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Every statistic tells the same story: If you want to earn more, learn more. Between 1973 and 2007, real wages fell 15 percent for non high-school grads; stayed

by edw519 16y ago

Every statistic tells the same story: If you want to earn more, learn more. Between 1973 and 2007, real wages fell 15 percent for non high-school grads; stayed flat for high school grads and workers with "some college"; and rose 18 percent for both college grads and advanced degree grads. Upshot: Just as the cost of college has become prohibitive for many families, the benefits of college have only increased. Perhaps OP spent too much time memorizing textbook details in college when he failed to learn what almost every Hacker News reader has long known: Correlation != Causation Just because there is a correlation between "years of education" and "income", it does not necessarily follow that "less education" causes "lower income". Just a few scenarios where correlation != causation: - One without the ambition for education may similarly lack ambition for anything, including hard work. - One with family responsibilities may lack the opportunity for both college and a better job. - One with health issues will have equal difficulty pursuing higher education and a higher earning job. - One able to afford long years of schooling may already be better positioned by family/friends for higher paying possibilities. - One who cannot even imagine going to college (for any reason) may have equal difficulty imagining succeeding in anything. In each of these cases, lack of education didn't cause lower earnings, but both were the results of some other cause. I imagine there are many other scenarios, as well.

_delirium 16y ago
Especially for the "professional degrees" and "masters" categories, there may also be some causation in the reverse of the implied direction, where people who already have good jobs are more likely to have their employers encourage and pay for them to go get a degree (especially common for MBAs, but also not uncommon for engineering masters).
equark 16y ago
While your point is theoretically valid, the evidence in the academic literature suggests that the causal effect of education on earnings is roughly the same as one would get by doing a naive regression of earnings on education at the individual level. There's a bias with respect to ability, but it's on the order of 10 percent, and measurement error in education variables attenuates the naive estimates, balancing things out. There are a number of natural experiments that caused specific groups to get more education than others. This evidence has led to a pretty broad consensus that the returns to one additional year of education are about 10 percent. See: http://www.demog.berkeley.edu/~ebenstei/litreview/Handbooks/Card_HB.pdf http://www.demog.berkeley.edu/~ebenstei/litreview/Handbooks/...
ohyes 16y ago
I think you are, perhaps, playing with the definition of causation in a strange way. Causation is constant conjunction of events; that these things are correlative, and that there are other mitigating factors possibly leading to both at the same time, does not mean that there is not a causal relationship between them. Correlation does not imply causation, but it also doesn't prohibit causation. None of the things that you listed really have an effect on a causative relationship between education and income (even though they might be contributing factors to both). From a common sense perspective, quite a number of high paying jobs require a technical or professional degree. When you post a job listing, there are often educational requirements. If you don't have a college degree, the highest paying fields, such as doctor, lawyer, engineer... are completely closed off to you. With the industrialization of HR in modern companies, certain things, like years of education, are certainly used to 'weed out' candidates. (Try applying to an engineering job with just a GED). Aside from that, the author isn't really implying a causal relation, he is just stating a strong statistical correlation. If you want to make a boatload of cash, chances are that getting an education is a good idea.
- yequalsx 16y ago
  I think the "correlation != causation" response is overplayed. Thank you for your reply. I was about to respond similarly but what you said was more succinct than what I was going to write.
jordan0day 16y ago
Certainly on an individual scale, less education doesn't necessarily guarantee less money, and more education doesn't necessarily guarantee more money. In the large, however, I think it's safe to say that a society that has more well-educated people will tend to have more wealth than one with few well-educated people, all else being equal. The old "correlation != causation" line is, I think, orthogonal to the real sentiment of the author's argument. I mean, I don't agree with our (USA) society's current viewpoint that college is basically high school 2.0, and everyone is expected to go. With employers generally requiring college degrees even for jobs with illustrious titles such as "Administrator" (secretary), I understand why someone would pursue a degree even if they have no love of learning.

by edw519 16y ago

_delirium 16y ago

Especially for the "professional degrees" and "masters" categories, there may also be some causation in the reverse of the implied direction, where people who already have good jobs are more likely to have their employers encourage and pay for them to go get a degree (especially common for MBAs, but also not uncommon for engineering masters).

equark 16y ago

While your point is theoretically valid, the evidence in the academic literature suggests that the causal effect of education on earnings is roughly the same as one would get by doing a naive regression of earnings on education at the individual level. There's a bias with respect to ability, but it's on the order of 10 percent, and measurement error in education variables attenuates the naive estimates, balancing things out. There are a number of natural experiments that caused specific groups to get more education than others. This evidence has led to a pretty broad consensus that the returns to one additional year of education are about 10 percent. See: http://www.demog.berkeley.edu/~ebenstei/litreview/Handbooks/Card_HB.pdf http://www.demog.berkeley.edu/~ebenstei/litreview/Handbooks/...

ohyes 16y ago

I think you are, perhaps, playing with the definition of causation in a strange way. Causation is constant conjunction of events; that these things are correlative, and that there are other mitigating factors possibly leading to both at the same time, does not mean that there is not a causal relationship between them. Correlation does not imply causation, but it also doesn't prohibit causation. None of the things that you listed really have an effect on a causative relationship between education and income (even though they might be contributing factors to both). From a common sense perspective, quite a number of high paying jobs require a technical or professional degree. When you post a job listing, there are often educational requirements. If you don't have a college degree, the highest paying fields, such as doctor, lawyer, engineer... are completely closed off to you. With the industrialization of HR in modern companies, certain things, like years of education, are certainly used to 'weed out' candidates. (Try applying to an engineering job with just a GED). Aside from that, the author isn't really implying a causal relation, he is just stating a strong statistical correlation. If you want to make a boatload of cash, chances are that getting an education is a good idea.

yequalsx 16y ago
I think the "correlation != causation" response is overplayed. Thank you for your reply. I was about to respond similarly but what you said was more succinct than what I was going to write.

jordan0day 16y ago

Certainly on an individual scale, less education doesn't necessarily guarantee less money, and more education doesn't necessarily guarantee more money. In the large, however, I think it's safe to say that a society that has more well-educated people will tend to have more wealth than one with few well-educated people, all else being equal. The old "correlation != causation" line is, I think, orthogonal to the real sentiment of the author's argument. I mean, I don't agree with our (USA) society's current viewpoint that college is basically high school 2.0, and everyone is expected to go. With employers generally requiring college degrees even for jobs with illustrious titles such as "Administrator" (secretary), I understand why someone would pursue a degree even if they have no love of learning.