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"This calculation is necessarily imprecise, because it can’t control for any pre-existing differences between college graduates and nongraduates — differences t

"This calculation is necessarily imprecise, because it can’t control for any pre-existing differences between college graduates and nongraduates — differences that would exist regardless of schooling." I think this is a key point that shouldn't be understated. We can't simply say you'll make 1.8x as much because you went to college. The people who go to college might have been the people who would have made more anyway. I'm not trying to say college isn't worth it and won't pay dividends, I'm just saying we can't put a number on a graph to quantify it like that.

cm2012 12y ago
Agreed - it just stands to reason. Say a college accepts the top 20% of applicants. Wouldn't these people always perform in the top 20% of the young people pool, just by definition? It seems almost stupidly negligent to not count this factor heavily in discussions of college effectiveness. I've read at least 1 study that shows that the biggest determinant of student success in the workplace was what colleges the student applied to (not even accepted by, let alone attended).
- thaumasiotes 12y ago
  > Say a college accepts the top 20% of applicants. Wouldn't these people always perform in the top 20% of the young people pool, just by definition? You've got hold of a good idea here, but as you've phrased it the answer is "no, that would only hold if everyone in the country applied to the school". If the bottom half of everyone applies to your school, and you take the top 20%, expect performance in the 40th to 50th percentile for the country.
opendais 12y ago
Exactly. I pretty much go "Am I paid as much as my coworkers with degrees?" The answer is generally yes, given the same level of experience. I think what this graph shows is it is really, really hard to break into the jobs at entry level without a college degree. If you fail to break in after a couple years of trying, I suspect most people give up and permanently have their income lowered as a result. I really, really wish these stats were based on 'same profession'. [e.g. Software Developers w/ Degrees vs. Software Developers w/o Degrees] And I highly suspect that the reason that is never done is it will show that the value of the degree vs. a guy who took $15/hr contracting jobs for a couple years until he 'broke in' to being a Software Dev is close to 0. At which point, the self taught dev is ahead in both 'work experience' and financially. But I could be wrong, no one has done that sort of study that I know of :/ EDIT: The closest I could find is: http://cew.georgetown.edu/collegepayoff http://cew.georgetown.edu/collegepayoff https://georgetown.app.box.com/s/ctg48m85ftqm7q1vex8y https://georgetown.app.box.com/s/ctg48m85ftqm7q1vex8y It shows ~$700k lifetime earnings gap for STEM [bachelors vs. highschool diploma]. So, over ~45 years, we are talking a loss of ~15.5k/year on average. Its not quite as precise as what I was hoping for but such is life since I wanted Position to Position.
- bane 12y ago
  > I suspect most people give up and permanently have their income lowered as a result. And as you age, it becomes even harder to break into an entry-level position. I know a few folks who didn't go to college, and ended up in low-end jobs and are hoping their experience will lift them out of it. But it's been a very very hard thing to do. Many of them aren't qualified for the upper-tier jobs their experience would normally have gotten them, so they're readjusting and shooting for entry level (which would still be a pay increase), but are finding the requirements issues even stiffer.
  - opendais 12y ago
    I'm curious what you are defining as 'low-end' jobs? Are we talking people who make 60k a year? 30k? Are we talking about people in their 30s? 40s? 50s?
    - bane 12y ago
      30-40k. U.S. Major Metro Area. In their late 30s, early 40s. Getting on to 20 years of work experience.
      - opendais 12y ago
        Hmmm, I make north of 60k. So I'm not sure if I should be concerned...bah. Are you saying they experienced an income drop or just a lack of income increase?
        bane 12y ago
        Lack of income increase. One guy I know would consider a 60+k job as almost a doubling of his income, which has been more or less fixed for the last 10 years. Which, with inflation, means it's a de facto slow pay reduction. He also really struggles with putting out resumes, 8 solid years of rejections makes him think he's formatting his resume wrong, or not describing his job right. But the little feedback he's gotten is that he's simply not meeting the minimum job requirements. But he's way overqualified on the work experience, just no education credentials. So a firm takes a chance if they hire him that he'll jump ship soon for a better paying gig more commensurate to his experience level, or they hope that his experience was complete enough to fill in the gaps that a solid education would provide...but why take the risk, there's dozens of candidates for every open position at every level, most of whom will fill the minimum requirements.
jessriedel 12y ago
The effects of pre-existing ability are clearly huge, and any attempt to measure the value-added by college is pretty much worthless without accounting for it. If college primarily functions as a hard-to-fake signal of pre-existing ability (a theory which is more compelling than it initially sounds), then there could be arbitrarily large pay gaps between graduates and non-graduates even if college was provably making graduates dumber. Economist Bryan Caplan has a very entertaining interview about this idea: http://www.econtalk.org/archives/2014/04/bryan_caplan_on.html http://www.econtalk.org/archives/2014/04/bryan_caplan_on.htm...
- rayiner 12y ago
  The theory that colleges are primarily about signaling is something I think a lot of people believe but don't necessarily say. Though sometimes they do: http://www.abajournal.com/mobile/article/justice_scalia_tells_law_student_why_she_wont_be_his_law_clerk http://www.abajournal.com/mobile/article/justice_scalia_tell... ("'By and large,' Scalia said during the April 24 law school appearance, 'I’m going to be picking from the law schools that basically are the hardest to get into. They admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest, OK?'") Obviously it depends on the field. The value-add of an education in say medicine or engineering, which have a strong lab/practice aspect, is probably greater. Personally, I think in general, people overestimate the actual value-added by education at all levels.
  - jessriedel 12y ago
    > The theory that colleges are primarily about signaling is something I think a lot of people believe but don't necessarily say. >...I think a lot of people believe but don't necessarily say. If it's really true that a majority of people believe this but don't say it, then society is consciously making crazy decisions. One implications of the signaling theory is that it recommends ending essentially all public subsidies of higher education, and perhaps even penalizing it. In particular, the entire student loan debt (>$1 trillion, or 7% of US GDP) is a waste.
gojomo 12y ago
It also seems Leonhardt's quoted analyses assume that the value of graduating from college is what should be used to decide whether to enroll. But when looking at the 4.3 million students who enrolled in 2004, the Chronicle of Higher Education found that through 2010, the graduation status of 3 million of those students could not be determined! http://collegecompletion.chronicle.com/ http://collegecompletion.chronicle.com/ Looks like we're already urging college (& debt) on as many people as possible, but then deceptively reporting the benefits based only on those who thrive/graduate.

cm2012 12y ago

Agreed - it just stands to reason. Say a college accepts the top 20% of applicants. Wouldn't these people always perform in the top 20% of the young people pool, just by definition? It seems almost stupidly negligent to not count this factor heavily in discussions of college effectiveness. I've read at least 1 study that shows that the biggest determinant of student success in the workplace was what colleges the student applied to (not even accepted by, let alone attended).

thaumasiotes 12y ago
> Say a college accepts the top 20% of applicants. Wouldn't these people always perform in the top 20% of the young people pool, just by definition? You've got hold of a good idea here, but as you've phrased it the answer is "no, that would only hold if everyone in the country applied to the school". If the bottom half of everyone applies to your school, and you take the top 20%, expect performance in the 40th to 50th percentile for the country.

opendais 12y ago

Exactly. I pretty much go "Am I paid as much as my coworkers with degrees?" The answer is generally yes, given the same level of experience. I think what this graph shows is it is really, really hard to break into the jobs at entry level without a college degree. If you fail to break in after a couple years of trying, I suspect most people give up and permanently have their income lowered as a result. I really, really wish these stats were based on 'same profession'. [e.g. Software Developers w/ Degrees vs. Software Developers w/o Degrees] And I highly suspect that the reason that is never done is it will show that the value of the degree vs. a guy who took $15/hr contracting jobs for a couple years until he 'broke in' to being a Software Dev is close to 0. At which point, the self taught dev is ahead in both 'work experience' and financially. But I could be wrong, no one has done that sort of study that I know of :/ EDIT: The closest I could find is: http://cew.georgetown.edu/collegepayoff http://cew.georgetown.edu/collegepayoff https://georgetown.app.box.com/s/ctg48m85ftqm7q1vex8y https://georgetown.app.box.com/s/ctg48m85ftqm7q1vex8y It shows ~$700k lifetime earnings gap for STEM [bachelors vs. highschool diploma]. So, over ~45 years, we are talking a loss of ~15.5k/year on average. Its not quite as precise as what I was hoping for but such is life since I wanted Position to Position.

bane 12y ago
> I suspect most people give up and permanently have their income lowered as a result. And as you age, it becomes even harder to break into an entry-level position. I know a few folks who didn't go to college, and ended up in low-end jobs and are hoping their experience will lift them out of it. But it's been a very very hard thing to do. Many of them aren't qualified for the upper-tier jobs their experience would normally have gotten them, so they're readjusting and shooting for entry level (which would still be a pay increase), but are finding the requirements issues even stiffer.
- opendais 12y ago
  I'm curious what you are defining as 'low-end' jobs? Are we talking people who make 60k a year? 30k? Are we talking about people in their 30s? 40s? 50s?
  - bane 12y ago
    30-40k. U.S. Major Metro Area. In their late 30s, early 40s. Getting on to 20 years of work experience.
    - opendais 12y ago
      Hmmm, I make north of 60k. So I'm not sure if I should be concerned...bah. Are you saying they experienced an income drop or just a lack of income increase?
      - bane 12y ago
        Lack of income increase. One guy I know would consider a 60+k job as almost a doubling of his income, which has been more or less fixed for the last 10 years. Which, with inflation, means it's a de facto slow pay reduction. He also really struggles with putting out resumes, 8 solid years of rejections makes him think he's formatting his resume wrong, or not describing his job right. But the little feedback he's gotten is that he's simply not meeting the minimum job requirements. But he's way overqualified on the work experience, just no education credentials. So a firm takes a chance if they hire him that he'll jump ship soon for a better paying gig more commensurate to his experience level, or they hope that his experience was complete enough to fill in the gaps that a solid education would provide...but why take the risk, there's dozens of candidates for every open position at every level, most of whom will fill the minimum requirements.

jessriedel 12y ago

The effects of pre-existing ability are clearly huge, and any attempt to measure the value-added by college is pretty much worthless without accounting for it. If college primarily functions as a hard-to-fake signal of pre-existing ability (a theory which is more compelling than it initially sounds), then there could be arbitrarily large pay gaps between graduates and non-graduates even if college was provably making graduates dumber. Economist Bryan Caplan has a very entertaining interview about this idea: http://www.econtalk.org/archives/2014/04/bryan_caplan_on.html http://www.econtalk.org/archives/2014/04/bryan_caplan_on.htm...

rayiner 12y ago
The theory that colleges are primarily about signaling is something I think a lot of people believe but don't necessarily say. Though sometimes they do: http://www.abajournal.com/mobile/article/justice_scalia_tells_law_student_why_she_wont_be_his_law_clerk http://www.abajournal.com/mobile/article/justice_scalia_tell... ("'By and large,' Scalia said during the April 24 law school appearance, 'I’m going to be picking from the law schools that basically are the hardest to get into. They admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest, OK?'") Obviously it depends on the field. The value-add of an education in say medicine or engineering, which have a strong lab/practice aspect, is probably greater. Personally, I think in general, people overestimate the actual value-added by education at all levels.
- jessriedel 12y ago
  > The theory that colleges are primarily about signaling is something I think a lot of people believe but don't necessarily say. >...I think a lot of people believe but don't necessarily say. If it's really true that a majority of people believe this but don't say it, then society is consciously making crazy decisions. One implications of the signaling theory is that it recommends ending essentially all public subsidies of higher education, and perhaps even penalizing it. In particular, the entire student loan debt (>$1 trillion, or 7% of US GDP) is a waste.

gojomo 12y ago

It also seems Leonhardt's quoted analyses assume that the value of graduating from college is what should be used to decide whether to enroll. But when looking at the 4.3 million students who enrolled in 2004, the Chronicle of Higher Education found that through 2010, the graduation status of 3 million of those students could not be determined! http://collegecompletion.chronicle.com/ http://collegecompletion.chronicle.com/ Looks like we're already urging college (& debt) on as many people as possible, but then deceptively reporting the benefits based only on those who thrive/graduate.