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Yes, the confusion of correlation and causation that you find in every article on post-college earnings certainly causes the benefit of college to be overstated

Yes, the confusion of correlation and causation that you find in every article on post-college earnings certainly causes the benefit of college to be overstated, but that's not even the real problem. Even with an ideal randomized experiment that shows the exact size of the causal effect on individuals, we would know little about the causal effect on a macro level. Imagine if all doctors had to put $10,000 into a fire pit or else be prohibited by law from practicing a certain lucrative form of medicine. If you ran a controlled randomized experiment, you could easily establish a causal (yes, causal) relationship between throwing money in the fire pit and increased future earnings. This would not make throwing money in the pit any less stupid. College is a resource sink that no rational individual acting in their own self-interest (with a few rare exceptions) can refuse. It's rational for individuals to go to college to get better jobs, and it's rational for employers to discriminate against non-grads to avoid bad employees, but at the end of the day we're still throwing money into an ever-growing fire pit of crushed beer bottles, cannabis seeds, and Playstation controllers.

stanleydrew 17y ago
You kind of contradict yourself. I'm sensing that you feel college education is purely a signaling mechanism, and I don't disagree completely. You correctly acknowledge that the behavior of both the signal's sender and receiver (student and employer respectively) is rational, but then lament that we are throwing money into a fire-pit as though we could all agree to just stop using this signal and save money. The reason we have the signal in the first place is because high-quality individuals want a way to differentiate themselves, and they have rationally decided that such differentiation is worth the cost.
- goodside 17y ago
  To the extent that it's only a signaling mechanism, though, it doesn't make sense to subsidize it. Encouraging everyone to go to college with the state paying half their tuition doesn't confer any benefit on the public. It just appears to because it's inflating a common metric of intelligence, thus providing impetus for further subsidy, and so on. It's as if the government noticed that people with large diamonds are happier, healthier, and smarter than people without (which they probably are), so they started subsidizing diamond mines for the good of the public. It might be advantageous for any given peacock to have a bigger, flashier, and more cumbersome tail than the next peacock, but the arms race makes it ever more certain that the peacocks will go extinct if a new predator shows up. Money that's spent on escalating signals is money that could be spent on other things, and once the public cost becomes high enough that people get disgusted and stop respecting the signal (e.g., large SUVs) its value plummets. I don't think college is at the breaking point just yet, and it might still be rational to get that generic bachelor's. But if tuition continues to rise at its current rate, which greatly outpaces inflation, there will come a day when the bubble bursts.

stanleydrew 17y ago

You kind of contradict yourself. I'm sensing that you feel college education is purely a signaling mechanism, and I don't disagree completely. You correctly acknowledge that the behavior of both the signal's sender and receiver (student and employer respectively) is rational, but then lament that we are throwing money into a fire-pit as though we could all agree to just stop using this signal and save money. The reason we have the signal in the first place is because high-quality individuals want a way to differentiate themselves, and they have rationally decided that such differentiation is worth the cost.

goodside 17y ago
To the extent that it's only a signaling mechanism, though, it doesn't make sense to subsidize it. Encouraging everyone to go to college with the state paying half their tuition doesn't confer any benefit on the public. It just appears to because it's inflating a common metric of intelligence, thus providing impetus for further subsidy, and so on. It's as if the government noticed that people with large diamonds are happier, healthier, and smarter than people without (which they probably are), so they started subsidizing diamond mines for the good of the public. It might be advantageous for any given peacock to have a bigger, flashier, and more cumbersome tail than the next peacock, but the arms race makes it ever more certain that the peacocks will go extinct if a new predator shows up. Money that's spent on escalating signals is money that could be spent on other things, and once the public cost becomes high enough that people get disgusted and stop respecting the signal (e.g., large SUVs) its value plummets. I don't think college is at the breaking point just yet, and it might still be rational to get that generic bachelor's. But if tuition continues to rise at its current rate, which greatly outpaces inflation, there will come a day when the bubble bursts.