Sunday, December 4, 2011

PF January 2012 - Ideas for the Pro Case


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The Value of Higher Education
An article for the Chronicle of Higher Education, entitled, "The High Cost of College: an Increasingly Hard Sell", (William Strauss and Neil Howe, 2005) 
"The common assumption is that a college education "always pays," but that assumption is based on retrospective data from the late 90s and earlier on the relative earnings of adults now in their mid-20s, 30s, and 40s. According to census data, when adjusted for inflation, the median earnings of workers age 25 and older with only a bachelor's degree have fallen for four straight years. Today's heavily indebted college graduate does not necessarily have an edge over someone of the same age who spent those same four years building a résumé, gaining experience, establishing connections, and earning and saving money. Imagine what would happen to colleges if word starts to spread, over the next 5 to 10 years, that many of those who chose to forgo higher education are more successful at age 30 measured by incomes, homes, savings — than their better-educated but heavily indebted peers."

This nicely sums up the Pro position but there is another over-arching argument which claims the high-premium being placed on higher education is actually devaluing university degrees.  Indeed, only a generation or two ago, the percentage of high school graduates continuing to college was much smaller than it is today.  Students could choose alternate paths to achieving their employment goals.  The fact of the matter is, we still need ordinary workers doing ordinary day to day jobs that do not require advanced educations. In addition, there is the simple reality that not everyone is suited for college.  A large percentage of students will never complete their education and many that do will never find the high paying jobs that are the lure of higher education in America. Bryan Caplan, writes in the Magic Of Education 
"...literacy and numeracy are a big deal. But the "obvious" story is far from complete. Think about all the time students spend studying history, art, music, foreign languages, poetry, and mathematical proofs. What you learn in most classes is, in all honesty, useless in the vast majority of occupations." 
So if it is true the vast majority of what students learn in college is worthless in the real world, why is this worthlessness becoming more and more expensive?

One possible explanation stems from what Bryan Caplan calls "the signaling model" of education. The degree signals to employers that graduates are "smart, hard-working and conformist", but if that is all the degree does, there must be cheaper and more reliable indicators for suitability of potential employees.

Down With the BA
Caplan and others seem to be saying for the majority of students, college is not a good value, especially considering that most graduates are essentially retrained to adapt to real-world careers. Many employers do not really care what courses you took, nor what special knowledge you may have taken from the hours of course work, lectures, reading and testing since most of it had no real-world value to them anyway.  The value seems to rest in that fact you have accomplished something of symbolic value rather than practical value and as more and more students achieve that goal, its value as a measure of suitability to employment becomes diminished. As a result employers "ratchet up" the requirements in order to better distinguish the field of candidates. Certainly if everyone had the requested degree, employers would need to key-in on other criteria for employment which takes university credentials out of the picture altogether.

The Pro Case
One of the first opportunities Pro has to make a case, is look at the rising cost of education with respect the rate of return and the rate of return with respect to high school education. Professor Richard Vedder writes, 
"For most, the argument goes, college is a good investment. In 2005, the average earnings of full-time year-round workers with bachelor’s degrees, $65,281, were $27,251 higher than for comparable workers with high school diplomas. The discounted present value of that lifetime earnings differential (from 35–40 years of working), is several hundred thousand dollars, vastly more than the cost of four years of higher education, even allowing for the loss of income from not working a job while attending college...It takes more resources today to educate a postsecondary student than a generation ago. That is not true for most goods and services, where productivity advances assisted by capital formation and technological advances have lowered the resources needed to produce a single unit of output. Relative to other sectors of the economy, universities are becoming less efficient, less productive, and, consequently, more costly." 
Vedder concludes: 
"The high school/college earnings differential may have stopped growing, so the investment return to college will start falling unless costs are contained. Our colleges and universities were not created in a day, nor will reform and change come easily. But we must begin the process if higher education is going to better promote the advance of our civilization and our material prosperity."
Another opportunity for advocacy is an examination of what happened to students after they graduate.  One could claim the higher salaries earned by graduates is not universally applicable. In fact it may only apply to a small percentage of graduates. An examination of the Bureau of Labor Statistics data shows that 60 percent of graduates from 1992 to 2008 worked at relatively low-skilled jobs occupied by high-school graduates or less. This certainly suggests the value of higher education is only in place for a limited number.

The following papers, articles and reports, used as sources for my essay can be found on the web and will get you started in your research. Good luck.


  1. "The High Cost of College: an Increasingly Hard Sell", Strauss, William & Howe, Neil, 2005, The Chronicle of Higher Education
  2. "The Great College Degree Scam", Richard Vedder, 2010, The Chronicle of Higher Education
  3. "Down with Four-Year College Degree", Charles Murray, 2008, Cato Unbound
  4. "The Magic of Education", Bryan Caplan, 2011, Econlog.org
  5. 'How Higher Education is Breaking the Social Contract and What To Do About It", Daniel Yankelovich, 2009, Forum for the Future of Higher Education
  6. "Should the Obama Generation Drop Out?", Charles Murray, 2008, The New York Times
  7. "Over Invested and Over Priced", Richard Vedder, 2007, Center for College Affordability and Productivity
  8. "The Case Against College", Marty Nemko, 2004-2011


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