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Is College Still Worth It? The New Calculus of Falling Returns [pdf]

247 points by SQL2219 7y ago

kazinator 7y ago
> Combined with a continuing surge in the number of new college graduates entering the labor market, this resulted in stagnating wages in those jobs along with a “cascade” of college graduates into lower-skill jobs. These underemployed college graduates, in turn, pushed some low-skilled workers out of the job market altogether. Right ... yet, believe this paper when it says that those pushed-out-of-the-job-market low-skilled workers with no college degrees are not any worse off.
blondin 7y ago
college provides such access to knowledge not available anywhere else (not legally to my knowledge). any progress is most likely to come from academia first due to that concentration of knowledge. so if we are truly heading towards a collegeless future, i am hoping that anyone who can contribute to research can get access to that knowledge. money is a major concern, but if we can't make progress then we have a bigger issue.
- crimsonalucard 7y ago
  The internet changes this in a major way. However, colleges force students to learn what experts deem as important. This is very important as students tend to want to learn what's interesting over what's fundamental and important. In my mind, university is ALWAYS better then no university, the actual thing that puts this in question is... is the cost worth it?
kerkeslager 7y ago
One thing I don't see talked about a lot is the risk involved in going to college. All the frequently-cited studies about college look at the incomes of college graduates versus the incomes of non-college graduates, and then compare that to the cost of education, and that generally looks fairly positive. But of students who enroll in 4-year programs, only 60% graduate within 6 years[1]. For these students, college has actively harmed them: they're saddled with crippling debt, but don't get the benefits of a college degree. Also consider that they aren't working as many hours, if any, during college, so they lose even more in wages they could have earned. The EV if starting and finishing college is coming into question, but the EV of starting college is clearly negative if you have only a 60% chance of finishing. [1] https://nces.ed.gov/fastfacts/display.asp?id=40 https://nces.ed.gov/fastfacts/display.asp?id=40
- asutekku 7y ago
  Or they got a job before graduating. Tech companies actively hire people from universities, those 40% are not inherently negative.
  - kerkeslager 7y ago
    If we're talking anecdotal experience, I'm one of the people who you're talking about, and if I could go back in time, I'd a) not have done any internships and b) not have quit college. But let's not discuss anecdotes, because that's not how policy should be determined. Let's keep the focus on data. What you're describing happens, but it's enough of an outlier that it doesn't tip the median outcomes to the positive. People with some college but no degree still have above-median unemployment and below-median earnings. In fact an associates degree only gets you below-median unemployment: it still doesn't allow you to reach median earnings.
- austenallred 7y ago
  Bingo
- kevindong 7y ago
  The 6 year graduation heavily differs based upon selectivity of the university in question. From one of the related tables linked in your source [0]: > Graduating within 6 years after start, males and female > 2011 starting cohort: 60.4% > Open admissions: 30.7% > >=90% accepted: 42.3% > 75-89.9% accepted: 57.8% > 50-74.9% accepted: 62.0% > 25-49.9% accepted: 70.3% > <25% accepted: 86.9% [0]: https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.asp https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.a...
  - kerkeslager 7y ago
    Yes, this is one of the problems: many schools are letting in students who are unlikely to succeed without extra help, and not providing that help. Many students who enter college lack the prerequisite knowledge to complete even introductory college classes, and are placed in remedial classes. These classes don't count for college credit, but cost the same as college classes there's a limited pool of financial aid available to a student, and typically this pool is smaller for remedial students, who are less likely to qualify for merit-based aid. The results are devastating: only 9.5% of remedial students graduate from two year programs within three years, and only 35.1% of remedial students graduate from four year programs within six years. [1] https://postsecondary.gatesfoundation.org/remedial/ https://postsecondary.gatesfoundation.org/remedial/
dahart 7y ago
> we find that controlling for the education of one’s parents reduces our estimates of college and postgraduate income and wealth premiums by 8 to 18 percent. Controlling also for measures of a respondent’s financial acumen—which may be partly innate—, our estimates of the value added by college and a postgraduate degree fall by 30 to 60 percent. Taken together, our results suggest that college and post-graduate education may be failing some recent graduates as a financial investment There is no doubt in my mind that someone’s parents’ status and education, and someone’s financial acumen, are both leading to higher incomes and wealth. Why does it make sense to “control” for these things? Doesn’t this lead to a distorted view, where large real differences in income between two people are factored away? Sure, financial acumen might be partly innate, or correlated with IQ or family status, but some people surely gain financial acumen precisely by going to college? Sure, parent’s education is a great predictor or ‘own education’, but does that really imply the alternative- that when the professor’s kid is a high school dropout that the kid is better off than other dropouts? Is that supported by the data? Maybe yes, because daddy prof has more money to support his kid, but what happens with the dropout’s kids and future generations? I’m not arguing that the premium isn’t going down, it’s true that tuition is out of control, but I’m not sure I understand how the methodology here isn’t painting a starker picture than reality. Discounting 50% for ‘acumen’ is a huge influence on the numbers, and when you don’t discount for parents and acumen, the reality is that people with college degrees are earning a lot more actual money.
tardo99 7y ago
It's funny to me that people can immediately see the issue with falling returns here as prices increase, but can't see the same thing when it applies to the stock market. In the stock market, the prevailing wisdom is "buy and hold no matter what the price is, because you can't time/game the market." Why doesn't the same logic apply to college? Shouldn't the efficient market cause college costs to rise to the appropriate level? Given that, shouldn't you just do it and ignore the cost?
hurricanetc 7y ago
Three words. Income Sharing Agreement. Banks and insurance agencies have already calculated what a degree at a particular college is worth. People just tend to get really butt hurt when they see that a degree in Tuba Performance from NYU is not valuable.
thrwaway69 7y ago
Regardless of any opinions on either side, I don't understand why we have made degree a social prestige? Someone in the comments said degree values will degrade and they are probably right as it happened with lower education as more and more people got in. Maybe there are lack of jobs or companies are exploiting people by making them grind more in an artificial constraint environment or some people are hogging off the resources and causing major inequality in pay gaps? I have no doubt education is valuable and so is experience but why does that have to compress or translate into a paper? Should we really be running on an old feudal model of producing workers in 2020? I have a lot of questions. I dropped out of school recently due to the toxic culture degrading my health to the point I am severely antisocial and definitely depressed enough for no reason. The competitive grind is worse in countries with overpopulation and the quality is just outrageous. I just wanted to work on something cool, become a surgeon but that route was sealed at 10. No money, no family prospects, grinding is too difficult and being a drug addict and die young seems a better option if you had a non functional childhood due to the whole burden later on. I thought life would improve with vast improvements in productivity and industrial revolution but what we got in the end seems to be mostly cosmetic for the past 20 years. Yes, having the ability to order food or communicate is nice but that was doable before too. Taxi on demand? Well, we had numbers before (even though I was born in 00s), my dad has stories of it. Fancy animated avatar on social platforms seems cosmetic. What else really changed in life quality?
LessDmesg 7y ago
When signing up for my current job, I didn't even bother bringing them my master's degree. Too bad because it's from one of top two tech unis in the country. Not to downplay the benefits of higher education, but it's certainly not a prereq for good employment these days.
t34543 7y ago
I work in software and I’m a high school dropout. I’ve never even been asked if I have a degree, I just leave that field blank.
anovikov 7y ago
I'd offer a much simpler explanation: education is mostly a competitive tool, when more people have it, it's value naturally declines right? As fraction of population with a college degree increased from about 4% in 1940 to about 30% today, obviously advantage offered by it, declined. And went to essentially zero if measured by wealth because wealth is something only top of population pyramid has, in general: fewer than 30%.
keiferski 7y ago
A proper title would be Is College Still Worth It [Financially]? Evaluating an education purely on economic terms is the wrong move to make, but unfortunately an increasingly common one.
- mooreds 7y ago
  What other terms should be included? I can think of a few: * Life experience * Knowledge gained * Friends made But what would you add?
  - emodendroket 7y ago
    I think there is a societal benefit to the average person having more education. If we're being honest, many jobs don't even require a high school education.
  - keiferski 7y ago
    Those three categories are pretty broad and essentially cover everything, but my own personal addition would be: becoming aware of "unknown unknowns". A proper university education exposes you to knowledge and worldviews that you previously had no idea even existed. This is the fundamental problem with self-education: you tend to get stuck in local loops based on your current interests, motivations and knowledge. Sure, the information is out there, but without a proper introduction by an expert, real-world peers learning the same material, and the overarching school structure, it may as well be written in hieroglyphics. External education, when properly designed, should broaden the mind and prepare it for self-education, but without it, you often end up with a fairly limited view of the world shaped by whatever you personally find interesting.
    - paganel 7y ago
      Agree with the unknown-unknowns, the problem is (at least from my pov) that University nowadays mostly familiarizes you with unknown-unknowns that are kind of boring, i.e. stuff that will potentially bring you (the University atendee) financial and societal returns further down the road (I get why they do that, I’m not criticizing them for it, just exposing what I think happens). Again, from my pov most of the interesting and not-boring stuff that can be studied does not have that many financial or societal benefits further down the road, and as such self-education seems one of the few ways of gaining knowledge about that stuff.
mooreds 7y ago
I have some kids and college is about a decade away for them, so this is pretty timely. I remember reading a post in the 2000s about whether the internet (or, more precisely, some application built on the internet) would do the same thing to colleges as Craigslist did to the newspapers. Peel off the valuable bits and by doing so disaggregate and destroy/heavily damage the institution. Still waiting for this to happen, but maybe lambda school and bootcamps are the start. I expect credentialing of schools and the longer engagement with colleges to make the transition longer. Bit I don't see how colleges avoid being unbundled.
- emodendroket 7y ago
  I have a degree, but not in CS, and after seven years in the industry I still occasionally come across recruiters who treat me like I must have no idea what I'm doing, or interviewers acting like I must be a genius for solving easy problems. It's got to be worse if you have no degree at all. I'd tread carefully.
  - non-entity 7y ago
    When my coworker discovered the other week that I didn't have a degree, he straight up told me a couple of years ago, the company wouldnt have even thought about hiring me.
dustinmoris 7y ago
Disclaimer: I don't have a degree and I've had a very successful career as software engineer so far. I think the concept of university is mostly a time waste and the reasons for it is: - University is the concept of someone teaching you a topic and then you being able to claim you are qualified in this topic. However, people nowadays need to train themselves in complete new fields multiple times in their lifetime and therefore we already have to teach ourselvs new things all the time and be able to proof that we are qualified in something without a university degree. So why a degree in the first place? - Before we had the internet, digital books, online training courses and other learning materials at our fingertips one had to go to a different physical location packed with other students and learn a subject at a slower pace so that everyone could equally follow the topic. Today this is a waste of time. If one has access to all the learning materials themselves, then they can consume it at their own pace, possibly learn a 3 year course in a single year. Why slow yourself down unnecessarily? - Experience > degree. After the first 2-4 years of work experience nobody cares anymore about your initial degree, unless it's medicine or law. Once you've worked, people are interested in your actual ability to deliver and after 2-4 years there's enough data to convince someone how good you are. - The more people have a degree, the less it's something which makes you stand out. I believe that being different is the best way to stand out from a crowded and competitive market, no matter how. Basically you want to be part of the minority. If nobody has a degree, you want to have a degree, if everybody has a degree, then you don't. People like to see something special in other people, if you can convince them that you know something without going through a lengthy programm like everybody else, then people will think you are smarter or something like that (even if it's not true). This only works though if your in the minority. It's the same pshycology which allows one person to charge 300% more than competitors and having the largest share of customers, because they think that there's something inherently better about it. - In many countries attending university means creating debt. There's good debt and there's bad debt. If I take credit to buy a property which has very high and real chances of drastically increasing in value, then it's good debt, but if I take credit in order to learn something which I can learn myself and which after 2-4 years won't even matter anymore, then it's possible very bad debt. I know someone who paid 150k for an MBA at a business school and I think the money was wasted. If you pay 150k on an MBA in business, then clearly the course material will be entirely wasted on you. 150k is good money that could have been spent so much better in other areas, like buying property and then see the value grow whilst receiving passive income through rent or investing in an actual business which you want to create after the MBA.
lordnacho 7y ago
College seems to be a thing to get done quickly, and cheaply. Probably even with the easiest courses. Why do I say that? - The more time you spend, the more time you're not working and making money/experience. You're also in a quite restricted social group with only the professors providing contact with older, more experienced people. - There really is nothing you can learn in college that isn't public knowledge. At best you get a better idea of what the experts think is important in a field. So for instance I didn't read Marxist or Austrian economics. - Nobody is going to know whether you did that advanced course on category theory for coders. I'm sure it's both interesting and relevant, but you have more time to learn this yourself, when you're not being judged by an exam. - You'll also learn things better when you're not constantly thinking about proving it on an exam. - Everything is college is really an intro. A really evil one where you're asked to fly over some field and then get asked some very specific questions when it comes to exam time. - Of course there are things that really are work relevant at college, especially programming related stuff. It's hard to know what they are as a novice, but looking at it now it seems anything where you're in the practice of using a repo and iterating a solution is what you're after, or using common tools like git or tmux (there's a lot). That can occur in many types of courses though, whether it's systems or human interface and so on. Since there's a lot of Americans here, and I have some experience of that system, I'd say go to Europe. Or the UK, if you like keeping it in English. In Europe, most of the courses are very specific and short. I got a Masters degree 4 years after high school, and I wasn't even at uni for most of the year (3x8 weeks a year), so in theory it could have all been done in 2 years. Which puts into perspective how much you're actually learning there.
daodedickinson 7y ago
Degree never helped me for shit. Someone rescue me...
bitxbit 7y ago
The last time I looked at this data (lifetime earnings) the difference was close to $1M on average for men and substantially lower for women. The opportunity cost of going to college is about 1/5 of that difference if you pay up front but substantially more if you take out loans. Here’s another thought that’s not discussed in any of the studies: what’s the impact of someone attending college later in life? Say in late 20s? I’d argue that the degree has greater impact on remaining future income under that scenario.
fxtentacle 7y ago
I wonder if HN is a good place to discuss this, because we have a pretty niche group of ppl here. A big chunk of the HN crowd seems to be self-taught highly intelligent and highly motivated young guys who as a result became astronomically good in their craft. For those people, potential employers will go out of their way and bend their own corporate hiring rules to get the no-degree candidate past HR. And then there's the normal people working normal jobs. For those, not having a degree will immediately disqualify them from 50%+ of the available job openings. But this crowd is only marginally represented on HN. Since it's like the last thing where young people need to be disciplined, I'm sure many companies will treat a degree more like a proof that you're reliable enough than like the additional education that it was supposed to be. That also explains why "degree" has become a HR checkbox where nobody cares about the specific skills that you supposedly learned. So the correct question is: How do you prove your reliability (by getting a degree) in the cheapest way possible? As for grad school, that's really only for people who are idealistic and value research higher than job security or having enough money to feed a family.
- wojcikstefan 7y ago
  You seem to make a lot of assumptions about people who do and do not visit/participate on HN. Is it based on a feeling or is there some data available on that topic?
  - kortilla 7y ago
    Ignore the assumption. The question remains valid. If the assumption is wrong there are more people to answer it.
  - TheGallopedHigh 7y ago
    Sometimes data is not the only thing you need. Example: the statistical significance of a parachute to avoid death or trauma when jumping from a plane. “Conclusions: parachute use did not death or major trauma when jumping from a plane...” https://www.bmj.com/content/bmj/363/bmj.k5094.full.pdf https://www.bmj.com/content/bmj/363/bmj.k5094.full.pdf
throwno 7y ago
If trades make so much money, how come no one is bitching about fatcat plumbers and roofers? Why hasn't the NY Times published any articles about how "Big Plumbing is soaking the middle class" etc.? For all the ways the middle class is getting hammered, I have yet to see one book about how plumbers are killing the middle class like I have with doctors, lawyers, techbros, and bankers. Until a journalist from NY Times or Bloomberg writes a book about how the decline of the American middle class is due to a plumbing conspiracy, you're just not bourgeois. Sorry.
- i_am_proteus 7y ago
  Because the value a roofer adds is obvious and the value an attorney adds is questionable.
- throwaway100773 7y ago
  The issue is that trades don’t scale like all of the things you mention. Even if you own a very successful plumbing company, your ability to scale is constrained by geography, labor costs and finding people you can trust to manage your company. Not to mention, there are market forces working against the plumber trying to scale, and the plumber’s ability to affect policy is proportional to the ability to scale. Anecdotally, plumbers charge more per hour in some cases than many lawyers make. Their income, however, is limited by their ability to book many jobs and actually carry them out. The opportunity cost of one job is exactly another job. So comparing to other wage earners their income is high, but compared to a banker that can make several loans in the course of a day where the opportunity cost is only capital (which they have practically unlimited access to being that theyre a banker) changes the situation quite drastically.
  - chrisseaton 7y ago
    > The issue is that trades don’t scale like all of the things you mention. The UK famously has a plumber worth $100 million - Charlie Mullins.
    - throwaway100773 7y ago
brownbat 7y ago
This is a really interesting addition to the literature if you dig through it, with subtle distinctions between income gains and wealth gains and interactions with demographics. It's not a simple "college ain't what it used to be" story. The biggest puzzle is how to explain why recent grads still command significantly higher incomes than nongrads without accumulating significantly more wealth. Increasing tuition is a factor, as is the declining return on capital gains over successive generations. Limited financial literacy and predatory lending seem to be hurting recent grads too. Most notably, the inability to discharge school debt in bankruptcy since 2005 may have had strong effects. That last legal change remains bewildering to me. You have three parties: schools, financial institutions, and teenagers. So uneducated teenagers are expected to know whether or not their choice in school, degree, expenses, and personal background will make their education worth it? When the other parties have all the data and experience? And if it turns out everybody was wrong, the now barely-employed twenty-something is least prepared to absorb the burden. More importantly, the least susceptible to incentives to improve this endemic situation for other future students. It creates a moral hazard which drives schools to overprice courses of education that are higher risk, and removes any incentive for lenders to educate borrowers on expected returns from different choices. Policy circles are hotly debating right now how to overhaul the entire system. Maybe we should acknowledge the policy changes that helped break everything in the first place, and reverse those as soon as possible.
- macspoofing 7y ago
  >Policy circles are hotly debating right now how to overhaul the entire system. No guaranteed federal loans would fix everything. This means tuition loans could then be discharged and the lender would be more discerning about loaning to a student heading to some boutique private college with sky-high tuition and ending up with a humanities degree.
  - Retric 7y ago
    Discharable loans would also increase interest rates by about 2%. That’s 100$ a month for 60k worth of loans, which makes them even harder to pay back.
jakobmi 7y ago
Why not study at a top German university instead? It's 100% free and you get a ton of international experience, learn a new language, and can still go to MIT/Harvard/Stanford/... for your master's or thesis
WomanCanCode 7y ago
College degree is only worth for high income positions like surgeon, medical degree, nursing and some engineering field (chemical?). It's just not useful for middle class income like teaching etc. But good luck in trying to get an interview without any kind of diploma. They will think something is wrong you.
grumple 7y ago
Wasn't worth it in the US when I went (graduated 10 years ago). If I could go back in time, I'd tell myself to go right into industry.
NPMaxwell 7y ago
This paper argues implicitly for getting a college education. Reason is that very few people would be able to understand this paper before getting a college education. Many Americans may graduate college without being able to understand this paper. For those who do graduate able to understand the paper, I'm sure college increased their earning power and wealth.
mattbillenstein 7y ago
I made a very simple one spreadsheet model just yesterday after talking about this with a friend: https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7m3EWB7v4Hguj8bVVws62Ym8/edit?usp=sharing https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7... Every student should do a cost/benefit analysis of what a degree from a given institution will be worth to them - too many students fall into massive debt they can never pay back.
anjel 7y ago
Higher learning was is and will always be "worth it." Knowledge is good. Bloatful College administrations not nearly as much. Funny how no one ever studies their utility/cost returns.
drallison 7y ago
Acquiring the "college income premium" is not the reason for going to college. College and universities allow students relatively unfettered exploration of ideas and social interactions. While some of us manage to do that without the umbrella of academia, most of us fare better at a college. Moreover, colleges and universities (especially the great research universities) provide a way to push back the boundaries of human knowledge and transfer concepts and technology to a new generation. College is where you meet friends and lovers.
ryanmercer 7y ago
I don't have a degree and am constantly told in rejections by potential employers, and my own employer when applying for advancement, that they are looking for degree holders. Many job listings also flat out state a 4-year degree is a minimum. A degree would absolutely, positively, beyond any shadow of a doubt improve my chances of increasing my income. At my current job only about 7%. But the tens of thousands of dollars of debt I'd have to take on to get that degree at 4.5-7% interest (or higher)... yeah thanks but no thanks. So, anecdotally at least, I can agree that there are pretty diminishing returns to getting a degree. While I'd be all but guaranteed to increase my income, I'd be paying out more though: a 20k 10-year loan at 6.8% (finaid.org suggested this %) interest means I'm paying 27,619.31 a 40k 10-year loan at 6.8% interest means I'm paying 55,238.63 At my current income the 20k loan, bumping up one position and considering our raises inside a position are limited to less than 3.5% annually based on a rather arbitrary 'merit review'. It would be 7-10 years of my increased pay just to cover the loan, assuming no taxes were taken on the increase but also factoring in insurance increases. That means in 14 years I could start keeping more money from that 4 year degree if I could manage a 20k$ degree. Ha!
- esotericn 7y ago
  Aren't you contradicting yourself somewhat here? The alternate universe version of you wouldn't have the same job - as you say in paragraph 1 you'd work somewhere else. People on here earn top percentile salaries which warp the calculus, myself included, but $50K is approximately one year of the UK median income (I imagine the US figure is similar). I'd be worried about making back hundreds of thousands in a low paid field. But a 50K degree in a well paid field is a no brainer to me. Earnings increases are cumulative. I'm almost certainly 200% over what I'd have without my undergrad, and not just due to the piece of paper.
  - incone123 7y ago
    UK median income in 2018 was GBP 28,400 which is at today's rate about USD 36,600. I don't see why you made the comparison though? The person deciding to start a 4 year degree can't assume they personally have an opportunity cost of 4*annual median earnings.
throwawayjava 7y ago
Their familial controls don't make much sense to me. An actuary's kid will have an easier time becoming an actuary. Same for lawyers and doctors. That doesn't mean that college is a non causal factor in those students lifetime earnings... Quite the opposite. You're not becoming any of those things without college. The student went to college precisely because they understand viscerally and precisely how college sets them up for a life of higher than average earnings. And what they need to do at college to tap into that potential. Similarly, I'm not sure I believe the claim that there's no obvious causal link between education and financial acumen. The big difference seems to be "do you know WHY you are at college?" And in cases where the answer is yes, it's still a good choice.
- mlyle 7y ago
  > Their familial controls don't make much sense to me. There's a lot of recent evidence that, all else being equal (controlling for educational attainment, test scores, and grades) parental income/social class has a huge impact on income. That is, if you come from a lower social class, you can expect a lower income increase from college than someone coming from a higher social class. There's significant policy implications here-- our long-standing goal of getting lower income kids to take college loans and go to college may not have a positive expected return for them.
  - vasilipupkin 7y ago
    no, that’s completely wrong. You are confusing averages and conditional probabilities. On average, those from higher classes may do better - that doesn’t mean that a kid from s lower social class should take that as guidance. It means we should try to erase or lessen differences of opportunities between classes. Some of these differences are probably innate. A brain surgeon is likely smart and his kids are probably also smart. Some, but most are due to informational deficiencies and networking effects.
    - mlyle 7y ago
      > no, that’s completely wrong. You are confusing averages and conditional probabilities. On average, those from higher classes may do better - that doesn’t mean that a kid from s lower social class should take that as guidance. ??? You're saying that someone should not consider the outcome distribution of people similarly situated to themselves when making a choice? Isn't that completely rejecting empiricism? If, from a public policy standpoint, our effort has been to get to the poor to college to end poverty; and the educated poor do do better with education, but not nearly as well as their middle-class cohort; and the present-value of education is smaller than the present-value of their lifetime wage increases-- one has to question whether the policy is well informed. If you're asserting that the picture is unduly distorted by those at the very highest spread of the income distribution-- you're right. But the effect is still when we look at median outcomes. > Some of these differences are probably innate. A brain surgeon is likely smart and his kids are probably also smart. Presumably we'd be able to measure this and control for this. > Some, but most are due to informational deficiencies and networking effects. Yes, and various kinds of cultural cues about class of upbringing that persist after education and act to limit opportunity.
tamaharbor 7y ago
If 'free college' becomes the norm, it will become as valuable as what you paid for it - nothing.
cm2012 7y ago
I can't find the citation now but the biggest argument against college I've seen is that once you control for family income, life success is way more correlated to SAT scores/the college's you apply for than the ones you actually attend. This would imply that college success stats merely indicate that they are selective in who they choose to enroll. EDIT: Its not the one I'm looking for, but I found a good one. http://conference.iza.org/conference_files/CoNoCoSk2011/gensowski_m6556.pdf http://conference.iza.org/conference_files/CoNoCoSk2011/gens... shows that if you control for IQ, the average person makes $100k more over the course of their whole working life by getting a bachelor's. - This doesn't even account for the four years of work you lose by going to college instead of working. - Its based on data from people who mostly graduated before the year 2000, and by all accounts the value of college is becoming less, not more. It's also based on a calculation when college was much cheaper.
- dahart 7y ago
  IQ correllates somewhat with income and even more with school performance, so by “controlling for IQ”, the authors are intentionally flattening and hiding some of the income variation. They’re effectively discounting for the probability of going to college in the first place. That will, of course, hide differences in income due to going to college. The actual data shown in that reference seems to tell a different story, it shows people with college degrees earning 20-50k per year, on average, after taxes. That will sum to more than $100k over a lifetime.
  - cm2012 7y ago
    They account for that plus a lot of other factors in the 100k number. Basically the conclusion is, for people born from 1920 to 1980, college was net value add accounting for everything else, but not a huge one.
    - dahart 7y ago
      Yes, I know they account for that. Why does that make sense to account for IQ? That is explicitly discounting for college! The 100k number is a fictional number, it’s trying to answer the question of assuming the same person didn’t go to college, is it possible to calculate the true value of college. We could argue whether they actually calculated that number correctly, but what is absolutely true -- my point -- is that the actual people who had actual degrees actually earned a lot more than 100k extra over their lives, on average. The differences in wealth, illustrated by the data in that paper (see figure 1), are 2x-3x in annual income and accumulated savings much higher than 100k.
seem_2211 7y ago
I have a degree from a no-name university in New Zealand. I'd do it again for a few pragmatic reasons. 1: Lots of companies will reject you on sight without a degree. I don't think it's a good thing, but it is reality. 2: With a degree your ability to move overseas dramatically improves. I moved to America after graduating. I flat out couldn't have done that without a degree. Points based systems immigration systems like New Zealand have dramatic bonuses for people with degrees. 3: You don't have to jump through the hoops and explain why you don't have a degree all the time. Stupid reason I know, but it's something I've seen friends without degrees have to do constantly - and not just in career situations. As I mentioned, I went to a no-name university. If you live in NZ, you'll know it. If you're an American, chances are, you've never heard of it. But because I have a degree, it doesn't ever really come up. 4: The cost isn't that bad, when you spread it out over a career. My degree & living costs cost about $60k NZD (~$40k USD). That's $1k USD / year, or $.50 per hour. Considering how my income has multiplied in the few years since I've graduated (SF wages help tremendously here), the actual cost is barely anything, even when you control for the opportunity cost of studying. Where I think College returns make a lot less sense • Paying out of state tuition for lifestyle reasons, when you're going into a relatively low paid field afterwards (e.g. teaching). • Paying private school tuition at a school without a strong reputation • Grad school, in general, seems to be a rip off
- jhoechtl 7y ago
  What you are portraing is your exploitation of your countries education system for your own benefit. The NZ tax payer invested in yours for your future ROI into NZ and you put this ROI in your sack.
  - barry-cotter 7y ago
    The possibility of migrating to richer countries causes greater investment in education. https://appam.confex.com/appam/2018/webprogram/Paper27374.html https://appam.confex.com/appam/2018/webprogram/Paper27374.ht... > Using a new administrative dataset combining the universe of permanent migrant departures from the Philippines with the universe of institution-level post-secondary enrollment and graduation, we show that enrollment and graduation in nursing programs increased in response to demand from abroad for nurses. The supply of nursing programs increased to accommodate this. The increase in nursing enrollment and graduation during the period was much larger than the increase in nurse migration and contributed to a brain gain
JMTQp8lwXL 7y ago
One of the costs that is often excluded, if you go the "not college" route, is the toll of physical labor on one's body. Medical expenses can be substantial and you didn't earn as much as an office job may have paid.
- monoideism 7y ago
  > One of the costs that is often excluded, if you go the "not college" route, is the toll of physical labor on one's body That's why, for people interested in technology, software development is an incredible blessing. If you're clever about it, and plan ahead in HS, you can easily skip college and come out making $100,000/yr within 3-4 years, even in small markets. I've never taken a single computer science class, make well over $100,000 in a highly-challenging software development job, and no one has ever asked me about a college degree (with the exception of one job that I regretted accepted and which I quit in 8 months). There are other similar routes available to people without college degrees. Several wealthy people my parents know started out in construction, but rapidly moved into flipping houses and real estate, and made a fortune. Their physical labor was over by their late 20s. There are many paths that skip college and don't end up working physical labor after a decade or two. But you have to be clever and proactive (if you're on HN, I'm going to assume you're at least the former).
  - cm2012 7y ago
    Same for marketing. College degrees in marketing are useless. Real work experience can get you pretty good jobs much quicker
50 7y ago
Look, I'm studying undergraduate philosophy with no intention other than why not. Would I say I could learn the material on my own w/o college? Absolutely but I like the organized structure of college w/ professors, peers, etc. Am I getting into debt? A fair bit. Is it worth the trade off? I certainly think so. Will I say that five years from now? Most likely. Because here's the thing: education as a means to an end is not what it's all about, and so many of us subscribe to this fiction―to this warm stupor of society's fictions―that we forget what it is truly about. College will always be worth it such that you have an endless curiosity or enjoy erring in the direction of learning which is deeply rooted into failing, or rather, not understanding, over and over again.
- monoideism 7y ago
  > Look, I'm studying undergrad philosophy...Am I getting into debt? A fair bit.. Is it worth the trade off? I certainly think so. Will I say that five years after I graduate? Not sure but most likely. Spoiler. Been there, done that. Unless you're at an Ivy, if you're majoring in philosophy, you'll not think it was worth it in five years. My sin was Classics, but similar outcome. Assuming you're on HN because you're teaching yourself programming, the sting will be somewhat lessened (that's the route I took), since you'll at least be able to get a job. But it'll still sting to make those massive loan payments knowing that nothing you learned is helping you with your professional life, and that things like philosophy, mathematics, and languages (and computer science!) can be learned just as easily with discipline, YouTube, and a few good textbooks. It's very easy to delay the pain of loan payments when you're in school, but they'll be there waiting for you, inevitably, through sickness and health, marriage and divorce. If you have endless curiosity, college is even less worth it. Instead, being loan-free gives you the freedom to work in areas that truly intrigue you, and to work in very low-paying internships while you're learning. But I know I won't convince you. Likely no one could have convinced me at the time (although only one person tried, once). Edit: if this were the 1970s or earlier, when you could pay for college classes from waiting tables or a $10,000 loan (inflation adjusted!), I'd absolutely say go for it. But taking out even $50,000 in debt at age 18 for anything less than a guaranteed job with a good income (physician assistant, nursing, accounting) is mortgaging your future. Taking out $200,000, which is the going rate for most [edit: should read "many, private", and is probably closer to $100,000] liberal arts 4-year-degrees, is insanity, but between culture BS about degrees and "academic counselors", I know it may not seem that way to you right now.
ransom1538 7y ago
A person in our family is a specialized nurse. Two years of school, then some more training. $60hr any hour they "wish" to work. Saturdays/Sundays are $90hr, so is any hour after 8 hours. The demand is so high he just rejects work. If he wants to work in American Samoa or Miami: hired. I hired a person to install a garage door. $900 for an hour of work. My plumber wont show up for a 30 minute $300 job. I will call again, tomorrow fingers crossed. Get your brakes replaced - look at that bill. Try outsourcing that. Everyone I meet that works at starbucks has a masters AND 90k in student debt. Bankruptcy doesn't make student loans go away. I think things are about to start swinging in the "non-college" direction.
- anoplus 7y ago
  > The demand is so high he just rejects work. I think as we advance in the information age, maybe degrees are less about helping you actually get the job done, and more about serving as a mean for companies (and countries) to roughly filter high surplus of candidates. Add the fact its easier today to apply for job posts, its very hard for recruiters to filter intelligently at reasonable time. My guess is if everyone would have first degree, the recruiters will require a second degree. This has less weight on jobs short in candidates (i.e specialized nurse, plumber, welder, proven AI expert, or whatever is hot right now).
  - vasilipupkin 7y ago
    There is a reason there is a shortage of nurses. Not everyone finds excitement in dealing with sick people all day. Also, most highly paid nurses do have a B.S. in Nursing.
    - Nasrudith 7y ago
      Nursing is also a field which is infamously feast or famine for demand and willingness to pay.
- jayd16 7y ago
  >I hired a person to install a garage door. $900 for an hour of work. My plumber wont show up for a 30 minute $300 job. For those prices just do it yourself. Is this hyperbole or did you really pay $900 for an hour job? How complicated could it have been if it only took an hour?
awat 7y ago
Personally I feel like, one one of the variables that isn’t considered in the returns conversation is time. Lots of employers have reimbursement programs that can be used while working up even of you currently work in big retail or corporate food. It will likely take much longer but will leave you in a more controllable financial situation in the interim.
megiddo 7y ago
It's rent-seeking. This outcome was obvious.
jackcosgrove 7y ago
There is a line of thinking that college tuition should rise until the ROI on higher education drops to zero, using some twisted Pareto logic. I would consider such an outcome to be neither optimal nor efficient.
- amiga_500 7y ago
  This is happening with education, healthcare and housing. It's a logical mechanism of near unlimited credit creation to absorb all productivity gains for capture by rentiers.
virmundi 7y ago
Hopefully the US can take a page from the Germans and institute vocational schools. We look down on plumbers, electricians, etc. We constantly couch our praise of them with phrases like, "Wait until your knee gives". I have a MSCS from GA Tech. I've got about 18 years official experience. I get paid $95/hr. Plumbers? $120/hr. Electricians are about the same. We need them. Let's teach them. Maybe with apprenticeships.
- bootlooped 7y ago
  Are plumbers actually working 40 billable hours a week? And how much are they working that is not billable (driving from site to site)? I would be surprised if they made more in a year than educated STEM professionals. The attention-getting per-hour rate might not be a great metric.
  - astura 7y ago
    2018 median pay is $53,910 per year https://www.bls.gov/ooh/construction-and-extraction/mobile/plumbers-pipefitters-and-steamfitters.htm https://www.bls.gov/ooh/construction-and-extraction/mobile/p...
    - war1025 7y ago
      Which, to be clear, is nothing to sneeze at in large parts of the country.
esotericn 7y ago
I would have paid hundreds of thousands for my Physics degree if they'd have loaned me it. The thing is that it makes sense if the degree leads to a dramatically higher income and you actually use the chance. If I'd stayed in my hometown instead of moving to London, it'd still be worth it, but probably to the tune of 100-200K. All of these numbers are probably lower than the benefit I'm likely to derive over my working life but 18 year old me would have risk adjusted. Across the population of course, the balance changes dramatically, because huge numbers of people are terminally skint, working unskilled jobs, etc. Most people probably shouldn't get a degree. Who actually wants to be 'most people' when they're an 18 year old?
mch82 7y ago
The first two paragraphs of page 23. - Usury ceilings eliminated - Costs ballooning In other words, the return on investment is falling because society is taking financial advantage of & reducing investment in young people.
WheelsAtLarge 7y ago
What all these studies always fail to factor is that a college degree will give you an advantage over someone that does not have one in just about any situation. Just the fact that you have one will signal to the potential employer that you can accomplish goals, meet a deadline and the many things you need to deal with to get a degree over those that don't have one. The real question is, "Does an ivy league degree, and those that are very expensive worth it?" I suspect that in most cases it's not. An art degree from Harvard will most likely not pay for itself. But an engineering one from a respected state school will likely have a good return on investment. Bottom line a degree is worth it. But you have to make sure you pick a major that pays off in the end.
- esotericn 7y ago
  I also find the analysis strange because it depends heavily on whether you're profit focused. If you are, then the average outcome probably doesn't matter to you, because you're going to select for profitability in your degree choice, you're going to move around for work, continuously study and train in adult life, and generally you're gonna be fine financially (if perhaps not emotionally, oho). If you're not profit focused - if you're doing the degree primarily and substantially because you love X and want to do X - then what do you care if it doesn't pay back? You got to be an X! The question is almost irrelevant. I think a lot of analysis suffers from this averaging effect whereby actually that average person doesn't exist. There is no realistic path that would have lead to me making the average income for my cohort, for example, because I'm just not that sort of person - I'd rather just go relatively all out, or else work for a non-profit or scrappy startup or whatever, so I either bin high or low.
- mennis16 7y ago
  Harvard (and similar schools) give very generous aid, not to mention that one can easily transition to consulting or similar no matter their major if they came from Harvard. The considerations for Ivy+ schools are not the same as the considerations that are being discussed in this article/thread. The people that are actually ending up screwed with debt went to mid tier (or worse) private schools for the most part, or possibly mediocre out of state public options.
PaulDavisThe1st 7y ago
Hint to paper writers: you can put your figures inline instead of all at the end. What a dismal reading experience, skimming from pages of text to the end to see what the cited figure(s) actually show, then back to the text again. Who sanctions this sort of thing?
- smnrchrds 7y ago
  For digital publishing, sure. In academic publishing, for print, or if the same file is used for both digital and print copies, colour pages are often clustered together to reduce the production cost. If you have 20 pages of mostly black and white text each with a small colour figure, you have to print 20 colour pages. If you cluster them together, you can print 18 black and white pages and 2 colour pages instead. This practice will go away as all publishing moves to digital formats. But as long as there is a print version for purchase as well, it will be more cost-efficient to organize papers like this.
kucing 7y ago
Coming from a small town in Indonesia, went to Singapore to study. Will end up with about 30k SGD (~22k USD) in student loan. Fresh graduate pay for software engineering in Singapore ranges mostly from 60-100k. I think the decision worth it* because it opens up horizon, opportunities to working overseas (not just Singapore) and much better living standard. I didn't even know what a CS degree will do after graduation and just randomly chose it because I like Math back in HS. I guess the real benefit of a degree is the pointers and community you get. Surely this can be replaced with a good mentorship, but that requires a good network beforehand. *the quality of education in Singapore University IMHO is far from the quality of the content I found in the publicly shared course content in US universities.
motohagiography 7y ago
College isn't worth it, but that's the whole point. It's becoming what economists call a Giffen Good, that is, something people consume even more of the more expensive it becomes. The biggest value factor of all is Metcalfe's Law of network effects, where the almost universal availability of higher education means that not pursuing it places your starting position in life on the outer long tail of the success curve. Not going to college is like being a business that decided to just never bother getting on the internet, or a person who doesn't know how to drive. Unless you move to some isolated backwater that isn't subject to the network or are some kind of extreme outlier, you are at a huge disadvantage. Notable that these articles about the doubtful value of a university degree are written exclusively by people who have one. The wider availability of education (via cheap debt) and downward mobility means a degree (all things equal) is no longer as distinguishing and does not have the same impact on life outcomes as it once might have. Even previously, the people who went to college had such a huge social head start anyway, it would be difficult to control for education as the determining factor in success. University is starting to resemble a "radical monopoly," (Ivan Illich, summarized here: https://twitter.com/fietsprofessor/status/1122073725862600705 https://twitter.com/fietsprofessor/status/112207372586260070...) where there is nothing discretionary about it. Outside of STEM, I'd argue modern colleges offer students very little more than a tribal affiliation, which is the elephant in the room for articles like these. If you told kids why they need to go to college, it would devalue the degree even further as they re-tribalized around other rites of passage. This doesn't mean don't go to college, it means do absolutely everything in your power to graduate college, because the arbitrary biases and disadvantages of the alternative defy all reason and make anyone with an IQ above 90 insane. When you look at college as a Giffen Good, which people need for participation in a radical monopoly over the labour market, created by a network effect from its debt fueled availability, of course it seems like a college education is not worth it - but it's only ever not worth it to people who already have one. I'd like a mainstream platform to write that view and put these "is college worth it?" navel gazer articles to rest. If only there were an institution to affiliate with...
- floe 7y ago
  > Notable that these articles about the doubtful value of a university degree are written exclusively by people who have one. Why is it notable?
Animats 7y ago
"The rate of underemployment—working in a job that does not require a college degree—was 42.5 percent among recent graduates." Wow. That, plus debt, is a huge hit. The big item that analysis doesn't consider is the commonality of college education. "Between 2000 and 2018, the percentage of people 25 years and older who had completed a bachelor's degree or higher increased by 9 percentage points, from 25.6 percent to 35.0 percent." - Census Bureau[1]. That's for the entire population, so it lags changes for young people. How did the St. Louis Fed miss that? [1] https://www.census.gov/library/stories/2019/02/number-of-people-with-masters-and-phd-degrees-double-since-2000.html https://www.census.gov/library/stories/2019/02/number-of-peo...
obilecantrem 7y ago
I have a degree from a state school in chemistry, it's been worth it for me. In part because the GI Bill paid for it, but it also landed me several jobs writing software where domain knowledge is required and not so easy to come by without formal education.
anewguy9000 7y ago
just want to add something that seems missing from much of the discussion of higher education; consider the question rephrased as, "is it worth learning to learn?" higher ed is not just job training. its exposure to ideas, opinions, people, and energy in an environment explicitly not tied to a profit motive. it should be cheaper, and more accessible, but..

247 points by SQL2219 7y ago

> Combined with a continuing surge in the number of new college graduates entering the labor market, this resulted in stagnating wages in those jobs along with a “cascade” of college graduates into lower-skill jobs. These underemployed college graduates, in turn, pushed some low-skilled workers out of the job market altogether. Right ... yet, believe this paper when it says that those pushed-out-of-the-job-market low-skilled workers with no college degrees are not any worse off.

blondin 7y ago

college provides such access to knowledge not available anywhere else (not legally to my knowledge). any progress is most likely to come from academia first due to that concentration of knowledge. so if we are truly heading towards a collegeless future, i am hoping that anyone who can contribute to research can get access to that knowledge. money is a major concern, but if we can't make progress then we have a bigger issue.

crimsonalucard 7y ago
The internet changes this in a major way. However, colleges force students to learn what experts deem as important. This is very important as students tend to want to learn what's interesting over what's fundamental and important. In my mind, university is ALWAYS better then no university, the actual thing that puts this in question is... is the cost worth it?

kerkeslager 7y ago

One thing I don't see talked about a lot is the risk involved in going to college. All the frequently-cited studies about college look at the incomes of college graduates versus the incomes of non-college graduates, and then compare that to the cost of education, and that generally looks fairly positive. But of students who enroll in 4-year programs, only 60% graduate within 6 years[1]. For these students, college has actively harmed them: they're saddled with crippling debt, but don't get the benefits of a college degree. Also consider that they aren't working as many hours, if any, during college, so they lose even more in wages they could have earned. The EV if starting and finishing college is coming into question, but the EV of starting college is clearly negative if you have only a 60% chance of finishing. [1] https://nces.ed.gov/fastfacts/display.asp?id=40 https://nces.ed.gov/fastfacts/display.asp?id=40

asutekku 7y ago
Or they got a job before graduating. Tech companies actively hire people from universities, those 40% are not inherently negative.
- kerkeslager 7y ago
  If we're talking anecdotal experience, I'm one of the people who you're talking about, and if I could go back in time, I'd a) not have done any internships and b) not have quit college. But let's not discuss anecdotes, because that's not how policy should be determined. Let's keep the focus on data. What you're describing happens, but it's enough of an outlier that it doesn't tip the median outcomes to the positive. People with some college but no degree still have above-median unemployment and below-median earnings. In fact an associates degree only gets you below-median unemployment: it still doesn't allow you to reach median earnings.
austenallred 7y ago
Bingo
kevindong 7y ago
The 6 year graduation heavily differs based upon selectivity of the university in question. From one of the related tables linked in your source [0]: > Graduating within 6 years after start, males and female > 2011 starting cohort: 60.4% > Open admissions: 30.7% > >=90% accepted: 42.3% > 75-89.9% accepted: 57.8% > 50-74.9% accepted: 62.0% > 25-49.9% accepted: 70.3% > <25% accepted: 86.9% [0]: https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.asp https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.a...
- kerkeslager 7y ago
  Yes, this is one of the problems: many schools are letting in students who are unlikely to succeed without extra help, and not providing that help. Many students who enter college lack the prerequisite knowledge to complete even introductory college classes, and are placed in remedial classes. These classes don't count for college credit, but cost the same as college classes there's a limited pool of financial aid available to a student, and typically this pool is smaller for remedial students, who are less likely to qualify for merit-based aid. The results are devastating: only 9.5% of remedial students graduate from two year programs within three years, and only 35.1% of remedial students graduate from four year programs within six years. [1] https://postsecondary.gatesfoundation.org/remedial/ https://postsecondary.gatesfoundation.org/remedial/

dahart 7y ago

> we find that controlling for the education of one’s parents reduces our estimates of college and postgraduate income and wealth premiums by 8 to 18 percent. Controlling also for measures of a respondent’s financial acumen—which may be partly innate—, our estimates of the value added by college and a postgraduate degree fall by 30 to 60 percent. Taken together, our results suggest that college and post-graduate education may be failing some recent graduates as a financial investment There is no doubt in my mind that someone’s parents’ status and education, and someone’s financial acumen, are both leading to higher incomes and wealth. Why does it make sense to “control” for these things? Doesn’t this lead to a distorted view, where large real differences in income between two people are factored away? Sure, financial acumen might be partly innate, or correlated with IQ or family status, but some people surely gain financial acumen precisely by going to college? Sure, parent’s education is a great predictor or ‘own education’, but does that really imply the alternative- that when the professor’s kid is a high school dropout that the kid is better off than other dropouts? Is that supported by the data? Maybe yes, because daddy prof has more money to support his kid, but what happens with the dropout’s kids and future generations? I’m not arguing that the premium isn’t going down, it’s true that tuition is out of control, but I’m not sure I understand how the methodology here isn’t painting a starker picture than reality. Discounting 50% for ‘acumen’ is a huge influence on the numbers, and when you don’t discount for parents and acumen, the reality is that people with college degrees are earning a lot more actual money.

tardo99 7y ago

It's funny to me that people can immediately see the issue with falling returns here as prices increase, but can't see the same thing when it applies to the stock market. In the stock market, the prevailing wisdom is "buy and hold no matter what the price is, because you can't time/game the market." Why doesn't the same logic apply to college? Shouldn't the efficient market cause college costs to rise to the appropriate level? Given that, shouldn't you just do it and ignore the cost?

hurricanetc 7y ago

Three words. Income Sharing Agreement. Banks and insurance agencies have already calculated what a degree at a particular college is worth. People just tend to get really butt hurt when they see that a degree in Tuba Performance from NYU is not valuable.

thrwaway69 7y ago

Regardless of any opinions on either side, I don't understand why we have made degree a social prestige? Someone in the comments said degree values will degrade and they are probably right as it happened with lower education as more and more people got in. Maybe there are lack of jobs or companies are exploiting people by making them grind more in an artificial constraint environment or some people are hogging off the resources and causing major inequality in pay gaps? I have no doubt education is valuable and so is experience but why does that have to compress or translate into a paper? Should we really be running on an old feudal model of producing workers in 2020? I have a lot of questions. I dropped out of school recently due to the toxic culture degrading my health to the point I am severely antisocial and definitely depressed enough for no reason. The competitive grind is worse in countries with overpopulation and the quality is just outrageous. I just wanted to work on something cool, become a surgeon but that route was sealed at 10. No money, no family prospects, grinding is too difficult and being a drug addict and die young seems a better option if you had a non functional childhood due to the whole burden later on. I thought life would improve with vast improvements in productivity and industrial revolution but what we got in the end seems to be mostly cosmetic for the past 20 years. Yes, having the ability to order food or communicate is nice but that was doable before too. Taxi on demand? Well, we had numbers before (even though I was born in 00s), my dad has stories of it. Fancy animated avatar on social platforms seems cosmetic. What else really changed in life quality?

LessDmesg 7y ago

When signing up for my current job, I didn't even bother bringing them my master's degree. Too bad because it's from one of top two tech unis in the country. Not to downplay the benefits of higher education, but it's certainly not a prereq for good employment these days.

t34543 7y ago

I work in software and I’m a high school dropout. I’ve never even been asked if I have a degree, I just leave that field blank.

anovikov 7y ago

I'd offer a much simpler explanation: education is mostly a competitive tool, when more people have it, it's value naturally declines right? As fraction of population with a college degree increased from about 4% in 1940 to about 30% today, obviously advantage offered by it, declined. And went to essentially zero if measured by wealth because wealth is something only top of population pyramid has, in general: fewer than 30%.

keiferski 7y ago

A proper title would be Is College Still Worth It [Financially]? Evaluating an education purely on economic terms is the wrong move to make, but unfortunately an increasingly common one.

mooreds 7y ago
What other terms should be included? I can think of a few: * Life experience * Knowledge gained * Friends made But what would you add?
- emodendroket 7y ago
  I think there is a societal benefit to the average person having more education. If we're being honest, many jobs don't even require a high school education.
- keiferski 7y ago
  Those three categories are pretty broad and essentially cover everything, but my own personal addition would be: becoming aware of "unknown unknowns". A proper university education exposes you to knowledge and worldviews that you previously had no idea even existed. This is the fundamental problem with self-education: you tend to get stuck in local loops based on your current interests, motivations and knowledge. Sure, the information is out there, but without a proper introduction by an expert, real-world peers learning the same material, and the overarching school structure, it may as well be written in hieroglyphics. External education, when properly designed, should broaden the mind and prepare it for self-education, but without it, you often end up with a fairly limited view of the world shaped by whatever you personally find interesting.
  - paganel 7y ago
    Agree with the unknown-unknowns, the problem is (at least from my pov) that University nowadays mostly familiarizes you with unknown-unknowns that are kind of boring, i.e. stuff that will potentially bring you (the University atendee) financial and societal returns further down the road (I get why they do that, I’m not criticizing them for it, just exposing what I think happens). Again, from my pov most of the interesting and not-boring stuff that can be studied does not have that many financial or societal benefits further down the road, and as such self-education seems one of the few ways of gaining knowledge about that stuff.

mooreds 7y ago

I have some kids and college is about a decade away for them, so this is pretty timely. I remember reading a post in the 2000s about whether the internet (or, more precisely, some application built on the internet) would do the same thing to colleges as Craigslist did to the newspapers. Peel off the valuable bits and by doing so disaggregate and destroy/heavily damage the institution. Still waiting for this to happen, but maybe lambda school and bootcamps are the start. I expect credentialing of schools and the longer engagement with colleges to make the transition longer. Bit I don't see how colleges avoid being unbundled.

emodendroket 7y ago
I have a degree, but not in CS, and after seven years in the industry I still occasionally come across recruiters who treat me like I must have no idea what I'm doing, or interviewers acting like I must be a genius for solving easy problems. It's got to be worse if you have no degree at all. I'd tread carefully.
- non-entity 7y ago
  When my coworker discovered the other week that I didn't have a degree, he straight up told me a couple of years ago, the company wouldnt have even thought about hiring me.

dustinmoris 7y ago

Disclaimer: I don't have a degree and I've had a very successful career as software engineer so far. I think the concept of university is mostly a time waste and the reasons for it is: - University is the concept of someone teaching you a topic and then you being able to claim you are qualified in this topic. However, people nowadays need to train themselves in complete new fields multiple times in their lifetime and therefore we already have to teach ourselvs new things all the time and be able to proof that we are qualified in something without a university degree. So why a degree in the first place? - Before we had the internet, digital books, online training courses and other learning materials at our fingertips one had to go to a different physical location packed with other students and learn a subject at a slower pace so that everyone could equally follow the topic. Today this is a waste of time. If one has access to all the learning materials themselves, then they can consume it at their own pace, possibly learn a 3 year course in a single year. Why slow yourself down unnecessarily? - Experience > degree. After the first 2-4 years of work experience nobody cares anymore about your initial degree, unless it's medicine or law. Once you've worked, people are interested in your actual ability to deliver and after 2-4 years there's enough data to convince someone how good you are. - The more people have a degree, the less it's something which makes you stand out. I believe that being different is the best way to stand out from a crowded and competitive market, no matter how. Basically you want to be part of the minority. If nobody has a degree, you want to have a degree, if everybody has a degree, then you don't. People like to see something special in other people, if you can convince them that you know something without going through a lengthy programm like everybody else, then people will think you are smarter or something like that (even if it's not true). This only works though if your in the minority. It's the same pshycology which allows one person to charge 300% more than competitors and having the largest share of customers, because they think that there's something inherently better about it. - In many countries attending university means creating debt. There's good debt and there's bad debt. If I take credit to buy a property which has very high and real chances of drastically increasing in value, then it's good debt, but if I take credit in order to learn something which I can learn myself and which after 2-4 years won't even matter anymore, then it's possible very bad debt. I know someone who paid 150k for an MBA at a business school and I think the money was wasted. If you pay 150k on an MBA in business, then clearly the course material will be entirely wasted on you. 150k is good money that could have been spent so much better in other areas, like buying property and then see the value grow whilst receiving passive income through rent or investing in an actual business which you want to create after the MBA.

lordnacho 7y ago

College seems to be a thing to get done quickly, and cheaply. Probably even with the easiest courses. Why do I say that? - The more time you spend, the more time you're not working and making money/experience. You're also in a quite restricted social group with only the professors providing contact with older, more experienced people. - There really is nothing you can learn in college that isn't public knowledge. At best you get a better idea of what the experts think is important in a field. So for instance I didn't read Marxist or Austrian economics. - Nobody is going to know whether you did that advanced course on category theory for coders. I'm sure it's both interesting and relevant, but you have more time to learn this yourself, when you're not being judged by an exam. - You'll also learn things better when you're not constantly thinking about proving it on an exam. - Everything is college is really an intro. A really evil one where you're asked to fly over some field and then get asked some very specific questions when it comes to exam time. - Of course there are things that really are work relevant at college, especially programming related stuff. It's hard to know what they are as a novice, but looking at it now it seems anything where you're in the practice of using a repo and iterating a solution is what you're after, or using common tools like git or tmux (there's a lot). That can occur in many types of courses though, whether it's systems or human interface and so on. Since there's a lot of Americans here, and I have some experience of that system, I'd say go to Europe. Or the UK, if you like keeping it in English. In Europe, most of the courses are very specific and short. I got a Masters degree 4 years after high school, and I wasn't even at uni for most of the year (3x8 weeks a year), so in theory it could have all been done in 2 years. Which puts into perspective how much you're actually learning there.

daodedickinson 7y ago

Degree never helped me for shit. Someone rescue me...

bitxbit 7y ago

The last time I looked at this data (lifetime earnings) the difference was close to $1M on average for men and substantially lower for women. The opportunity cost of going to college is about 1/5 of that difference if you pay up front but substantially more if you take out loans. Here’s another thought that’s not discussed in any of the studies: what’s the impact of someone attending college later in life? Say in late 20s? I’d argue that the degree has greater impact on remaining future income under that scenario.

fxtentacle 7y ago

I wonder if HN is a good place to discuss this, because we have a pretty niche group of ppl here. A big chunk of the HN crowd seems to be self-taught highly intelligent and highly motivated young guys who as a result became astronomically good in their craft. For those people, potential employers will go out of their way and bend their own corporate hiring rules to get the no-degree candidate past HR. And then there's the normal people working normal jobs. For those, not having a degree will immediately disqualify them from 50%+ of the available job openings. But this crowd is only marginally represented on HN. Since it's like the last thing where young people need to be disciplined, I'm sure many companies will treat a degree more like a proof that you're reliable enough than like the additional education that it was supposed to be. That also explains why "degree" has become a HR checkbox where nobody cares about the specific skills that you supposedly learned. So the correct question is: How do you prove your reliability (by getting a degree) in the cheapest way possible? As for grad school, that's really only for people who are idealistic and value research higher than job security or having enough money to feed a family.

wojcikstefan 7y ago
You seem to make a lot of assumptions about people who do and do not visit/participate on HN. Is it based on a feeling or is there some data available on that topic?
- kortilla 7y ago
  Ignore the assumption. The question remains valid. If the assumption is wrong there are more people to answer it.
- TheGallopedHigh 7y ago
  Sometimes data is not the only thing you need. Example: the statistical significance of a parachute to avoid death or trauma when jumping from a plane. “Conclusions: parachute use did not death or major trauma when jumping from a plane...” https://www.bmj.com/content/bmj/363/bmj.k5094.full.pdf https://www.bmj.com/content/bmj/363/bmj.k5094.full.pdf

throwno 7y ago

If trades make so much money, how come no one is bitching about fatcat plumbers and roofers? Why hasn't the NY Times published any articles about how "Big Plumbing is soaking the middle class" etc.? For all the ways the middle class is getting hammered, I have yet to see one book about how plumbers are killing the middle class like I have with doctors, lawyers, techbros, and bankers. Until a journalist from NY Times or Bloomberg writes a book about how the decline of the American middle class is due to a plumbing conspiracy, you're just not bourgeois. Sorry.

i_am_proteus 7y ago
Because the value a roofer adds is obvious and the value an attorney adds is questionable.
throwaway100773 7y ago
The issue is that trades don’t scale like all of the things you mention. Even if you own a very successful plumbing company, your ability to scale is constrained by geography, labor costs and finding people you can trust to manage your company. Not to mention, there are market forces working against the plumber trying to scale, and the plumber’s ability to affect policy is proportional to the ability to scale. Anecdotally, plumbers charge more per hour in some cases than many lawyers make. Their income, however, is limited by their ability to book many jobs and actually carry them out. The opportunity cost of one job is exactly another job. So comparing to other wage earners their income is high, but compared to a banker that can make several loans in the course of a day where the opportunity cost is only capital (which they have practically unlimited access to being that theyre a banker) changes the situation quite drastically.
- chrisseaton 7y ago
  > The issue is that trades don’t scale like all of the things you mention. The UK famously has a plumber worth $100 million - Charlie Mullins.
  - throwaway100773 7y ago

brownbat 7y ago

This is a really interesting addition to the literature if you dig through it, with subtle distinctions between income gains and wealth gains and interactions with demographics. It's not a simple "college ain't what it used to be" story. The biggest puzzle is how to explain why recent grads still command significantly higher incomes than nongrads without accumulating significantly more wealth. Increasing tuition is a factor, as is the declining return on capital gains over successive generations. Limited financial literacy and predatory lending seem to be hurting recent grads too. Most notably, the inability to discharge school debt in bankruptcy since 2005 may have had strong effects. That last legal change remains bewildering to me. You have three parties: schools, financial institutions, and teenagers. So uneducated teenagers are expected to know whether or not their choice in school, degree, expenses, and personal background will make their education worth it? When the other parties have all the data and experience? And if it turns out everybody was wrong, the now barely-employed twenty-something is least prepared to absorb the burden. More importantly, the least susceptible to incentives to improve this endemic situation for other future students. It creates a moral hazard which drives schools to overprice courses of education that are higher risk, and removes any incentive for lenders to educate borrowers on expected returns from different choices. Policy circles are hotly debating right now how to overhaul the entire system. Maybe we should acknowledge the policy changes that helped break everything in the first place, and reverse those as soon as possible.

macspoofing 7y ago
>Policy circles are hotly debating right now how to overhaul the entire system. No guaranteed federal loans would fix everything. This means tuition loans could then be discharged and the lender would be more discerning about loaning to a student heading to some boutique private college with sky-high tuition and ending up with a humanities degree.
- Retric 7y ago
  Discharable loans would also increase interest rates by about 2%. That’s 100$ a month for 60k worth of loans, which makes them even harder to pay back.

jakobmi 7y ago

Why not study at a top German university instead? It's 100% free and you get a ton of international experience, learn a new language, and can still go to MIT/Harvard/Stanford/... for your master's or thesis

WomanCanCode 7y ago

College degree is only worth for high income positions like surgeon, medical degree, nursing and some engineering field (chemical?). It's just not useful for middle class income like teaching etc. But good luck in trying to get an interview without any kind of diploma. They will think something is wrong you.

grumple 7y ago

Wasn't worth it in the US when I went (graduated 10 years ago). If I could go back in time, I'd tell myself to go right into industry.

NPMaxwell 7y ago

This paper argues implicitly for getting a college education. Reason is that very few people would be able to understand this paper before getting a college education. Many Americans may graduate college without being able to understand this paper. For those who do graduate able to understand the paper, I'm sure college increased their earning power and wealth.

mattbillenstein 7y ago

I made a very simple one spreadsheet model just yesterday after talking about this with a friend: https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7m3EWB7v4Hguj8bVVws62Ym8/edit?usp=sharing https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7... Every student should do a cost/benefit analysis of what a degree from a given institution will be worth to them - too many students fall into massive debt they can never pay back.

anjel 7y ago

Higher learning was is and will always be "worth it." Knowledge is good. Bloatful College administrations not nearly as much. Funny how no one ever studies their utility/cost returns.

drallison 7y ago

Acquiring the "college income premium" is not the reason for going to college. College and universities allow students relatively unfettered exploration of ideas and social interactions. While some of us manage to do that without the umbrella of academia, most of us fare better at a college. Moreover, colleges and universities (especially the great research universities) provide a way to push back the boundaries of human knowledge and transfer concepts and technology to a new generation. College is where you meet friends and lovers.

ryanmercer 7y ago

I don't have a degree and am constantly told in rejections by potential employers, and my own employer when applying for advancement, that they are looking for degree holders. Many job listings also flat out state a 4-year degree is a minimum. A degree would absolutely, positively, beyond any shadow of a doubt improve my chances of increasing my income. At my current job only about 7%. But the tens of thousands of dollars of debt I'd have to take on to get that degree at 4.5-7% interest (or higher)... yeah thanks but no thanks. So, anecdotally at least, I can agree that there are pretty diminishing returns to getting a degree. While I'd be all but guaranteed to increase my income, I'd be paying out more though: a 20k 10-year loan at 6.8% (finaid.org suggested this %) interest means I'm paying 27,619.31 a 40k 10-year loan at 6.8% interest means I'm paying 55,238.63 At my current income the 20k loan, bumping up one position and considering our raises inside a position are limited to less than 3.5% annually based on a rather arbitrary 'merit review'. It would be 7-10 years of my increased pay just to cover the loan, assuming no taxes were taken on the increase but also factoring in insurance increases. That means in 14 years I could start keeping more money from that 4 year degree if I could manage a 20k$ degree. Ha!

esotericn 7y ago
Aren't you contradicting yourself somewhat here? The alternate universe version of you wouldn't have the same job - as you say in paragraph 1 you'd work somewhere else. People on here earn top percentile salaries which warp the calculus, myself included, but $50K is approximately one year of the UK median income (I imagine the US figure is similar). I'd be worried about making back hundreds of thousands in a low paid field. But a 50K degree in a well paid field is a no brainer to me. Earnings increases are cumulative. I'm almost certainly 200% over what I'd have without my undergrad, and not just due to the piece of paper.
- incone123 7y ago
  UK median income in 2018 was GBP 28,400 which is at today's rate about USD 36,600. I don't see why you made the comparison though? The person deciding to start a 4 year degree can't assume they personally have an opportunity cost of 4*annual median earnings.

throwawayjava 7y ago

Their familial controls don't make much sense to me. An actuary's kid will have an easier time becoming an actuary. Same for lawyers and doctors. That doesn't mean that college is a non causal factor in those students lifetime earnings... Quite the opposite. You're not becoming any of those things without college. The student went to college precisely because they understand viscerally and precisely how college sets them up for a life of higher than average earnings. And what they need to do at college to tap into that potential. Similarly, I'm not sure I believe the claim that there's no obvious causal link between education and financial acumen. The big difference seems to be "do you know WHY you are at college?" And in cases where the answer is yes, it's still a good choice.

mlyle 7y ago
> Their familial controls don't make much sense to me. There's a lot of recent evidence that, all else being equal (controlling for educational attainment, test scores, and grades) parental income/social class has a huge impact on income. That is, if you come from a lower social class, you can expect a lower income increase from college than someone coming from a higher social class. There's significant policy implications here-- our long-standing goal of getting lower income kids to take college loans and go to college may not have a positive expected return for them.
- vasilipupkin 7y ago
  no, that’s completely wrong. You are confusing averages and conditional probabilities. On average, those from higher classes may do better - that doesn’t mean that a kid from s lower social class should take that as guidance. It means we should try to erase or lessen differences of opportunities between classes. Some of these differences are probably innate. A brain surgeon is likely smart and his kids are probably also smart. Some, but most are due to informational deficiencies and networking effects.
  - mlyle 7y ago
    > no, that’s completely wrong. You are confusing averages and conditional probabilities. On average, those from higher classes may do better - that doesn’t mean that a kid from s lower social class should take that as guidance. ??? You're saying that someone should not consider the outcome distribution of people similarly situated to themselves when making a choice? Isn't that completely rejecting empiricism? If, from a public policy standpoint, our effort has been to get to the poor to college to end poverty; and the educated poor do do better with education, but not nearly as well as their middle-class cohort; and the present-value of education is smaller than the present-value of their lifetime wage increases-- one has to question whether the policy is well informed. If you're asserting that the picture is unduly distorted by those at the very highest spread of the income distribution-- you're right. But the effect is still when we look at median outcomes. > Some of these differences are probably innate. A brain surgeon is likely smart and his kids are probably also smart. Presumably we'd be able to measure this and control for this. > Some, but most are due to informational deficiencies and networking effects. Yes, and various kinds of cultural cues about class of upbringing that persist after education and act to limit opportunity.

tamaharbor 7y ago

If 'free college' becomes the norm, it will become as valuable as what you paid for it - nothing.

cm2012 7y ago

I can't find the citation now but the biggest argument against college I've seen is that once you control for family income, life success is way more correlated to SAT scores/the college's you apply for than the ones you actually attend. This would imply that college success stats merely indicate that they are selective in who they choose to enroll. EDIT: Its not the one I'm looking for, but I found a good one. http://conference.iza.org/conference_files/CoNoCoSk2011/gensowski_m6556.pdf http://conference.iza.org/conference_files/CoNoCoSk2011/gens... shows that if you control for IQ, the average person makes $100k more over the course of their whole working life by getting a bachelor's. - This doesn't even account for the four years of work you lose by going to college instead of working. - Its based on data from people who mostly graduated before the year 2000, and by all accounts the value of college is becoming less, not more. It's also based on a calculation when college was much cheaper.

dahart 7y ago
IQ correllates somewhat with income and even more with school performance, so by “controlling for IQ”, the authors are intentionally flattening and hiding some of the income variation. They’re effectively discounting for the probability of going to college in the first place. That will, of course, hide differences in income due to going to college. The actual data shown in that reference seems to tell a different story, it shows people with college degrees earning 20-50k per year, on average, after taxes. That will sum to more than $100k over a lifetime.
- cm2012 7y ago
  They account for that plus a lot of other factors in the 100k number. Basically the conclusion is, for people born from 1920 to 1980, college was net value add accounting for everything else, but not a huge one.
  - dahart 7y ago
    Yes, I know they account for that. Why does that make sense to account for IQ? That is explicitly discounting for college! The 100k number is a fictional number, it’s trying to answer the question of assuming the same person didn’t go to college, is it possible to calculate the true value of college. We could argue whether they actually calculated that number correctly, but what is absolutely true -- my point -- is that the actual people who had actual degrees actually earned a lot more than 100k extra over their lives, on average. The differences in wealth, illustrated by the data in that paper (see figure 1), are 2x-3x in annual income and accumulated savings much higher than 100k.

seem_2211 7y ago

I have a degree from a no-name university in New Zealand. I'd do it again for a few pragmatic reasons. 1: Lots of companies will reject you on sight without a degree. I don't think it's a good thing, but it is reality. 2: With a degree your ability to move overseas dramatically improves. I moved to America after graduating. I flat out couldn't have done that without a degree. Points based systems immigration systems like New Zealand have dramatic bonuses for people with degrees. 3: You don't have to jump through the hoops and explain why you don't have a degree all the time. Stupid reason I know, but it's something I've seen friends without degrees have to do constantly - and not just in career situations. As I mentioned, I went to a no-name university. If you live in NZ, you'll know it. If you're an American, chances are, you've never heard of it. But because I have a degree, it doesn't ever really come up. 4: The cost isn't that bad, when you spread it out over a career. My degree & living costs cost about $60k NZD (~$40k USD). That's $1k USD / year, or $.50 per hour. Considering how my income has multiplied in the few years since I've graduated (SF wages help tremendously here), the actual cost is barely anything, even when you control for the opportunity cost of studying. Where I think College returns make a lot less sense • Paying out of state tuition for lifestyle reasons, when you're going into a relatively low paid field afterwards (e.g. teaching). • Paying private school tuition at a school without a strong reputation • Grad school, in general, seems to be a rip off

jhoechtl 7y ago
What you are portraing is your exploitation of your countries education system for your own benefit. The NZ tax payer invested in yours for your future ROI into NZ and you put this ROI in your sack.
- barry-cotter 7y ago
  The possibility of migrating to richer countries causes greater investment in education. https://appam.confex.com/appam/2018/webprogram/Paper27374.html https://appam.confex.com/appam/2018/webprogram/Paper27374.ht... > Using a new administrative dataset combining the universe of permanent migrant departures from the Philippines with the universe of institution-level post-secondary enrollment and graduation, we show that enrollment and graduation in nursing programs increased in response to demand from abroad for nurses. The supply of nursing programs increased to accommodate this. The increase in nursing enrollment and graduation during the period was much larger than the increase in nurse migration and contributed to a brain gain

JMTQp8lwXL 7y ago

One of the costs that is often excluded, if you go the "not college" route, is the toll of physical labor on one's body. Medical expenses can be substantial and you didn't earn as much as an office job may have paid.

monoideism 7y ago
> One of the costs that is often excluded, if you go the "not college" route, is the toll of physical labor on one's body That's why, for people interested in technology, software development is an incredible blessing. If you're clever about it, and plan ahead in HS, you can easily skip college and come out making $100,000/yr within 3-4 years, even in small markets. I've never taken a single computer science class, make well over $100,000 in a highly-challenging software development job, and no one has ever asked me about a college degree (with the exception of one job that I regretted accepted and which I quit in 8 months). There are other similar routes available to people without college degrees. Several wealthy people my parents know started out in construction, but rapidly moved into flipping houses and real estate, and made a fortune. Their physical labor was over by their late 20s. There are many paths that skip college and don't end up working physical labor after a decade or two. But you have to be clever and proactive (if you're on HN, I'm going to assume you're at least the former).
- cm2012 7y ago
  Same for marketing. College degrees in marketing are useless. Real work experience can get you pretty good jobs much quicker

50 7y ago

Look, I'm studying undergraduate philosophy with no intention other than why not. Would I say I could learn the material on my own w/o college? Absolutely but I like the organized structure of college w/ professors, peers, etc. Am I getting into debt? A fair bit. Is it worth the trade off? I certainly think so. Will I say that five years from now? Most likely. Because here's the thing: education as a means to an end is not what it's all about, and so many of us subscribe to this fiction―to this warm stupor of society's fictions―that we forget what it is truly about. College will always be worth it such that you have an endless curiosity or enjoy erring in the direction of learning which is deeply rooted into failing, or rather, not understanding, over and over again.

monoideism 7y ago
> Look, I'm studying undergrad philosophy...Am I getting into debt? A fair bit.. Is it worth the trade off? I certainly think so. Will I say that five years after I graduate? Not sure but most likely. Spoiler. Been there, done that. Unless you're at an Ivy, if you're majoring in philosophy, you'll not think it was worth it in five years. My sin was Classics, but similar outcome. Assuming you're on HN because you're teaching yourself programming, the sting will be somewhat lessened (that's the route I took), since you'll at least be able to get a job. But it'll still sting to make those massive loan payments knowing that nothing you learned is helping you with your professional life, and that things like philosophy, mathematics, and languages (and computer science!) can be learned just as easily with discipline, YouTube, and a few good textbooks. It's very easy to delay the pain of loan payments when you're in school, but they'll be there waiting for you, inevitably, through sickness and health, marriage and divorce. If you have endless curiosity, college is even less worth it. Instead, being loan-free gives you the freedom to work in areas that truly intrigue you, and to work in very low-paying internships while you're learning. But I know I won't convince you. Likely no one could have convinced me at the time (although only one person tried, once). Edit: if this were the 1970s or earlier, when you could pay for college classes from waiting tables or a $10,000 loan (inflation adjusted!), I'd absolutely say go for it. But taking out even $50,000 in debt at age 18 for anything less than a guaranteed job with a good income (physician assistant, nursing, accounting) is mortgaging your future. Taking out $200,000, which is the going rate for most [edit: should read "many, private", and is probably closer to $100,000] liberal arts 4-year-degrees, is insanity, but between culture BS about degrees and "academic counselors", I know it may not seem that way to you right now.

ransom1538 7y ago

A person in our family is a specialized nurse. Two years of school, then some more training. $60hr any hour they "wish" to work. Saturdays/Sundays are $90hr, so is any hour after 8 hours. The demand is so high he just rejects work. If he wants to work in American Samoa or Miami: hired. I hired a person to install a garage door. $900 for an hour of work. My plumber wont show up for a 30 minute $300 job. I will call again, tomorrow fingers crossed. Get your brakes replaced - look at that bill. Try outsourcing that. Everyone I meet that works at starbucks has a masters AND 90k in student debt. Bankruptcy doesn't make student loans go away. I think things are about to start swinging in the "non-college" direction.

anoplus 7y ago
> The demand is so high he just rejects work. I think as we advance in the information age, maybe degrees are less about helping you actually get the job done, and more about serving as a mean for companies (and countries) to roughly filter high surplus of candidates. Add the fact its easier today to apply for job posts, its very hard for recruiters to filter intelligently at reasonable time. My guess is if everyone would have first degree, the recruiters will require a second degree. This has less weight on jobs short in candidates (i.e specialized nurse, plumber, welder, proven AI expert, or whatever is hot right now).
- vasilipupkin 7y ago
  There is a reason there is a shortage of nurses. Not everyone finds excitement in dealing with sick people all day. Also, most highly paid nurses do have a B.S. in Nursing.
  - Nasrudith 7y ago
    Nursing is also a field which is infamously feast or famine for demand and willingness to pay.
jayd16 7y ago
>I hired a person to install a garage door. $900 for an hour of work. My plumber wont show up for a 30 minute $300 job. For those prices just do it yourself. Is this hyperbole or did you really pay $900 for an hour job? How complicated could it have been if it only took an hour?

awat 7y ago

Personally I feel like, one one of the variables that isn’t considered in the returns conversation is time. Lots of employers have reimbursement programs that can be used while working up even of you currently work in big retail or corporate food. It will likely take much longer but will leave you in a more controllable financial situation in the interim.

megiddo 7y ago

It's rent-seeking. This outcome was obvious.

jackcosgrove 7y ago

There is a line of thinking that college tuition should rise until the ROI on higher education drops to zero, using some twisted Pareto logic. I would consider such an outcome to be neither optimal nor efficient.

amiga_500 7y ago
This is happening with education, healthcare and housing. It's a logical mechanism of near unlimited credit creation to absorb all productivity gains for capture by rentiers.

virmundi 7y ago

Hopefully the US can take a page from the Germans and institute vocational schools. We look down on plumbers, electricians, etc. We constantly couch our praise of them with phrases like, "Wait until your knee gives". I have a MSCS from GA Tech. I've got about 18 years official experience. I get paid $95/hr. Plumbers? $120/hr. Electricians are about the same. We need them. Let's teach them. Maybe with apprenticeships.

bootlooped 7y ago
Are plumbers actually working 40 billable hours a week? And how much are they working that is not billable (driving from site to site)? I would be surprised if they made more in a year than educated STEM professionals. The attention-getting per-hour rate might not be a great metric.
- astura 7y ago
  2018 median pay is $53,910 per year https://www.bls.gov/ooh/construction-and-extraction/mobile/plumbers-pipefitters-and-steamfitters.htm https://www.bls.gov/ooh/construction-and-extraction/mobile/p...
  - war1025 7y ago
    Which, to be clear, is nothing to sneeze at in large parts of the country.

esotericn 7y ago

I would have paid hundreds of thousands for my Physics degree if they'd have loaned me it. The thing is that it makes sense if the degree leads to a dramatically higher income and you actually use the chance. If I'd stayed in my hometown instead of moving to London, it'd still be worth it, but probably to the tune of 100-200K. All of these numbers are probably lower than the benefit I'm likely to derive over my working life but 18 year old me would have risk adjusted. Across the population of course, the balance changes dramatically, because huge numbers of people are terminally skint, working unskilled jobs, etc. Most people probably shouldn't get a degree. Who actually wants to be 'most people' when they're an 18 year old?

mch82 7y ago

The first two paragraphs of page 23. - Usury ceilings eliminated - Costs ballooning In other words, the return on investment is falling because society is taking financial advantage of & reducing investment in young people.

WheelsAtLarge 7y ago

What all these studies always fail to factor is that a college degree will give you an advantage over someone that does not have one in just about any situation. Just the fact that you have one will signal to the potential employer that you can accomplish goals, meet a deadline and the many things you need to deal with to get a degree over those that don't have one. The real question is, "Does an ivy league degree, and those that are very expensive worth it?" I suspect that in most cases it's not. An art degree from Harvard will most likely not pay for itself. But an engineering one from a respected state school will likely have a good return on investment. Bottom line a degree is worth it. But you have to make sure you pick a major that pays off in the end.

esotericn 7y ago
I also find the analysis strange because it depends heavily on whether you're profit focused. If you are, then the average outcome probably doesn't matter to you, because you're going to select for profitability in your degree choice, you're going to move around for work, continuously study and train in adult life, and generally you're gonna be fine financially (if perhaps not emotionally, oho). If you're not profit focused - if you're doing the degree primarily and substantially because you love X and want to do X - then what do you care if it doesn't pay back? You got to be an X! The question is almost irrelevant. I think a lot of analysis suffers from this averaging effect whereby actually that average person doesn't exist. There is no realistic path that would have lead to me making the average income for my cohort, for example, because I'm just not that sort of person - I'd rather just go relatively all out, or else work for a non-profit or scrappy startup or whatever, so I either bin high or low.
mennis16 7y ago
Harvard (and similar schools) give very generous aid, not to mention that one can easily transition to consulting or similar no matter their major if they came from Harvard. The considerations for Ivy+ schools are not the same as the considerations that are being discussed in this article/thread. The people that are actually ending up screwed with debt went to mid tier (or worse) private schools for the most part, or possibly mediocre out of state public options.

PaulDavisThe1st 7y ago

Hint to paper writers: you can put your figures inline instead of all at the end. What a dismal reading experience, skimming from pages of text to the end to see what the cited figure(s) actually show, then back to the text again. Who sanctions this sort of thing?

smnrchrds 7y ago
For digital publishing, sure. In academic publishing, for print, or if the same file is used for both digital and print copies, colour pages are often clustered together to reduce the production cost. If you have 20 pages of mostly black and white text each with a small colour figure, you have to print 20 colour pages. If you cluster them together, you can print 18 black and white pages and 2 colour pages instead. This practice will go away as all publishing moves to digital formats. But as long as there is a print version for purchase as well, it will be more cost-efficient to organize papers like this.

kucing 7y ago

Coming from a small town in Indonesia, went to Singapore to study. Will end up with about 30k SGD (~22k USD) in student loan. Fresh graduate pay for software engineering in Singapore ranges mostly from 60-100k. I think the decision worth it* because it opens up horizon, opportunities to working overseas (not just Singapore) and much better living standard. I didn't even know what a CS degree will do after graduation and just randomly chose it because I like Math back in HS. I guess the real benefit of a degree is the pointers and community you get. Surely this can be replaced with a good mentorship, but that requires a good network beforehand. *the quality of education in Singapore University IMHO is far from the quality of the content I found in the publicly shared course content in US universities.

motohagiography 7y ago

College isn't worth it, but that's the whole point. It's becoming what economists call a Giffen Good, that is, something people consume even more of the more expensive it becomes. The biggest value factor of all is Metcalfe's Law of network effects, where the almost universal availability of higher education means that not pursuing it places your starting position in life on the outer long tail of the success curve. Not going to college is like being a business that decided to just never bother getting on the internet, or a person who doesn't know how to drive. Unless you move to some isolated backwater that isn't subject to the network or are some kind of extreme outlier, you are at a huge disadvantage. Notable that these articles about the doubtful value of a university degree are written exclusively by people who have one. The wider availability of education (via cheap debt) and downward mobility means a degree (all things equal) is no longer as distinguishing and does not have the same impact on life outcomes as it once might have. Even previously, the people who went to college had such a huge social head start anyway, it would be difficult to control for education as the determining factor in success. University is starting to resemble a "radical monopoly," (Ivan Illich, summarized here: https://twitter.com/fietsprofessor/status/1122073725862600705 https://twitter.com/fietsprofessor/status/112207372586260070...) where there is nothing discretionary about it. Outside of STEM, I'd argue modern colleges offer students very little more than a tribal affiliation, which is the elephant in the room for articles like these. If you told kids why they need to go to college, it would devalue the degree even further as they re-tribalized around other rites of passage. This doesn't mean don't go to college, it means do absolutely everything in your power to graduate college, because the arbitrary biases and disadvantages of the alternative defy all reason and make anyone with an IQ above 90 insane. When you look at college as a Giffen Good, which people need for participation in a radical monopoly over the labour market, created by a network effect from its debt fueled availability, of course it seems like a college education is not worth it - but it's only ever not worth it to people who already have one. I'd like a mainstream platform to write that view and put these "is college worth it?" navel gazer articles to rest. If only there were an institution to affiliate with...

floe 7y ago
> Notable that these articles about the doubtful value of a university degree are written exclusively by people who have one. Why is it notable?

Animats 7y ago

"The rate of underemployment—working in a job that does not require a college degree—was 42.5 percent among recent graduates." Wow. That, plus debt, is a huge hit. The big item that analysis doesn't consider is the commonality of college education. "Between 2000 and 2018, the percentage of people 25 years and older who had completed a bachelor's degree or higher increased by 9 percentage points, from 25.6 percent to 35.0 percent." - Census Bureau[1]. That's for the entire population, so it lags changes for young people. How did the St. Louis Fed miss that? [1] https://www.census.gov/library/stories/2019/02/number-of-people-with-masters-and-phd-degrees-double-since-2000.html https://www.census.gov/library/stories/2019/02/number-of-peo...

obilecantrem 7y ago

I have a degree from a state school in chemistry, it's been worth it for me. In part because the GI Bill paid for it, but it also landed me several jobs writing software where domain knowledge is required and not so easy to come by without formal education.

anewguy9000 7y ago

just want to add something that seems missing from much of the discussion of higher education; consider the question rephrased as, "is it worth learning to learn?" higher ed is not just job training. its exposure to ideas, opinions, people, and energy in an environment explicitly not tied to a profit motive. it should be cheaper, and more accessible, but..