4 ms·

Education pays. Or being clever gets you more education, and also pays. Or being willing to work hard does those things. Or coming from a family with more money

by gjm11 15y ago

Education pays. Or being clever gets you more education, and also pays. Or being willing to work hard does those things. Or coming from a family with more money, or with a particular kind of attitude (curiosity? go-getting? ...), does those things. Or there's a lot of prejudice out there (on the basis of sex, skin colour, or whatever) that affects both how a person's education goes and how their later career does. Or any combination of those. Or any number of other possibilities. All together, now: Correlation is not the same thing as causation.

danteembermage 15y ago
I'd love to see Wages = b0 + b1 * Bachelor's degree dummy + b2 * parents income + b3 * IQ + b4 * [thing I can't say] + b5 * [other thing I can't say] + b5 * work ethic measure (HS GPA?) + e There are a million things wrong with doing it this way but it would be an interesting addition to looking at that graph by itself. I half-heartedly tried to Google a decent paper but didn't have much luck with anything newer than the 70's
- daniel-cussen 15y ago
  I propose a businessman whose output cannot be measured very well earns p/r+log(e)+k, where p is the profit the company makes, r is his rank within the company (CEO is 1, CFO/CMO is 2, etc), e is the number of employees beneath him, and k is the base salary at that firm. The idea here is that upper management at certain companies effectively own the firm and distribute profit accordingly, while middle management usually advances in income by increasing empire. Edit: variable name.
  - semuelf 15y ago
    I don't see an 's' in your equation
- msellout 15y ago
  Measuring the effect of education is one of the most difficult econometrics tasks due to the way that most societies pursue education -- one year at a time until you're done with it. There's not enough variation.... I was about to launch into a detailed technical explanation, but I think I'll just leave it at the intuitive one.
feralchimp 15y ago
It's much worse than that. The linked article is about the 'median wage' at each of those education levels. I can't imagine a metric less interesting to HN than 'median performance.' Show me the top 10% of earners, then give me the breakdown of how much traditional education those people consumed. Hustlers aren't getting by on their credentials.
- dredmorbius 15y ago
  What's wrong with using median in this instance? Other than knocking off a few obvious outliers: Mssrs. Gates, Jobs, Ellison, and Zuckerberg, I believe.
  - william42 15y ago
    In fact, median is very very explicitly what you want to use, because outliers are just that and the vast majority of people aren't. One study on UNC-Chapel Hill graduates in the 1980s said that the best-paying major was geography. Why? Michael Jordan majored in geography.
    - dredmorbius 15y ago
      Yeah, that's my sense of it. Median as opposed to mean. I'm just not sure what OP's "opposed to" / preferred measure is.
  - bad_user 15y ago
    It's wrong because average people are more likely to do average things in their life, like pursuing a college degree because that's the common thing to do. Outliers on the other hand sometimes choose their own path. Sometimes they drop out of college because of financial problems, but still attend courses that interest them. Sometimes they choose to learn on the job, by making mistakes and fixing them, by screwing around disassembling stuff, by learning from mentors they admire, by trying out new things and so on and so forth. Saying that Gates, Jobs, Zuckerberg are college dropouts really ignores that these people are/were more educated than the hordes of people coming out with master degrees. And this I think is the biggest problem with our educational system, the fact that these alternate paths aren't properly recognized. Disclaimer: I'm also a college dropout, I regret it and intend to finish college, on the other hand I have a monthly revenue at least 3 times bigger than the software industry's medium salary in my city for senior developers.

by gjm11 15y ago

danteembermage 15y ago

I'd love to see Wages = b0 + b1 * Bachelor's degree dummy + b2 * parents income + b3 * IQ + b4 * [thing I can't say] + b5 * [other thing I can't say] + b5 * work ethic measure (HS GPA?) + e There are a million things wrong with doing it this way but it would be an interesting addition to looking at that graph by itself. I half-heartedly tried to Google a decent paper but didn't have much luck with anything newer than the 70's

daniel-cussen 15y ago
I propose a businessman whose output cannot be measured very well earns p/r+log(e)+k, where p is the profit the company makes, r is his rank within the company (CEO is 1, CFO/CMO is 2, etc), e is the number of employees beneath him, and k is the base salary at that firm. The idea here is that upper management at certain companies effectively own the firm and distribute profit accordingly, while middle management usually advances in income by increasing empire. Edit: variable name.
- semuelf 15y ago
  I don't see an 's' in your equation
msellout 15y ago
Measuring the effect of education is one of the most difficult econometrics tasks due to the way that most societies pursue education -- one year at a time until you're done with it. There's not enough variation.... I was about to launch into a detailed technical explanation, but I think I'll just leave it at the intuitive one.

feralchimp 15y ago

It's much worse than that. The linked article is about the 'median wage' at each of those education levels. I can't imagine a metric less interesting to HN than 'median performance.' Show me the top 10% of earners, then give me the breakdown of how much traditional education those people consumed. Hustlers aren't getting by on their credentials.

dredmorbius 15y ago
What's wrong with using median in this instance? Other than knocking off a few obvious outliers: Mssrs. Gates, Jobs, Ellison, and Zuckerberg, I believe.
- william42 15y ago
  In fact, median is very very explicitly what you want to use, because outliers are just that and the vast majority of people aren't. One study on UNC-Chapel Hill graduates in the 1980s said that the best-paying major was geography. Why? Michael Jordan majored in geography.
  - dredmorbius 15y ago
    Yeah, that's my sense of it. Median as opposed to mean. I'm just not sure what OP's "opposed to" / preferred measure is.
- bad_user 15y ago
  It's wrong because average people are more likely to do average things in their life, like pursuing a college degree because that's the common thing to do. Outliers on the other hand sometimes choose their own path. Sometimes they drop out of college because of financial problems, but still attend courses that interest them. Sometimes they choose to learn on the job, by making mistakes and fixing them, by screwing around disassembling stuff, by learning from mentors they admire, by trying out new things and so on and so forth. Saying that Gates, Jobs, Zuckerberg are college dropouts really ignores that these people are/were more educated than the hordes of people coming out with master degrees. And this I think is the biggest problem with our educational system, the fact that these alternate paths aren't properly recognized. Disclaimer: I'm also a college dropout, I regret it and intend to finish college, on the other hand I have a monthly revenue at least 3 times bigger than the software industry's medium salary in my city for senior developers.