the country is functionally illiterate!), experience in learning, general background, work ethic, and socio-economic status. It is therefore a somewhat useful filter to apply for many professions. Of course most of those traits have nothing to do with what you actually learned in university. And there certainly are plenty of successful people with all of those traits who did not bother with university. So even though I believe that for most people, education is worthwhile to that person, I'm far less certain that society as a whole benefits much from all of the money spent on higher education. (And I become even less certain when I look at how wasteful the process has become. Costs have been going up faster than inflation for decades, with no apparent reason than that everyone in the process knows that they are free to raise costs by that much, and it is always easier to spend more money than it is to spend less.)