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"Your earning potential is essentially given to you at birth" Interestingly the data shows otherwise. Factors such as parents' education, where one lives, age
by joedev 14y ago
"Your earning potential is essentially given to you at birth"
Interestingly the data shows otherwise. Factors such as parents' education, where one lives, age, race, family structure, IQ are measured and factored in. Two stats techniques are commonly applied. Ordinary Least Squares (OLS) is more traditional while Instrument Variables (IV) is a newer approach which attempts to account for statistical errors such as omitted and unknown variables in order to more strongly determine causality.
If you like stats check out this review of the literature: http://emlab.berkeley.edu/users/card/papers/return-to-schooling.pdf http://emlab.berkeley.edu/users/card/papers/return-to-school... which concludes that studies "Taken as a whole, however, the findings from the recent IV literature are remarkably consistent with Griliches' (1977) assessment of a much earlier set of studies, and point to a causal effect of education that is as big or bigger than the OLS estimated return, at least for people whose schooling choices are affected by the supply-side innovations that have been studied so far."
There are real economic reasons why governments invest in their citizens' schooling. It's not just because it sounds like a nice idea. The increased income potential of someone going to school pays off for a government higher earnings which is a primary indicator of an economy's health.
- randomdata 14y agoFactors such as parents' education, where one lives, age, race, family structure, IQ are measured and factored in. I would classify those as luck factors. They don't really address what I was speaking to. Even if you believe college counts, someone with the fanciest of PhDs is going to really struggle to out-earn high school dropouts if he or she is not willing to work on the job. And that is the point. College is not the driver, it is the person. A person can leverage college to find themselves in better standing, but there are a million other ways to do the same. Just blindly going to college is not going to improve anything with respect to income. You have to be someone who is cut out to earn more, and if you are that person, you will find a way, college or not.
- UK-AL 14y agoA Ph.D is a filter in that respect, as you have to work hard to achieve it. And I there are many hard working shop floor workers, but they never make it to management. Just working hard on it's own does not earn you more money.
- randomdata 14y agoI agree entirely. Income increases by the unique value that you can bring to the table, not the degrees you have hanging on the wall. If everyone in the world studied the exact same subject in college, incomes would remain the same as if those people had not gone to college at all. The market forces would remain unchanged. What I mean by work is to work to set yourself apart. Maybe you need to hit the gym to become unique that way. Maybe you need to work on your singing skills to become unique that way. College can also bring you unique attributes, but it is no more special than any other avenue, at least with respect to income. Again, college has nothing to do with it on a macro scale. I won't deny anecdotal instances can use college to their advantage. It definitely happens. Random degree holder is not going to be any better off though.