43 ms·

Governments have overestimated the economic returns of higher education

244 points by denzil_correa 9y ago

anovikov 9y ago
Obvious reasons: locking young people in universities in their highest testosterone years reduces crime and drug addiction. Especially among people who don't get to have much returns from that education.
- deleted 9y ago
  [deleted]
- bognition 9y ago
  There's actually pretty solid evidence that its over educated men without job prospects that are a major force in driving people Jihad: http://news.mit.edu/2017/why-some-muslim-clerics-become-jihadists-1109 http://news.mit.edu/2017/why-some-muslim-clerics-become-jiha...
  - gowld 9y ago
    That article is strangely over-focused. Students and intellectuals have long been revolutionaries across many cultures and centuries.
- have_faith 9y ago
  > reduces crime and drug addiction General crime maybe...drugs not so much.
- ztoben 9y ago
  Universities are a hotbed for binge drinking and drug use. So I'm not sure I buy into that.
  - eeZah7Ux 9y ago
    Not in every country. Please do not generalize.
  - lambda_lover 9y ago
    I don't think college campuses have a reputation for violent crime, though. I think the point is that maybe the students are ruining their own lives through drug abuse, but they aren't robbing/killing/maiming others. Considering how safe I'd feel on a college campus at 2am on a Friday night compared to a rundown section of town, I'm tempted to believe that college does keep kids away from the worst of violent crime. I can't find any studies on the subject, unfortunately.
- leetcrew 9y ago
  > Obvious reasons: locking young people in universities in their highest testosterone years reduces crime and drug addiction this could very well be true, but it hardly seems obvious. i could readily believe that fewer serious crimes occur at universities, but it seems like the combination of a large, low-friction network and a general blunting of consequences would lead to more drug use at least, and the ability to avoid or defer direct consequences does tend to exacerbate addictions and increase their harm over time.
- DanAndersen 9y ago
  I wish you weren't downvoted, as there is a core insight in it. Back when universities were a thing that young aristocratic elite men attended, part of the implicit function was to get potentially troublemaking young men isolated from a lot of greater society while they worked out some of that energy and matured. But I think the modern equivalent is closer to high school, because we have a society that places inherent value on universal grade school education, and thus mandates attendance (anti-truancy, etc). One unfortunate effect is that for some, school ends up feeling like a prison or holding pen just to keep some young people off the street and out of trouble.
gesman 9y ago
Little to do with economic returns. Unrevokable student debt is one of the biggest government assets.
- philipov 9y ago
  Only for a sufficiently restricted definition of asset. You're thinking of the article that was referring to financial securities. Student debt may be leading in that category, but the government doesn't own much in the way of financial securities compared to land and military assets.
  - gesman 9y ago
    “ Over the last decade or so, there’s been an absolute explosion in student loans, growing from $260 billion in 2004 to $1.31 trillion last year. So, the total value of student loans in America today is LARGER than the total value of subprime loans at the peak of the financial bubble. And just like the subprime mortgages, many student loans are in default. According to the Fed’s most recent Household Debt and Credit Report, the student loan default rate is 11.2%, almost the same as the peak mortgage default rate in 2010. This is particularly interesting because student loans essentially have no collateral. Lenders make loans to students… but it’s not like the students have to pony up their iPhones as security. That’s what made the subprime debacle so dangerous. Millions of homes were underwater, so when borrowers didn’t pay, lenders didn’t have sufficient collateral to cover their loan exposure. With student loans, there is no collateral. Lenders have no security to recoup their loans. So when students don’t pay, someone is going to take a hit. That ‘someone’ will likely be you. That’s because hundreds of billions of dollars of these student loans are either owned or guaranteed by the United States government. So as borrowers stop making payments, it’s the taxpayer who will suffer yet another massive loss. Let’s be honest, though, there’s something seriously screwed up with this system. Young people are pushed into this system by a society that places an irrationally high value on university degrees. Kids are told for their entire lives that if they study hard to get into a good school, there will be a great career waiting for them. For many young people this turned out to be a total lie. In fact, Federal Reserve data once again show that, for at least 25% of college graduates, salaries are no higher than for people with just a high school diploma. Racking up so much debt hardly seems worth it. It seems bizarre to begin with that an 18-year old will know what s/he wants to do in life, to the point that they should take on $50,000 in debt for a piece of paper that might not even make them marketable. What did any of us really know at age 18? And how many of us could have accurately predicted our life’s path? Very few. And yet there’s an absurd amount of pressure to force young people into this system that heaps debt upon them. “ — Simon Black
TallGuyShort 9y ago
While I agree the the economic impact of government-assisted education is often overstated (or at least misunderstood) and that a degree and an education is not a 1:1 mapping in either direction, education for education's sake is a perfectly worthwhile goal, IMO. That often seems to get forgotten in these discussions.
- theseatoms 9y ago
  Yeah. Just recognize it as "consumption" rather than "investment" in economic terms. People usually conflate the two with regard to home-ownership as well.
  - Symmetry 9y ago
    Even if education were entirely a matter of signalling (which obviously isn't true) then it would still be a perfectly good personal investment in that it would get you a better job than you would have otherwise. It would just be social subsidies of it that would be consumption rather than investment.
  - triplesec 9y ago
    I must strongly dissent. The investment in education-not-training often benefits society in other ways, which turn out to be indirectly economically beneficial, and directly and indirectly socially constructive; these lead in most cases on average to a greater happiness and complexity and learning in such a society, in a positive feedback loop. So no, I think the dismal bottom-line assumptions of your economics are sorely lacking.
- DanAndersen 9y ago
  Absolutely, but education for education's sake can easily be provided for cheap or free via MOOCs, continuing education, The Great Courses, or just picking up old books and reading them.
  - TallGuyShort 9y ago
    I agree wholeheartedly - despite how my comment sounds I have very negative feelings on the university system in the U.S. and how overused it is. My father was actually invited by a local youth group to address the kids on the importance of education a few years ago, because they thought he was very well educated. He showed up and informed them that he had dropped out of his third-world country high school and never regretted it, and then he showed the kids a bunch of books on random areas he had enjoyed and told them stories of how he applied that knowledge to various jobs to solve problems, help people, and advance his career. Stuck with me.
bhauer 9y ago
In a surprising demonstration of not burying the lede, it's given away by the subheading: "Earning a degree is about signalling, and not just learning."
- danans 9y ago
  > "Earning a degree is about signalling, and not just learning" This is nothing new. It was this way since the beginning of higher education in religious institutions. Higher education was a social signal that gave clerics power over many aspects of society in their roles as religious leaders and advisers to rulers. In Europe it was common for non first-born sons of aristocrats to go into the clergy via the academic route. They didn't do this to give up power, but to associate themselves and their families with powerful religious/academic cultural institutions. Even during the post WW2 broadening of higher education access, it served as a bridge to upper social classes. You can't get rid of the class signalling aspect unless you can get rid of class as a cultural phenomenon, which is unlikely. Being broadly educated will always be a signal of class, no matter how it is achieved, simply because it implies that you had the resources to study things that are not of immediate vocational value. But many aspects of higher education that don't have vocational value have a lot of value in creating an informed, adaptable citizenry. You can, however, reduce the degree to which higher class association via higher education is needed in order to learn skills needed to achieve a decent livelihood. One way to achieve this is to reverse the trend of large cuts to public higher education funding, which is the largest factor in the increased costs of those institutions [1] (not fancy buildings). [1] https://fivethirtyeight.com/features/fancy-dorms-arent-the-main-reason-tuition-is-skyrocketing/ https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...
scottlocklin 9y ago
"since 1970 the share of workers with degrees has increased in virtually every occupation. But in around half of occupations with better-educated workers average wages have still fallen in real terms. " -I love it when "the economist" forgets how "supply and demand" work. Real talk: it's easier to govern a nation of debt serfs who have to take out loans to take a glorified IQ test.
kbutler 9y ago
Because most people do? Because it's a sacred cow that you cannot criticize? Because most of the elites have elite university credentials (almost by definition)? e.g., see Peter Thiel's criticisms https://techcrunch.com/2011/04/10/peter-thiel-were-in-a-bubble-and-its-not-the-internet-its-higher-education/ https://techcrunch.com/2011/04/10/peter-thiel-were-in-a-bubb...
- gt_ 9y ago
  One of his regular points that is hardly controversial as far as I can tell. It seems solid to me. I think your summary gets at a key aspect of it too.
- watwut 9y ago
  Huh? For something you can not criticize, I see a lot of criticsm. Both now and in the past.
- forapurpose 9y ago
  > it's a sacred cow that you cannot criticize That is hardly the case; it's trendier to criticize than to defend. > Thiel Thiel has many crazy ideas, some of which lack the sophistication of an undergraduate paper. Money doesn't make you smart, but perhaps college would have helped him. (EDIT: Apparently he did go to college and graduate school; my point was mostly snark, but some education in many issues saves people from thinking they are too clever.) It's no surprise that someone who openly wants to disempower the public and eliminate democracy would be against the public becoming educated and empowered.
  - war1025 9y ago
    > Money doesn't make you smart, but perhaps college would have helped him. It says in the article that he went to Stanford and Stanford Law.
  - kbutler 9y ago
    It's trendy to criticize the monetary cost of higher education, but it's perceived as a near-necessity, with counter-examples being considered noteworthy ("Bill Gates and Steve Jobs dropped out of college!")
sremani 9y ago
The relationship between Education and Prosperity is funny one. Argentina and Egypt are good examples of societies that got educated but did not see economic returns. (source: nntaleb). A prosperous country gets more educated but an educated country may not always prosper.
- conanbatt 9y ago
  ARgentina's public education is disastrous at all levels. While we have a public university that is free, mostly middle class goes there. Upper class goes private, and lower class does not graduate highschool. Our high-school graduation rate is 50%. And our public college graduation rate is about 50% as well.
- crdoconnor 9y ago
  Also Russia. Poor countries with excellent education systems usually end up with brain drain - their education budget subsidizing the richer countries their smartest citizens inevitably flee to.
kodis 9y ago
I suspect that at least some of this is due to confusing cause with effect: people see that most highly successful people have a collage degree, and wrongly conclude that anyone with a collage degree will be highly successful. A few of the other problems with this increased drive to send people to collage is that now a collage degree is required -- as the article points out -- as a signal of employability even for jobs where a high school education would suffice; a drive away from trade school, even when a job in the trades pays well and is quite secure; and of course the debt load that comes with collage, even for a degree is in a field with little chance of providing a good return on the cost of the degree.
- collageking 9y ago
  i too have a degree in collaging. my friends call me Scrapbook King.
- kgwgk 9y ago
  > Collage (from the French: coller, "to glue";[1] French pronunciation: [kɔ.laʒ]) is a technique of an art production, primarily used in the visual arts, where the artwork is made from an assemblage of different forms, thus creating a new whole. :-)
  - tpurves 9y ago
    To be fair, studying collage did famously turn out pretty well, and economically too, for some young people like Picasso and Braque :) http://www.ideelart.com/module/csblog/post/159-1-cubist-collage.html http://www.ideelart.com/module/csblog/post/159-1-cubist-coll...
  - cirgue 9y ago
    Collage is good, but I hear that if you really want to join the economic elite, you have to get into decoupage.
    - jxub 9y ago
      Fitting into that decoupage Was a torturing massage To the pain camouflage I gobbled a hefty sausage That prospect was still better envisage Than college, lectures about collage
Parcissons 9y ago
I think one of the most underestimated economic returns is the paranoid spending of a military complex. Those guys go nuts in a way a market simply cant- computer chips, the internet, jet-planes, rockets- to be honest, i wish the us-military and china would duke it out in this space, obviously without nuclear weapons- out there in space. The sovjets have nuclear missiles in europa- we need missiles on Io to counter this, or our magnetic harvest rights might become conested, mr.president. The longer i live, the more the whole of the western economic machinery, seems just like a waste product consumer of the military industrial complex. Yes, the actual wars are pretty useless and horrific- but those guys would get fusion done, if they believed the enemy was allmost theire. None of this 50 year waiting bollocks. If you are honest, Musk basically only gets us back where the US was in the early 70s.
lamename 9y ago
> But in around half of occupations with better-educated workers average wages have still fallen in real terms. Did I miss something? "Half" is not a substantial argument without more detail. What about the other half? Stagnant? Rising a little? Rising dramatically? Which types of jobs fall into each bucket? Not against the signalling argument per se, I'm just missing information.
kermittd 9y ago
This was mentioned in another comment but nothing about "education" is about actual education. It's primarily about credentialisim and not being locked out of a career with a high ceiling. Though I disagree with many of his political opinions Peter Thiel I think is right on the mark when it comes to education. Additionally credentials serve to lock people out of careers where they can thrive except for the rubber stamp of a piece of paper. In the words of Syndrome "if everyone is super, no one is". If every one has a BS/BA , masters, PHD then in a real sense no one really does. (Added after reading critical comments: "Nothing" is to strong of a word. With that said I still think most of education is about signaling/credentialism etc.)
- skybrian 9y ago
  This is overstated. Would you say that if everyone knows how to read, nobody does? There is a large amount of signalling in college. It's wildly inefficient. But it's not all signalling.
  - kermittd 9y ago
    I sure wouldn't but that's a good point. What I would say is the the ability to read is not much of a economic differenator unlike in many pre- modern cultures where the mere ability to read/write would put you at the top of the social hierarchy. (as a priest,scribe, etc) By the way I love to read!
    - gmfawcett 9y ago
      Are you really suggesting that illiteracy is not a barrier to success in the modern workforce? Anecdotally, how many of your successful colleagues are unable to read?
- RasputinsBro 9y ago
  > In the words of Syndrome "if everyone is super, no one is". If every one has a BS/BA , masters, PHD then in a real sense no one really does. This is a very small minded view of the world. If I have a PhD, and everyone else does too, it's like I don't have one? No! I learned many things during my PhD, and that knowledge doesn't disappear because others have more knowledge too. It seems the only thing you consider is jobs, but even there you're wrong. The job market is not zero sum. > Yet governments may actually be overestimating the economic benefits of higher education. While universities are places of learning, they are also social sorting mechanisms. Yes, so? The universities being a social sorting mechanism does not stop them from also being places of learning. This is American anti-intellectualism 101.
larrik 9y ago
"Part of the reason why university graduates earn more is because they are brighter and harder-working to begin with." Is that it, though? Or do they just get to reap the rolling snowball of opportunity from successful parents?
- sp332 9y ago
  It doesn't say that's "it". It says that's "part".
tonyedgecombe 9y ago
There was an interesting debate on this at LSE: https://www.youtube.com/watch?v=EmGL67coWwc https://www.youtube.com/watch?v=EmGL67coWwc There is clearly a problem but I'm not sure what the answer is.
nimbius 9y ago
As a machinist mechanic by trade, higher education needs some serious reform. The idea that youre going to spend four years of your life generating an insurmountable debt only to arrive without a job is bleak. Some of these degrees arent just useless, theyre outright goddamn predatory. The saddest moment in my career was realizing my boss makes a fraction of what I make after he pays his student loans. He still had to pay those loans when the recession hit and he was out of a job for 3 years. That kind of pressure with a wife and kids drives a man to crawl into a bottle.
bko 9y ago
Would you rather have a degree from Harvard with no education, or a harvard education with no degree? If you prefer the degree to the education than you likely value the signaling more than the human capital argument for education
- 77pt77 9y ago
  > If you prefer the degree to the education This could be seen quite blatantly in the first years of MOOC courses. People became really angry at the end because there was no real certification being given. It got really ugly.
  - lr4444lr 9y ago
    Source? (Not that I doubt you, I just want some entertaining reading.)
    - 77pt77 9y ago
      I'm specifically talking about the very first Electronics courses associated with MIT People became quite enraged in the forums because the "diploma" was not issued by MIT and also because at one point there was no grade in the diploma. Similar things happened in the Stanford associated courses, though not as ugly from my recollection.
  - robax 9y ago
    I'm trying to find a source to support your argument but I'm not having any luck. Coursera's original course offerings gave free certificates upon completion. My understanding is that MOOCs started charging for certifications in an effort to pay the bills. The jury is still out on whether these certifications are taken seriously or not.
    - 77pt77 9y ago
      They did give certificates, but a vocal minority was not happy that they were not Stanford/MIT,... issued certificates. It boils down to your last sentence: > The jury is still out on whether these certifications are taken seriously or not. Many people were taking those courses under the expectation that the certification would be highly prestigious and felt defrauded when that wasn't the case. The fact that they paid nothing only made matters worse because people feel more entitled when they pay nothing for a service.
dalbasal 9y ago
...For the same reason we are over/underestimating all sorts of things: Correlations don't mean causation. Even when they do, subsidizing the cause can break the causal link. Taking english classes and learning english might be causally related, but paying people to take english classes may not have a predictable result. The current disadvantage=discrimination debate has the same problem. So do many of the Scandi-inspired policy suggestions, assuming that policy X caused result Y, and will again.... If we apply this logic in other places we'd conclude that homosexuality increases salary. Evidence for these things is probabilistic, and we suck at statistics, especially when we're being political. Anyway, I found this interesting (by ommission): Part of the reason why university graduates earn more is because they are brighter and harder-working to begin with Not that they were wealthier to begin with? Not for class reasons? and... humanities graduates, ...tend to earn more if they come from more prestigious institutions suggests that one reason ... get ahead of peers in the job market. Get ahead how? Knowing people who are ahead? Being associated with people who are ahead? Talking like people who are ahead? They already conceded that it isn't the education.... Humanities (and educations generally), was the domain of the educated classes. Lower class people sent their kids there for class mobility reasons. It was a way for the more talented middle class kids to join the upper-middle classes, by joining them physically. Kids from those classes, went to college to strengthen the class association. In the UK, they were generally explicit about this. The economist knows this. Why beat around the bush. Higher class seeming people (yes, this still exists) do better in job markets. ..also in marriage markets, probably get loans easier...
kylecordes 9y ago
Education is in many ways a valuable preparation for future work, there are many important goals which can only be achieved (or can be achieved better) with lots of education. But... it is also a social signal, and therefore a positional good. To the extent there is social status in being among the top third of the education scale, there can never be more than third of all people in that category. The above seems ridiculously obvious... but is underappreciated in the analysis of many phenomena. (Another example: if you define poverty as the 15th percentile of some measure, by definition the poverty level will always be 15%. To figure out if there's real progress being made, on poverty or education or anything else, a scale must be found that is not positional, that is somehow an absolute measure.)
wolfspider 9y ago
And I may have overestimated the returns of learning how to paint like Bob Ross. No but seriously, reducing the value of labor to nothing is the cause here. Who could have predicted that being so jaded about workers that dedicate their lives to corporations would cause this to happen? So a typical citizen that works out all the time, is perpetually happy, frugal with finances, and only cares about work is a little too common nowadays (eerily so). This actually makes labor itself have no value if people will do it for free. None of these advantages work for people anymore because no one can stand out among anyone else.
millermp12 9y ago
modern higher education == cargo cult
chris_va 9y ago
Personally I think this article glosses over all of the important details and is fairly useless. This sort of casual assumption is infuriating: "Part of the reason why university graduates earn more is because they are brighter and harder-working to begin with." Whether or not college is only a sorting mechanism is unsupported by the article. If we restate the intention of higher education as "make everyone brighter and harder-working", then this whole article falls apart.
jdlyga 9y ago
College should be more about career training.
meuk 9y ago
Paywalled...
- tchen 9y ago
  https://outline.com/kJVEkY https://outline.com/kJVEkY
  - meuk 9y ago
    Thank you sir. Also, where did you find it? I'm getting downvoted, but I tried the first 20 results from the 'web link', I can't read the article on any of them. Why not just post a readable link?
rfugger 9y ago
TL;DR: Correlation does not imply causation.
- dang 9y ago
  Please don't do this here.
b0rsuk 9y ago
Higher education - okay, but quality education can't be overestimated. I live in Poland and education actually seems to be getting worse over time, while catholic church is consistently gaining ground. In primary + secondary schools, there's more religion than physics, biology or chemistry. Mathematics is the only science lesson still more common than religion. Technically there should be "ethics" lessons as an alternative, but very few schools actually employ such teachers, citing various excuses. Recently, there's a push by education minister to let priests become educators (form masters), taking orders from bishop rather than principal. Final exams from catholic religion are not far away. If you put tax money into religion rather than scientific grants, and you complain your country has very low innovation rating, really, what do you expect? Maybe you could export a new religion?
- dgregd 9y ago
  During communism in Poland there was 1 hour of religion classes per week. Classes were run in Catholic Church buildings. Now there are 2 hours of religion classes in school buildings. Pupils who do not want to go to religion classes can have a free time. Do you really think that changing for example 1 hour of religion lesson per week to 1 hour of chemistry would change a lot? I doubt whether the ethics lesson in your case would result in less religion intolerance. Someone who is that much ashamed of his own country should simply emigrate, as President Komorowski advised. PS. Polish Catholic Church also overestimated the impact of religion classes for practicing Catholics. Now less people attend Sunday masses.
forapurpose 9y ago
There's an assumption in the title (obviously) that appeals to a popular argument on HN, but the article itself is not conclusive: university graduates still make around 70% more than non-graduates suggests that demand for skilled workers still far exceeds supply. / Yet governments may actually be overestimating the economic benefits of higher education. The article says the economic returns could be overestimated do to the social benefits of college. I certainly agree about the social benefits, and I think we need college open to all: First, it's really about wealth and class; these economic arguments are a BS distraction to a significant degree (though not entirely). I know of schools in rich districts where 95% go to college, and in poor districts only miles away where it's maybe 5%. What does that have to do with economic and social benefits? Why should those social and economic benefits go to kids in rich districts? The expansion of college means expanding it to the poor district; I don't hear wealthy parents saying that their own kids shouldn't go, or that their district should send fewer to college; the argument against college is really an argument to not expand the same opportunities to the working class and poor. For social/political reasons (racism, maintaining political power) and self-interest (not paying taxes), there are even some who don't want the poor kids to get the opportunity; it's an nascent aristocracy protecting itself, which is incompatible with democracy (which is why people like Thiel are against democracy and education) - though certainly that doesn't apply to all critics and criticisms, we also shouldn't pretend it's not an issue. Second, in the land(s) of opportunity, why are we suddenly rationing it through central planning? Let people advance themselves and go to college if they want to; give them the chance to advance themselves by making college available to them, the best one they can get into. Who are you or I to tell them they shouldn't go because we don't think it's economically worthwhile?
rotrux 9y ago
I'm going to try and exemplify the "why" in a much shorter ammt of space using some arbitrary numbers - SCENARIO 1: - Year: 1965 - # of jobs requiring college degree: 75 - annual college graduates: 60 SCENARIO 2: - Year: 2018 - # of jobs requiring college degree: 150 - annual college graduates: 1,000 Aside from how horrifically wrong this^ is, the ratio problem remains.
djschnei 9y ago
1) the government wants more college grads (admirable) 2) the government makes it really easy to secure loans to go to college (short-sighted) 3) the market is oversaturated with demand AND buying power (because of the easy loans) 4) prices rise (duh) 5) now everyone is in crushing debt and a degree is far less valuable Very simplified; but why is anyone surprised?
- RickHull 9y ago
  Those surprised tend to measure success by intent rather than consequences.
  - djschnei 9y ago
    well said. Or if free college is their end, then these are the means. Complete collapse.
alexashka 9y ago
I don't see anything in the article to indicate that governments (multiple) have overestimated anything. Which governments? What were their estimates exactly? This article just throws some factoids together to form paragraphs - not making any coherent points in the process. The article concludes with this: Governments are right to fret about training future workers Who is fretting? What does that even mean? This sloppy journalism merely plays the good old tune of 'government isn't doing the right thing' (a form of 'someone else is at fault'). It'd do more good to look in the mirror and ask if you're doing a good job and start from there. Don't worry about governments, start with yourself. In the case of journalism, start with doing some research, coming up with a stance, having arguments from multiple sides and then presenting them in a compelling manner.
ZenoArrow 9y ago
I wouldn't say the issue is that governments have overestimated the economic returns of higher education, I would say the issue is that companies have collectively underestimated the value of apprenticeships. If the strongest possible economy is the one where the highest proportion of citizens are making the most of their individual talents, apprenticeships seem like a better fit than university for many professions, as they let the apprentices learn a trade directly, which either results in them finding a job they're good at or in finding out early that it isn't the path for them. Studying at a university has other benefits outside the job market, and I would still want anyone who wanted to go to have the opportunity to do so (by making it more affordable), but if the only reason that some people (not all) are going to university is to land a decently paid job, then let's just cut out the middle man and let people learn whilst they work. This has benefits for companies too, as they get a larger pool of potential employees to work with, which ultimately keeps wages lower in the long run, and I'd also suggest that apprentice schemes help build loyalty, which should result in reduced disruption to business operations (compared to companies that struggle to retain their staff).
danbruc 9y ago
Well, economic returns have to originate from somewhere. Either your additional education allows you to take something away from someone else our it allows you to increase productivity and reap its benefits. Also if you spend five additional years at university out of say fifty working years, then you already have to increase productivity by ten percent only to match your economic output without spending this additional five years studying. And in highly competitive markets, that are already optimized to death, ten percent is a lot and even then you just broke even.
DubiousPusher 9y ago
I think I'm seeing some confusion on this thread about the term "specialist". Basically, if you're anything other than a subsistence farmer, aren't you some kind of specialist? Teachers, doctors, grocers, car salesman, lawyers, bankers, mechanics, all these professions are limited in scope not just to one economic area but to a small portion of that economic area. It's not college that makes you a specialist. It's modern economies that demand you specialize. Even if that specialty isn't considered "professional".
- closeparen 9y ago
  You just listed a bunch of upper middle class occupations. Try food service, retail, general construction, factory, or warehouse labor, driving, etc. These are positions that, when they’re hiring at all, will hire any able-bodied person known to be reliable and follow directions. In your city there is probably somewhere day laborers hang out and contractors come by in their pickups to hire anonymous strangers for a day’s work in cash under the table with no collecting or reviewing of resumes. That’s what we mean by not specialized. The trades (electrical, plumbing, automotive, etc) are good examples of specialized but not college-educated positions.
- cortesoft 9y ago
  I feel like people are meaning, 'Does the job require special training that you need to get prior to starting your career in the field' Some jobs do (Doctor, Lawyer, Teacher, etc), while other specialized careers you get all the training once you join the career (car salesman, grocers, etc). Yes they are both specialized, but they are different.
Clanan 9y ago
> Estimates of the economic returns to higher education tend to assume that all students will graduate. In practice, around 30% of students in Europe and 40% of students in America will drop out before earning their degrees. This leads to a dangerous debt situation. I saw this up close in New Mexico. The state gave everyone a "bridge" scholarship which covered the first semester of college. Students who had no business going to college would go anyway and get a loan to cover the second semester. They would fail out and be stuck with a nasty loan for no good reason.
juanmirocks 9y ago
My story. I've even done a PhD myself. I'd barely recommend doing a degree anymore to most people. The pace of change is huge and universities are barely keeping up. The most needed is practical skills, which you can take on the go and use online learning courses.
ericmcer 9y ago
We are in a capitalist system that optimizes around financial gain. Our educational system has traditionally not had the same goals. Its not hugely surprising that it is not the best vehicle for creating perfect financial goal achieving cogs. Apprenticeships, Bootcamps, online training, etc. are way better for a vocation oriented education. You lose the well rounded, empathic, and critical thinking gains that a traditional college education rewards, but we don't seem to really care about those qualities anymore anyway.
- snambi 9y ago
  Instead of calling it education, the term brain washing is more appropriate. :))
forkandwait 9y ago
I have to wonder if there is some PR agency funded by nefarious oligarchs pushing the "education is a waste of time" bullshit in order to make sure we have enough semi-literate, alcohol and tv addicted people to work in warehouses and production lines and fast food. Because, really, it is a crock of shit. Sure, one can list unsuccessful people who went to college, or successful people who didn't, and your friend's cousin that you heard of who got an art history degree and too much college debt and now works on a fishing vessel in Alaska, but really, the overall assocation is completely clear. While it is true that correlation does not "prove" causality, it does go a long way to supporting causality in this case. Here is the worst case: You drag yourself through a communications degree at Ryegrass State, with a B- average, and no technical training. This degree basically guarantees you an entry level job in a government bureacracy making 35,000 a year, with the chance to promote to 100,000 once you figure out smoking pot and playing video games really is a waste of time like your uptight uncle always said; you probably even like your job about 20 hours a week, and it isn't going to wreck your body by the time you are 45, and you might actually run a department someday. And you have a pension when you retire at 65. Here is a very accessible, good case: You come from a poor ass family, Dad makes 40,000 at the part store, but you study your ass off and get into a really good but not world class state university (UC Davis ... forgive me Aggies ...) and you get a computer science degree. You come out of school making 80K, probably promote to 200K over the next 10 years, have an exciting career making piles of money, with enough left over to help your siblings who listened to the "education doesn't matter" drivel they heard on HN. You probably go to city college for your first two years, live at home for your next two, take out loans for tuition and books and leave with $30,000 of debt; pay that off in a few years of coding, et voila.
- HillaryBriss 9y ago
  > You drag yourself through a communications degree at Ryegrass State, with a B- average, and no technical training. This degree basically guarantees you an entry level job in a government bureacracy making 35,000 a year ... wait. it does? is that really true?
  - solatic 9y ago
HillaryBriss 9y ago
Requisite link to Professor Bryan Caplan's case against high spending on education in the current system: "The key issue ... isn’t whether college pays, but why. The simple, popular answer is that schools teach students useful job skills. But this dodges puzzling questions." More here: https://www.theatlantic.com/magazine/archive/2018/01/whats-college-good-for/546590/ https://www.theatlantic.com/magazine/archive/2018/01/whats-c...
mhneu 9y ago
Higher education in the US has been seen as a way to improve one's lot in life - to climb the class ladder. That's still true. But there was a window in the 1970s-1990s in the US where it was MUCH easier to use college and hard work to advance. Tuition was lower and it was easier for poor and middle class kids to get in. Today, tuition has skyrocketed and the middle class is completely filled with kids who hire college consultants and train for standardized tests. Kids outside that elite sphere are at a big disadvantage. That wasn't true in the 70s and 80s, but eventually the upper and upper-middle class figured out how to take advantage of college opportunities and crowded out the working and middle classes.
- pm90 9y ago
  That's not strictly true. Colleges are getting more applications than every before and are many of the best ones have tuition assistance programs for those who can't afford tuition. However, its true that the awareness of these kinds of opportunities is spotty among the poorer sections of American society.
  - notfromhere 9y ago
    it doesn't matter if there's tuition assistance. Growing up poor you're at a profound structural disadvantage to even get into those schools.
antisthenes 9y ago
And significantly underestimated the returns of accumulated and concentrated capital.
derivt 9y ago
Higher education is not overestimated if it gives you better opportunities for the future. Perhaps some kind of higher education provides little economic value. I think that from a personal point of view, what you get from higher education depends a lot of what you put into the table, if you are a hard working intelligent guy and you have the ability to focus in what you are really good at, investing in higher education will give you a good ROI.
triviatise 9y ago
I graduated in 1992 and my state school (UIUC) cost around 4K year + 10K housing, easily worth it. Today it is 30,000. Still probably a pretty good deal. Over 25 years, the cost probably rose by about the same as inflation. For schools that cost 100K+/year, parents would be better off taking the 400K and investing in the S&P 500 over those 4 years. Because of compounding, their child would never need to save a penny to have an outstanding retirement. If the money doubles around every 8 years (9% ish) and they retire in about 48 years, they get 6 doubles, so their 400K is worth approximately 25 million (in non inflation adjusted dollars)
- TheCoelacanth 9y ago
  100K/year schools aren't for education. They are for class signalling. Someone who graduates from the school is either a member of a certain class or part of a select group that the school deemed worthy of associating with that class.
socratewasright 9y ago
One way to approach this could be to allow community colleges to give 3y or 4y degrees for certain majors. It could significantly reduce tuition costs.
analog31 9y ago
In my view, it has become extremely popular to believe that higher education is a waste of money and time -- famous people like Peter Thiel are promoting the idea, and there are of course supporting "studies" like there are for all popular ideas. But there is a caveat that I see: If it is true that not all people benefit from college, likewise, not all people benefit from not going to college. I'm thinking of myself here. I would have been a terrible bricklayer. For one thing, I'm not a physically strong person, though laying bricks might have rectified that situation. I also don't know if I would have been able to live with the nature of the job for 45 years, including its physical effects. I might have been a terrible computer programmer. I learned programming in high school, at a time when it didn't require a college degree. But would I really have enjoyed being a programmer for 45 years? And so forth.
- th3byrdm4n 9y ago
  The most important aspect of education is learning how to think. Whatever the vocation.
golemiprague 9y ago
The feminisation of the educational system has a lot to do with it. Females are more about credentialism than actual seeking of knowledge and applying it. Once they clogged the education system, from being the teachers in schools to filling up the universities, the whole system titled towards the female paradigm which is just having the credential in something matters more than actual knowledge or any pursue of application of the knowledge in the real world. There will never be a woman Bill Gates or Mark Zuckerberg, you will never see a youtube video saying "look what I have done in my garage" and find out a woman in it, because women are about credentials, not about seeking and applying knowledge. We should reduce the amount of women in universities to 20% and that's should solve most of the problem.
rexgallorum2 9y ago
Education is a sacred cow for cultural reasons and probably a gigantic waste of resources on the whole. I think it would help to step back (rather like an anthropologist) and ask fundamental questions regarding the social, cultural, and economic functions of education in a given society or economy (or globally) and go from there. Regarding practical, real world questions on the value of a college education, I can only say this: as much as I dislike German-style educational tracking, the so-called 'dual system' in Germany does produce interesting results, and provided the right conditions, something like it could be put into practice elsewhere. At the very least it provides workers with the necessary technical skills to do their jobs while shielding them somewhat from competition from outsiders (this protectionist function should in theory help buoy up wages and add job security, though collective agreements and general employment law contribute to both) without without sending them to college. One can and should of course debate the merits of general education and its putative political, social, and cultural benefits, but if we are talking about the bare-bones technical skills and practical experience needed to do a job, a parallel apprenticeship and vocational training system as exists in Germany is a viable alternative to university. I could say a lot more, but I will leave it at that for now.

244 points by denzil_correa 9y ago

Obvious reasons: locking young people in universities in their highest testosterone years reduces crime and drug addiction. Especially among people who don't get to have much returns from that education.

deleted 9y ago
[deleted]
bognition 9y ago
There's actually pretty solid evidence that its over educated men without job prospects that are a major force in driving people Jihad: http://news.mit.edu/2017/why-some-muslim-clerics-become-jihadists-1109 http://news.mit.edu/2017/why-some-muslim-clerics-become-jiha...
- gowld 9y ago
  That article is strangely over-focused. Students and intellectuals have long been revolutionaries across many cultures and centuries.
have_faith 9y ago
> reduces crime and drug addiction General crime maybe...drugs not so much.
ztoben 9y ago
Universities are a hotbed for binge drinking and drug use. So I'm not sure I buy into that.
- eeZah7Ux 9y ago
  Not in every country. Please do not generalize.
- lambda_lover 9y ago
  I don't think college campuses have a reputation for violent crime, though. I think the point is that maybe the students are ruining their own lives through drug abuse, but they aren't robbing/killing/maiming others. Considering how safe I'd feel on a college campus at 2am on a Friday night compared to a rundown section of town, I'm tempted to believe that college does keep kids away from the worst of violent crime. I can't find any studies on the subject, unfortunately.
leetcrew 9y ago
> Obvious reasons: locking young people in universities in their highest testosterone years reduces crime and drug addiction this could very well be true, but it hardly seems obvious. i could readily believe that fewer serious crimes occur at universities, but it seems like the combination of a large, low-friction network and a general blunting of consequences would lead to more drug use at least, and the ability to avoid or defer direct consequences does tend to exacerbate addictions and increase their harm over time.
DanAndersen 9y ago
I wish you weren't downvoted, as there is a core insight in it. Back when universities were a thing that young aristocratic elite men attended, part of the implicit function was to get potentially troublemaking young men isolated from a lot of greater society while they worked out some of that energy and matured. But I think the modern equivalent is closer to high school, because we have a society that places inherent value on universal grade school education, and thus mandates attendance (anti-truancy, etc). One unfortunate effect is that for some, school ends up feeling like a prison or holding pen just to keep some young people off the street and out of trouble.

gesman 9y ago

Little to do with economic returns. Unrevokable student debt is one of the biggest government assets.

philipov 9y ago
Only for a sufficiently restricted definition of asset. You're thinking of the article that was referring to financial securities. Student debt may be leading in that category, but the government doesn't own much in the way of financial securities compared to land and military assets.
- gesman 9y ago
  “ Over the last decade or so, there’s been an absolute explosion in student loans, growing from $260 billion in 2004 to $1.31 trillion last year. So, the total value of student loans in America today is LARGER than the total value of subprime loans at the peak of the financial bubble. And just like the subprime mortgages, many student loans are in default. According to the Fed’s most recent Household Debt and Credit Report, the student loan default rate is 11.2%, almost the same as the peak mortgage default rate in 2010. This is particularly interesting because student loans essentially have no collateral. Lenders make loans to students… but it’s not like the students have to pony up their iPhones as security. That’s what made the subprime debacle so dangerous. Millions of homes were underwater, so when borrowers didn’t pay, lenders didn’t have sufficient collateral to cover their loan exposure. With student loans, there is no collateral. Lenders have no security to recoup their loans. So when students don’t pay, someone is going to take a hit. That ‘someone’ will likely be you. That’s because hundreds of billions of dollars of these student loans are either owned or guaranteed by the United States government. So as borrowers stop making payments, it’s the taxpayer who will suffer yet another massive loss. Let’s be honest, though, there’s something seriously screwed up with this system. Young people are pushed into this system by a society that places an irrationally high value on university degrees. Kids are told for their entire lives that if they study hard to get into a good school, there will be a great career waiting for them. For many young people this turned out to be a total lie. In fact, Federal Reserve data once again show that, for at least 25% of college graduates, salaries are no higher than for people with just a high school diploma. Racking up so much debt hardly seems worth it. It seems bizarre to begin with that an 18-year old will know what s/he wants to do in life, to the point that they should take on $50,000 in debt for a piece of paper that might not even make them marketable. What did any of us really know at age 18? And how many of us could have accurately predicted our life’s path? Very few. And yet there’s an absurd amount of pressure to force young people into this system that heaps debt upon them. “ — Simon Black

TallGuyShort 9y ago

While I agree the the economic impact of government-assisted education is often overstated (or at least misunderstood) and that a degree and an education is not a 1:1 mapping in either direction, education for education's sake is a perfectly worthwhile goal, IMO. That often seems to get forgotten in these discussions.

theseatoms 9y ago
Yeah. Just recognize it as "consumption" rather than "investment" in economic terms. People usually conflate the two with regard to home-ownership as well.
- Symmetry 9y ago
  Even if education were entirely a matter of signalling (which obviously isn't true) then it would still be a perfectly good personal investment in that it would get you a better job than you would have otherwise. It would just be social subsidies of it that would be consumption rather than investment.
- triplesec 9y ago
  I must strongly dissent. The investment in education-not-training often benefits society in other ways, which turn out to be indirectly economically beneficial, and directly and indirectly socially constructive; these lead in most cases on average to a greater happiness and complexity and learning in such a society, in a positive feedback loop. So no, I think the dismal bottom-line assumptions of your economics are sorely lacking.
DanAndersen 9y ago
Absolutely, but education for education's sake can easily be provided for cheap or free via MOOCs, continuing education, The Great Courses, or just picking up old books and reading them.
- TallGuyShort 9y ago
  I agree wholeheartedly - despite how my comment sounds I have very negative feelings on the university system in the U.S. and how overused it is. My father was actually invited by a local youth group to address the kids on the importance of education a few years ago, because they thought he was very well educated. He showed up and informed them that he had dropped out of his third-world country high school and never regretted it, and then he showed the kids a bunch of books on random areas he had enjoyed and told them stories of how he applied that knowledge to various jobs to solve problems, help people, and advance his career. Stuck with me.

bhauer 9y ago

In a surprising demonstration of not burying the lede, it's given away by the subheading: "Earning a degree is about signalling, and not just learning."

danans 9y ago
> "Earning a degree is about signalling, and not just learning" This is nothing new. It was this way since the beginning of higher education in religious institutions. Higher education was a social signal that gave clerics power over many aspects of society in their roles as religious leaders and advisers to rulers. In Europe it was common for non first-born sons of aristocrats to go into the clergy via the academic route. They didn't do this to give up power, but to associate themselves and their families with powerful religious/academic cultural institutions. Even during the post WW2 broadening of higher education access, it served as a bridge to upper social classes. You can't get rid of the class signalling aspect unless you can get rid of class as a cultural phenomenon, which is unlikely. Being broadly educated will always be a signal of class, no matter how it is achieved, simply because it implies that you had the resources to study things that are not of immediate vocational value. But many aspects of higher education that don't have vocational value have a lot of value in creating an informed, adaptable citizenry. You can, however, reduce the degree to which higher class association via higher education is needed in order to learn skills needed to achieve a decent livelihood. One way to achieve this is to reverse the trend of large cuts to public higher education funding, which is the largest factor in the increased costs of those institutions [1] (not fancy buildings). [1] https://fivethirtyeight.com/features/fancy-dorms-arent-the-main-reason-tuition-is-skyrocketing/ https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...

scottlocklin 9y ago

"since 1970 the share of workers with degrees has increased in virtually every occupation. But in around half of occupations with better-educated workers average wages have still fallen in real terms. " -I love it when "the economist" forgets how "supply and demand" work. Real talk: it's easier to govern a nation of debt serfs who have to take out loans to take a glorified IQ test.

kbutler 9y ago

Because most people do? Because it's a sacred cow that you cannot criticize? Because most of the elites have elite university credentials (almost by definition)? e.g., see Peter Thiel's criticisms https://techcrunch.com/2011/04/10/peter-thiel-were-in-a-bubble-and-its-not-the-internet-its-higher-education/ https://techcrunch.com/2011/04/10/peter-thiel-were-in-a-bubb...

gt_ 9y ago
One of his regular points that is hardly controversial as far as I can tell. It seems solid to me. I think your summary gets at a key aspect of it too.
watwut 9y ago
Huh? For something you can not criticize, I see a lot of criticsm. Both now and in the past.
forapurpose 9y ago
> it's a sacred cow that you cannot criticize That is hardly the case; it's trendier to criticize than to defend. > Thiel Thiel has many crazy ideas, some of which lack the sophistication of an undergraduate paper. Money doesn't make you smart, but perhaps college would have helped him. (EDIT: Apparently he did go to college and graduate school; my point was mostly snark, but some education in many issues saves people from thinking they are too clever.) It's no surprise that someone who openly wants to disempower the public and eliminate democracy would be against the public becoming educated and empowered.
- war1025 9y ago
  > Money doesn't make you smart, but perhaps college would have helped him. It says in the article that he went to Stanford and Stanford Law.
- kbutler 9y ago
  It's trendy to criticize the monetary cost of higher education, but it's perceived as a near-necessity, with counter-examples being considered noteworthy ("Bill Gates and Steve Jobs dropped out of college!")

sremani 9y ago

The relationship between Education and Prosperity is funny one. Argentina and Egypt are good examples of societies that got educated but did not see economic returns. (source: nntaleb). A prosperous country gets more educated but an educated country may not always prosper.

conanbatt 9y ago
ARgentina's public education is disastrous at all levels. While we have a public university that is free, mostly middle class goes there. Upper class goes private, and lower class does not graduate highschool. Our high-school graduation rate is 50%. And our public college graduation rate is about 50% as well.
crdoconnor 9y ago
Also Russia. Poor countries with excellent education systems usually end up with brain drain - their education budget subsidizing the richer countries their smartest citizens inevitably flee to.

kodis 9y ago

I suspect that at least some of this is due to confusing cause with effect: people see that most highly successful people have a collage degree, and wrongly conclude that anyone with a collage degree will be highly successful. A few of the other problems with this increased drive to send people to collage is that now a collage degree is required -- as the article points out -- as a signal of employability even for jobs where a high school education would suffice; a drive away from trade school, even when a job in the trades pays well and is quite secure; and of course the debt load that comes with collage, even for a degree is in a field with little chance of providing a good return on the cost of the degree.

collageking 9y ago
i too have a degree in collaging. my friends call me Scrapbook King.
kgwgk 9y ago
> Collage (from the French: coller, "to glue";[1] French pronunciation: [kɔ.laʒ]) is a technique of an art production, primarily used in the visual arts, where the artwork is made from an assemblage of different forms, thus creating a new whole. :-)
- tpurves 9y ago
  To be fair, studying collage did famously turn out pretty well, and economically too, for some young people like Picasso and Braque :) http://www.ideelart.com/module/csblog/post/159-1-cubist-collage.html http://www.ideelart.com/module/csblog/post/159-1-cubist-coll...
- cirgue 9y ago
  Collage is good, but I hear that if you really want to join the economic elite, you have to get into decoupage.
  - jxub 9y ago
    Fitting into that decoupage Was a torturing massage To the pain camouflage I gobbled a hefty sausage That prospect was still better envisage Than college, lectures about collage

Parcissons 9y ago

I think one of the most underestimated economic returns is the paranoid spending of a military complex. Those guys go nuts in a way a market simply cant- computer chips, the internet, jet-planes, rockets- to be honest, i wish the us-military and china would duke it out in this space, obviously without nuclear weapons- out there in space. The sovjets have nuclear missiles in europa- we need missiles on Io to counter this, or our magnetic harvest rights might become conested, mr.president. The longer i live, the more the whole of the western economic machinery, seems just like a waste product consumer of the military industrial complex. Yes, the actual wars are pretty useless and horrific- but those guys would get fusion done, if they believed the enemy was allmost theire. None of this 50 year waiting bollocks. If you are honest, Musk basically only gets us back where the US was in the early 70s.

lamename 9y ago

> But in around half of occupations with better-educated workers average wages have still fallen in real terms. Did I miss something? "Half" is not a substantial argument without more detail. What about the other half? Stagnant? Rising a little? Rising dramatically? Which types of jobs fall into each bucket? Not against the signalling argument per se, I'm just missing information.

kermittd 9y ago

This was mentioned in another comment but nothing about "education" is about actual education. It's primarily about credentialisim and not being locked out of a career with a high ceiling. Though I disagree with many of his political opinions Peter Thiel I think is right on the mark when it comes to education. Additionally credentials serve to lock people out of careers where they can thrive except for the rubber stamp of a piece of paper. In the words of Syndrome "if everyone is super, no one is". If every one has a BS/BA , masters, PHD then in a real sense no one really does. (Added after reading critical comments: "Nothing" is to strong of a word. With that said I still think most of education is about signaling/credentialism etc.)

skybrian 9y ago
This is overstated. Would you say that if everyone knows how to read, nobody does? There is a large amount of signalling in college. It's wildly inefficient. But it's not all signalling.
- kermittd 9y ago
  I sure wouldn't but that's a good point. What I would say is the the ability to read is not much of a economic differenator unlike in many pre- modern cultures where the mere ability to read/write would put you at the top of the social hierarchy. (as a priest,scribe, etc) By the way I love to read!
  - gmfawcett 9y ago
    Are you really suggesting that illiteracy is not a barrier to success in the modern workforce? Anecdotally, how many of your successful colleagues are unable to read?
RasputinsBro 9y ago
> In the words of Syndrome "if everyone is super, no one is". If every one has a BS/BA , masters, PHD then in a real sense no one really does. This is a very small minded view of the world. If I have a PhD, and everyone else does too, it's like I don't have one? No! I learned many things during my PhD, and that knowledge doesn't disappear because others have more knowledge too. It seems the only thing you consider is jobs, but even there you're wrong. The job market is not zero sum. > Yet governments may actually be overestimating the economic benefits of higher education. While universities are places of learning, they are also social sorting mechanisms. Yes, so? The universities being a social sorting mechanism does not stop them from also being places of learning. This is American anti-intellectualism 101.

larrik 9y ago

"Part of the reason why university graduates earn more is because they are brighter and harder-working to begin with." Is that it, though? Or do they just get to reap the rolling snowball of opportunity from successful parents?

sp332 9y ago
It doesn't say that's "it". It says that's "part".

tonyedgecombe 9y ago

There was an interesting debate on this at LSE: https://www.youtube.com/watch?v=EmGL67coWwc https://www.youtube.com/watch?v=EmGL67coWwc There is clearly a problem but I'm not sure what the answer is.

nimbius 9y ago

As a machinist mechanic by trade, higher education needs some serious reform. The idea that youre going to spend four years of your life generating an insurmountable debt only to arrive without a job is bleak. Some of these degrees arent just useless, theyre outright goddamn predatory. The saddest moment in my career was realizing my boss makes a fraction of what I make after he pays his student loans. He still had to pay those loans when the recession hit and he was out of a job for 3 years. That kind of pressure with a wife and kids drives a man to crawl into a bottle.

bko 9y ago

Would you rather have a degree from Harvard with no education, or a harvard education with no degree? If you prefer the degree to the education than you likely value the signaling more than the human capital argument for education

77pt77 9y ago
> If you prefer the degree to the education This could be seen quite blatantly in the first years of MOOC courses. People became really angry at the end because there was no real certification being given. It got really ugly.
- lr4444lr 9y ago
  Source? (Not that I doubt you, I just want some entertaining reading.)
  - 77pt77 9y ago
    I'm specifically talking about the very first Electronics courses associated with MIT People became quite enraged in the forums because the "diploma" was not issued by MIT and also because at one point there was no grade in the diploma. Similar things happened in the Stanford associated courses, though not as ugly from my recollection.
- robax 9y ago
  I'm trying to find a source to support your argument but I'm not having any luck. Coursera's original course offerings gave free certificates upon completion. My understanding is that MOOCs started charging for certifications in an effort to pay the bills. The jury is still out on whether these certifications are taken seriously or not.
  - 77pt77 9y ago
    They did give certificates, but a vocal minority was not happy that they were not Stanford/MIT,... issued certificates. It boils down to your last sentence: > The jury is still out on whether these certifications are taken seriously or not. Many people were taking those courses under the expectation that the certification would be highly prestigious and felt defrauded when that wasn't the case. The fact that they paid nothing only made matters worse because people feel more entitled when they pay nothing for a service.

dalbasal 9y ago

...For the same reason we are over/underestimating all sorts of things: Correlations don't mean causation. Even when they do, subsidizing the cause can break the causal link. Taking english classes and learning english might be causally related, but paying people to take english classes may not have a predictable result. The current disadvantage=discrimination debate has the same problem. So do many of the Scandi-inspired policy suggestions, assuming that policy X caused result Y, and will again.... If we apply this logic in other places we'd conclude that homosexuality increases salary. Evidence for these things is probabilistic, and we suck at statistics, especially when we're being political. Anyway, I found this interesting (by ommission): Part of the reason why university graduates earn more is because they are brighter and harder-working to begin with Not that they were wealthier to begin with? Not for class reasons? and... humanities graduates, ...tend to earn more if they come from more prestigious institutions suggests that one reason ... get ahead of peers in the job market. Get ahead how? Knowing people who are ahead? Being associated with people who are ahead? Talking like people who are ahead? They already conceded that it isn't the education.... Humanities (and educations generally), was the domain of the educated classes. Lower class people sent their kids there for class mobility reasons. It was a way for the more talented middle class kids to join the upper-middle classes, by joining them physically. Kids from those classes, went to college to strengthen the class association. In the UK, they were generally explicit about this. The economist knows this. Why beat around the bush. Higher class seeming people (yes, this still exists) do better in job markets. ..also in marriage markets, probably get loans easier...

kylecordes 9y ago

Education is in many ways a valuable preparation for future work, there are many important goals which can only be achieved (or can be achieved better) with lots of education. But... it is also a social signal, and therefore a positional good. To the extent there is social status in being among the top third of the education scale, there can never be more than third of all people in that category. The above seems ridiculously obvious... but is underappreciated in the analysis of many phenomena. (Another example: if you define poverty as the 15th percentile of some measure, by definition the poverty level will always be 15%. To figure out if there's real progress being made, on poverty or education or anything else, a scale must be found that is not positional, that is somehow an absolute measure.)

wolfspider 9y ago

And I may have overestimated the returns of learning how to paint like Bob Ross. No but seriously, reducing the value of labor to nothing is the cause here. Who could have predicted that being so jaded about workers that dedicate their lives to corporations would cause this to happen? So a typical citizen that works out all the time, is perpetually happy, frugal with finances, and only cares about work is a little too common nowadays (eerily so). This actually makes labor itself have no value if people will do it for free. None of these advantages work for people anymore because no one can stand out among anyone else.

millermp12 9y ago

modern higher education == cargo cult

chris_va 9y ago

Personally I think this article glosses over all of the important details and is fairly useless. This sort of casual assumption is infuriating: "Part of the reason why university graduates earn more is because they are brighter and harder-working to begin with." Whether or not college is only a sorting mechanism is unsupported by the article. If we restate the intention of higher education as "make everyone brighter and harder-working", then this whole article falls apart.

jdlyga 9y ago

College should be more about career training.

meuk 9y ago

Paywalled...

tchen 9y ago
https://outline.com/kJVEkY https://outline.com/kJVEkY
- meuk 9y ago
  Thank you sir. Also, where did you find it? I'm getting downvoted, but I tried the first 20 results from the 'web link', I can't read the article on any of them. Why not just post a readable link?

rfugger 9y ago

TL;DR: Correlation does not imply causation.

dang 9y ago
Please don't do this here.

b0rsuk 9y ago

Higher education - okay, but quality education can't be overestimated. I live in Poland and education actually seems to be getting worse over time, while catholic church is consistently gaining ground. In primary + secondary schools, there's more religion than physics, biology or chemistry. Mathematics is the only science lesson still more common than religion. Technically there should be "ethics" lessons as an alternative, but very few schools actually employ such teachers, citing various excuses. Recently, there's a push by education minister to let priests become educators (form masters), taking orders from bishop rather than principal. Final exams from catholic religion are not far away. If you put tax money into religion rather than scientific grants, and you complain your country has very low innovation rating, really, what do you expect? Maybe you could export a new religion?

dgregd 9y ago
During communism in Poland there was 1 hour of religion classes per week. Classes were run in Catholic Church buildings. Now there are 2 hours of religion classes in school buildings. Pupils who do not want to go to religion classes can have a free time. Do you really think that changing for example 1 hour of religion lesson per week to 1 hour of chemistry would change a lot? I doubt whether the ethics lesson in your case would result in less religion intolerance. Someone who is that much ashamed of his own country should simply emigrate, as President Komorowski advised. PS. Polish Catholic Church also overestimated the impact of religion classes for practicing Catholics. Now less people attend Sunday masses.

forapurpose 9y ago

There's an assumption in the title (obviously) that appeals to a popular argument on HN, but the article itself is not conclusive: university graduates still make around 70% more than non-graduates suggests that demand for skilled workers still far exceeds supply. / Yet governments may actually be overestimating the economic benefits of higher education. The article says the economic returns could be overestimated do to the social benefits of college. I certainly agree about the social benefits, and I think we need college open to all: First, it's really about wealth and class; these economic arguments are a BS distraction to a significant degree (though not entirely). I know of schools in rich districts where 95% go to college, and in poor districts only miles away where it's maybe 5%. What does that have to do with economic and social benefits? Why should those social and economic benefits go to kids in rich districts? The expansion of college means expanding it to the poor district; I don't hear wealthy parents saying that their own kids shouldn't go, or that their district should send fewer to college; the argument against college is really an argument to not expand the same opportunities to the working class and poor. For social/political reasons (racism, maintaining political power) and self-interest (not paying taxes), there are even some who don't want the poor kids to get the opportunity; it's an nascent aristocracy protecting itself, which is incompatible with democracy (which is why people like Thiel are against democracy and education) - though certainly that doesn't apply to all critics and criticisms, we also shouldn't pretend it's not an issue. Second, in the land(s) of opportunity, why are we suddenly rationing it through central planning? Let people advance themselves and go to college if they want to; give them the chance to advance themselves by making college available to them, the best one they can get into. Who are you or I to tell them they shouldn't go because we don't think it's economically worthwhile?

rotrux 9y ago

I'm going to try and exemplify the "why" in a much shorter ammt of space using some arbitrary numbers - SCENARIO 1: - Year: 1965 - # of jobs requiring college degree: 75 - annual college graduates: 60 SCENARIO 2: - Year: 2018 - # of jobs requiring college degree: 150 - annual college graduates: 1,000 Aside from how horrifically wrong this^ is, the ratio problem remains.

djschnei 9y ago

1) the government wants more college grads (admirable) 2) the government makes it really easy to secure loans to go to college (short-sighted) 3) the market is oversaturated with demand AND buying power (because of the easy loans) 4) prices rise (duh) 5) now everyone is in crushing debt and a degree is far less valuable Very simplified; but why is anyone surprised?

RickHull 9y ago
Those surprised tend to measure success by intent rather than consequences.
- djschnei 9y ago
  well said. Or if free college is their end, then these are the means. Complete collapse.

alexashka 9y ago

I don't see anything in the article to indicate that governments (multiple) have overestimated anything. Which governments? What were their estimates exactly? This article just throws some factoids together to form paragraphs - not making any coherent points in the process. The article concludes with this: Governments are right to fret about training future workers Who is fretting? What does that even mean? This sloppy journalism merely plays the good old tune of 'government isn't doing the right thing' (a form of 'someone else is at fault'). It'd do more good to look in the mirror and ask if you're doing a good job and start from there. Don't worry about governments, start with yourself. In the case of journalism, start with doing some research, coming up with a stance, having arguments from multiple sides and then presenting them in a compelling manner.

ZenoArrow 9y ago

I wouldn't say the issue is that governments have overestimated the economic returns of higher education, I would say the issue is that companies have collectively underestimated the value of apprenticeships. If the strongest possible economy is the one where the highest proportion of citizens are making the most of their individual talents, apprenticeships seem like a better fit than university for many professions, as they let the apprentices learn a trade directly, which either results in them finding a job they're good at or in finding out early that it isn't the path for them. Studying at a university has other benefits outside the job market, and I would still want anyone who wanted to go to have the opportunity to do so (by making it more affordable), but if the only reason that some people (not all) are going to university is to land a decently paid job, then let's just cut out the middle man and let people learn whilst they work. This has benefits for companies too, as they get a larger pool of potential employees to work with, which ultimately keeps wages lower in the long run, and I'd also suggest that apprentice schemes help build loyalty, which should result in reduced disruption to business operations (compared to companies that struggle to retain their staff).

danbruc 9y ago

Well, economic returns have to originate from somewhere. Either your additional education allows you to take something away from someone else our it allows you to increase productivity and reap its benefits. Also if you spend five additional years at university out of say fifty working years, then you already have to increase productivity by ten percent only to match your economic output without spending this additional five years studying. And in highly competitive markets, that are already optimized to death, ten percent is a lot and even then you just broke even.

DubiousPusher 9y ago

I think I'm seeing some confusion on this thread about the term "specialist". Basically, if you're anything other than a subsistence farmer, aren't you some kind of specialist? Teachers, doctors, grocers, car salesman, lawyers, bankers, mechanics, all these professions are limited in scope not just to one economic area but to a small portion of that economic area. It's not college that makes you a specialist. It's modern economies that demand you specialize. Even if that specialty isn't considered "professional".

closeparen 9y ago
You just listed a bunch of upper middle class occupations. Try food service, retail, general construction, factory, or warehouse labor, driving, etc. These are positions that, when they’re hiring at all, will hire any able-bodied person known to be reliable and follow directions. In your city there is probably somewhere day laborers hang out and contractors come by in their pickups to hire anonymous strangers for a day’s work in cash under the table with no collecting or reviewing of resumes. That’s what we mean by not specialized. The trades (electrical, plumbing, automotive, etc) are good examples of specialized but not college-educated positions.
cortesoft 9y ago
I feel like people are meaning, 'Does the job require special training that you need to get prior to starting your career in the field' Some jobs do (Doctor, Lawyer, Teacher, etc), while other specialized careers you get all the training once you join the career (car salesman, grocers, etc). Yes they are both specialized, but they are different.

Clanan 9y ago

> Estimates of the economic returns to higher education tend to assume that all students will graduate. In practice, around 30% of students in Europe and 40% of students in America will drop out before earning their degrees. This leads to a dangerous debt situation. I saw this up close in New Mexico. The state gave everyone a "bridge" scholarship which covered the first semester of college. Students who had no business going to college would go anyway and get a loan to cover the second semester. They would fail out and be stuck with a nasty loan for no good reason.

juanmirocks 9y ago

My story. I've even done a PhD myself. I'd barely recommend doing a degree anymore to most people. The pace of change is huge and universities are barely keeping up. The most needed is practical skills, which you can take on the go and use online learning courses.

ericmcer 9y ago

We are in a capitalist system that optimizes around financial gain. Our educational system has traditionally not had the same goals. Its not hugely surprising that it is not the best vehicle for creating perfect financial goal achieving cogs. Apprenticeships, Bootcamps, online training, etc. are way better for a vocation oriented education. You lose the well rounded, empathic, and critical thinking gains that a traditional college education rewards, but we don't seem to really care about those qualities anymore anyway.

snambi 9y ago
Instead of calling it education, the term brain washing is more appropriate. :))

forkandwait 9y ago

I have to wonder if there is some PR agency funded by nefarious oligarchs pushing the "education is a waste of time" bullshit in order to make sure we have enough semi-literate, alcohol and tv addicted people to work in warehouses and production lines and fast food. Because, really, it is a crock of shit. Sure, one can list unsuccessful people who went to college, or successful people who didn't, and your friend's cousin that you heard of who got an art history degree and too much college debt and now works on a fishing vessel in Alaska, but really, the overall assocation is completely clear. While it is true that correlation does not "prove" causality, it does go a long way to supporting causality in this case. Here is the worst case: You drag yourself through a communications degree at Ryegrass State, with a B- average, and no technical training. This degree basically guarantees you an entry level job in a government bureacracy making 35,000 a year, with the chance to promote to 100,000 once you figure out smoking pot and playing video games really is a waste of time like your uptight uncle always said; you probably even like your job about 20 hours a week, and it isn't going to wreck your body by the time you are 45, and you might actually run a department someday. And you have a pension when you retire at 65. Here is a very accessible, good case: You come from a poor ass family, Dad makes 40,000 at the part store, but you study your ass off and get into a really good but not world class state university (UC Davis ... forgive me Aggies ...) and you get a computer science degree. You come out of school making 80K, probably promote to 200K over the next 10 years, have an exciting career making piles of money, with enough left over to help your siblings who listened to the "education doesn't matter" drivel they heard on HN. You probably go to city college for your first two years, live at home for your next two, take out loans for tuition and books and leave with $30,000 of debt; pay that off in a few years of coding, et voila.

HillaryBriss 9y ago
> You drag yourself through a communications degree at Ryegrass State, with a B- average, and no technical training. This degree basically guarantees you an entry level job in a government bureacracy making 35,000 a year ... wait. it does? is that really true?
- solatic 9y ago

HillaryBriss 9y ago

Requisite link to Professor Bryan Caplan's case against high spending on education in the current system: "The key issue ... isn’t whether college pays, but why. The simple, popular answer is that schools teach students useful job skills. But this dodges puzzling questions." More here: https://www.theatlantic.com/magazine/archive/2018/01/whats-college-good-for/546590/ https://www.theatlantic.com/magazine/archive/2018/01/whats-c...

mhneu 9y ago

Higher education in the US has been seen as a way to improve one's lot in life - to climb the class ladder. That's still true. But there was a window in the 1970s-1990s in the US where it was MUCH easier to use college and hard work to advance. Tuition was lower and it was easier for poor and middle class kids to get in. Today, tuition has skyrocketed and the middle class is completely filled with kids who hire college consultants and train for standardized tests. Kids outside that elite sphere are at a big disadvantage. That wasn't true in the 70s and 80s, but eventually the upper and upper-middle class figured out how to take advantage of college opportunities and crowded out the working and middle classes.

pm90 9y ago
That's not strictly true. Colleges are getting more applications than every before and are many of the best ones have tuition assistance programs for those who can't afford tuition. However, its true that the awareness of these kinds of opportunities is spotty among the poorer sections of American society.
- notfromhere 9y ago
  it doesn't matter if there's tuition assistance. Growing up poor you're at a profound structural disadvantage to even get into those schools.

antisthenes 9y ago

And significantly underestimated the returns of accumulated and concentrated capital.

derivt 9y ago

Higher education is not overestimated if it gives you better opportunities for the future. Perhaps some kind of higher education provides little economic value. I think that from a personal point of view, what you get from higher education depends a lot of what you put into the table, if you are a hard working intelligent guy and you have the ability to focus in what you are really good at, investing in higher education will give you a good ROI.

triviatise 9y ago

I graduated in 1992 and my state school (UIUC) cost around 4K year + 10K housing, easily worth it. Today it is 30,000. Still probably a pretty good deal. Over 25 years, the cost probably rose by about the same as inflation. For schools that cost 100K+/year, parents would be better off taking the 400K and investing in the S&P 500 over those 4 years. Because of compounding, their child would never need to save a penny to have an outstanding retirement. If the money doubles around every 8 years (9% ish) and they retire in about 48 years, they get 6 doubles, so their 400K is worth approximately 25 million (in non inflation adjusted dollars)

TheCoelacanth 9y ago
100K/year schools aren't for education. They are for class signalling. Someone who graduates from the school is either a member of a certain class or part of a select group that the school deemed worthy of associating with that class.

socratewasright 9y ago

One way to approach this could be to allow community colleges to give 3y or 4y degrees for certain majors. It could significantly reduce tuition costs.

analog31 9y ago

In my view, it has become extremely popular to believe that higher education is a waste of money and time -- famous people like Peter Thiel are promoting the idea, and there are of course supporting "studies" like there are for all popular ideas. But there is a caveat that I see: If it is true that not all people benefit from college, likewise, not all people benefit from not going to college. I'm thinking of myself here. I would have been a terrible bricklayer. For one thing, I'm not a physically strong person, though laying bricks might have rectified that situation. I also don't know if I would have been able to live with the nature of the job for 45 years, including its physical effects. I might have been a terrible computer programmer. I learned programming in high school, at a time when it didn't require a college degree. But would I really have enjoyed being a programmer for 45 years? And so forth.

th3byrdm4n 9y ago
The most important aspect of education is learning how to think. Whatever the vocation.

golemiprague 9y ago

The feminisation of the educational system has a lot to do with it. Females are more about credentialism than actual seeking of knowledge and applying it. Once they clogged the education system, from being the teachers in schools to filling up the universities, the whole system titled towards the female paradigm which is just having the credential in something matters more than actual knowledge or any pursue of application of the knowledge in the real world. There will never be a woman Bill Gates or Mark Zuckerberg, you will never see a youtube video saying "look what I have done in my garage" and find out a woman in it, because women are about credentials, not about seeking and applying knowledge. We should reduce the amount of women in universities to 20% and that's should solve most of the problem.

rexgallorum2 9y ago

Education is a sacred cow for cultural reasons and probably a gigantic waste of resources on the whole. I think it would help to step back (rather like an anthropologist) and ask fundamental questions regarding the social, cultural, and economic functions of education in a given society or economy (or globally) and go from there. Regarding practical, real world questions on the value of a college education, I can only say this: as much as I dislike German-style educational tracking, the so-called 'dual system' in Germany does produce interesting results, and provided the right conditions, something like it could be put into practice elsewhere. At the very least it provides workers with the necessary technical skills to do their jobs while shielding them somewhat from competition from outsiders (this protectionist function should in theory help buoy up wages and add job security, though collective agreements and general employment law contribute to both) without without sending them to college. One can and should of course debate the merits of general education and its putative political, social, and cultural benefits, but if we are talking about the bare-bones technical skills and practical experience needed to do a job, a parallel apprenticeship and vocational training system as exists in Germany is a viable alternative to university. I could say a lot more, but I will leave it at that for now.