(This post is part of the series on postsecondary education.)
+ + +
Ah, this is timely.
While you wait for my next post (which will be about parents' options for meaningful support past age 18), and possibly another guest post by Mark, take a look at this week's Newsweek article by Megan McArdle entitled, "Is College a Lousy Investment?"
A lot of ink has been spilled over the terrifying plight of students with $100,000 in loans and a job that will not cover their $900-a-month payment. Usually these stories treat this massive debt as an unfortunate side effect of spiraling college costs. But in another view, the spiraling college costs are themselves an unfortunate side effect of all that debt....
Unsurprisingly those 18-year-olds often don’t look quite so hard at the education they’re getting. In Academically Adrift, their recent study of undergraduate learning, Richard Arum and Josipa Roksa find that at least a third of students gain no measurable skills during their four years in college. For the remainder who do, the gains are usually minimal. For many students, college is less about providing an education than a credential—a certificate testifying that they are smart enough to get into college, conformist enough to go, and compliant enough to stay there for four years.
When I was a senior, one of my professors asked wonderingly, “Why is it that you guys spend so much time trying to get as little as possible for your money?” The answer, [economist Bryan] Caplan says, is that they’re mostly there for a credential, not learning. “Why does cheating work?” he points out. If you were really just in college to learn skills, it would be totally counterproductive. “If you don’t learn the material, then you will have less human capital and the market will punish you—there’s no reason for us to do it.” But since they think the credential matters more than the education, they look for ways to get the credential as painlessly as possible.
She has a companion blog post up here: Are We Paying Too Much for Higher Education?
A sample from the blog post:
It’s not necessarily a problem that we’re spending so much on education--and putting more people through school--if we’re actually adding value to the workforce. In fact, if education is adding value to workers, then maybe it’s great: we’re upskilling our workforce, preparing them and our country for the 21st century. That’s basically the thinking behind the president’s goal--now, I believe, part of the Democratic Party platform--of having the highest percentage of college graduates in the world in 2020.
But there’s a fly in the ointment, which is that higher education doesn’t only provide education: it also provides a credential. This is known in economics as the “signalling model”: it’s hard to prove to employers that you’re intelligent, conscientious and persistent, and so you use a diploma to demonstrate it.
If you think signalling is a small component of degrees, then the extra investment in education is probably a good thing (although we might look askance at athletics and other non-curricular amenities, which have clearly been getting nicer and nicer over the years). If you think that signalling is a large component of the value of a diploma, then the extra spending is worrying: we’re mostly just bidding up the cost of the credential, not investing in greater economic productivity.
There’s no slam-dunk data on how much of higher education is signal value...
(McArdle is one of my favorite econ-bloggers. She used to be an excellent writer for the intelligent Atlantic Monthly and now, oddly enough, is part of Newsweek.)
Any comments, or is this just more of the same?