
Is College Worth It? Clearly, New Data Say - kenjackson
http://www.nytimes.com/2014/05/27/upshot/is-college-worth-it-clearly-new-data-say.html?hp&_r=0
======
jonathanjaeger
"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.

~~~
jessriedel
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.htm...](http://www.econtalk.org/archives/2014/04/bryan_caplan_on.html)

~~~
rayiner
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_tell...](http://www.abajournal.com/mobile/article/justice_scalia_tells_law_student_why_she_wont_be_his_law_clerk)
("'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
> 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.

~~~
rayiner
I didn't say everybody believes it, but I think a lot of people do but
generally don't say anything because the idea that education is always a big
value-add is a touchstone of public policy.

------
Jun8
"When experts and journalists spend so much time talking about the limitations
of education, they almost certainly are discouraging some teenagers from going
to college and some adults from going back to earn degrees. (Those same
experts and journalists are sending their own children to college and often
obsessing over which one.)"

This particular totally misguided comment is a good example of the bias of
this article: As a upper-middle class parent, if I can send my son to
Berkeley, MIT, Urbana Champaign, etc. then _of course_ I want him to go those
colleges and of course they add value. That's not the point.

The point is about students from poor neighborhoods getting hammered about the
value of college and this being presented as the _only_ way they can get a
better life. Then, they end up in brain-dead diploma mills with very debatable
effect on their employability.

I had this debate many times with teachers in the Chicago South side high
school that I mentor: Compare attending a place like Illinois Central College
for four years OR spending that time learning about a craft, e.g. programming
(yes, I'm biased) and then trying to attend, say, Hacker School or something
similar. Granted, this is not an option for all students but things like this
should be mentioned to students and put on the table as an option. Instead,
when I mention this and similar options teachers and students look at me alike
like I'm from Mars.

The reason is that high school counselors and teachers whose job it is to
guide disadvantaged students do not have a clear understanding of these option
for the simple reason that when they got educated these option did not exist.

~~~
rayiner
The reason they look at you that way is outside of programming, not having a
degree is a barrier to white collar jobs. My father in law never finished his
degree, but worked his way up to a director level position in IT. But when he
had to find a new IT job, he had a really hard time getting a comparable
position, because those positions required a degree.

People in the software world live in a bubble. There's is not an oversupply in
that field like there is in nearly every other. That makes employers more
willing to overlook paper qualifications to broaden the pool of candidates.

~~~
opendais
I'm not convinced a lack of 'oversupply' is true.

Many companies are trying to increase the H1B and other visas to generate the
kind of oversupply you are talking about.

Software is also one of the handful of industries where _physical location_
doesn't matter. So being a _good_ Indian developer who is comfortable living
off of 50% of the US salary is a huge competitive advantage.

If people who just counted beans had their way, I'm sure they'd outsource as
much development as they could to countries like India [if only they could
filter out the bad developers in those countries].

~~~
rayiner
It's all relative, right? The supply situation in software is much more
favorable for labor than in nearly any other white collar occupation save
maybe for medicine.

~~~
opendais
Based on this random list from 2011: [http://www.cbsnews.com/news/25-college-
majors-with-lowest-un...](http://www.cbsnews.com/news/25-college-majors-with-
lowest-unemployment-rates/)

You appear to be correct.

However, moving forward in time to 2013:
[http://jobs.aol.com/articles/2013/01/18/careers-lowest-
unemp...](http://jobs.aol.com/articles/2013/01/18/careers-lowest-unemployment-
rate/) [http://money.cnn.com/2013/01/04/news/economy/jobs-lowest-
une...](http://money.cnn.com/2013/01/04/news/economy/jobs-lowest-
unemployment/)

That appears to be incorrect.

~~~
waps
Keep in mind, however, that medicine has been in this position for ~4000
years. Or at least, I did classical studies, and doctors did very well for
themselves in the ancient Greek city states, in the Roman Empire (East and
West), in the middle ages, in the Renaissance, in the Industrial age, and
today.

It will be 1950+ years before IT gets a track record half as good in the best
possible case.

~~~
opendais
Eh?

I think you should read the links I posted before assuming I was talking about
medicine.

There are a bunch of other fields [such as physicists] that have lower
unemployment. I don't think there is much 'employer power' in a labor market
where there is .3% unemployment. The . is intentional.

------
enoch_r
It's worth keeping this[1] in mind while reading. Someone in the bottom
quartile who goes to college has an 11.4% chance of finishing, vastly reducing
the expected return of the decision to go to college--even ignoring the fact
that people in the bottom quartile are probably attending much lower quality
institutions.

The most plausible story about education is that graduating from any college
used to be an effective signal of intelligence, conscientiousness, and
ambition. But everyone realized this, the demand (and therefore the price and
quantity purchased) for college educations increased dramatically, and the
quality of the signal was significantly diluted--attending an "average"
college in the US and getting a non-job-related degree now just shows that
you're minimally capable. This is worse for everyone.

[http://econlog.econlib.org/archives/2014/05/three_graphs_ab....](http://econlog.econlib.org/archives/2014/05/three_graphs_ab.html)

~~~
Periodic
The article itself pointed out that their headline number doesn't really
account for pre-college differences between the two groups. For example,
someone who grows up in a stable high-income environment will likely go to
college, but that is because they have the support structures that will assist
them prevent them from falling too far behind and help them recover from any
setbacks. A person who might want to go to college but is from a disrupted
lower-income environment may not have the support structures that help them
get through college and find a good job.

From the article:

    
    
        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.
    

Completing college may simply be correlated with having a well-paying job
because the skills required for both are very similar.

A second study, linked from the article, compared people with similar jobs and
those with and without degrees, e.g. secretaries. They still found a gap, but
again they did not control for for pre-college environment.

------
davidcbc
The biggest problem I have with this article is that it lumps every single
major into "college" and makes the blanket statement that it is worth it.

Ok, so the average 'cost' of college is negative $500,000, how does that break
down by major? What is the average 'cost' of an Art degree? An engineering
degree?

"Is college worth it?" is the wrong question because there are so many
variations that there isn't just one single answer. "Is my major at this
specific college worth it?" is a more valuable discussion.

~~~
RussianCow
But then you're getting too specific for any useful answer. I personally would
be interested in seeing the pay difference between those who graduated college
and those who did not _in the same job_. For instance, how much more does the
average software developer with a CS degree make than an equivalent dev
without a degree?

~~~
Fishkins
I'm not sure this would be very useful if you're only looking at people who
successfully got a job in that field. Let's assume software devs make the
comparable salaries regardless of education. It could still be true[0] that CS
degree holders who look for tech jobs get one 80% of the time, whereas non-
degree holders who apply for a tech job get one 20% of the time and end up in
a much lower-paying job. The analysis you suggest would indicate a college
degree has no effect on salary, but it actually had a huge effect if you
consider everyone who was interested in tech but didn't make it.

[0] and in my opinion very likely, aside from these specific percents being
made up and probably pretty far off.

~~~
RussianCow
That's true, I didn't think about success rate of landing jobs. This is what
makes answering "Is college worth it?" so hard.

------
aaron987
I'm surprised by how few comments mention one other thing that is important to
consider: How does the lifetime value of a college education compare to
someone who instead spent that money starting a business?

I went to a small private college and graduated in 2010 with about $40,000 in
loans. My degree was in biology. So far, it hasn't really helped at all. If I
were going to start over, I would skip college and start a business.

My student debt is higher than average, so let's be more conservative and use
the $25,000 average debt stated in the article. For $25,000, you can create a
pretty nice little business, especially in a small city. For example, I lived
in Fargo for a few years where my living expenses were only $800 per month.
Even if that business fails, you are no worse off than a college grad, except
you also have years of experience for when you try another business.

I think the real question we should be asking is not "Is college worth it?",
but rather, "How do we help young adults start businesses the way we help them
get into college?". We spend so much time and money offering scholarships,
which in turn is supposed to help them get good jobs. In other words, we are
spending a lot of money to increase competition in the job market. If that
money was spent helping those young bright minds start businesses, we would be
simultaneously removing someone from the job market AND creating new jobs.

------
jinushaun
I'm curious how those numbers are calculated. Especially when it is broken
down my majors. Feels like the same lie of "college = job" that we teach our
kids, which fools them into thinking that they don't need a tangible
vocational skill to get a job.

Also, how much of the growing gap is a result of existing college grads with
jobs getting pay raises faster than those without a college degree? With the
tech boom, are the outliers skewing the data? Not all college grads are
created equal.

------
JustSomeNobody
We need more vocational training. We need to rethink what jobs really need a
college degree vs what jobs can be trained for in vocational schools. A fair
number of programming jobs, for example, could be filled with students who
could take the vocational route.

Not everyone should be or can be put into the 'college degree' box. This
doesn't make them worth less as a person and it certainly doesn't mean they
can't do certain jobs.

We seriously need to rethink how we perceive vocational training.

------
jsmcgd
The gap in average earnings between those who complete college and those who
don't is pretty terrifying, given that it is possible to have no degree but
all of the associated debt. If accruing all this debt guaranteed a college
degree then yes, college is worth it. But it doesn't.

So I think the article suffers from selection bias. It focuses on a subgroup,
that people won't know they will be a part of when asking themselves the
question, is college worth it?

------
hawkharris
In The Intelligent Investor, Ben Graham devotes dozens of pages to two simple
yet important rules:

1\. Never invest money that you can't afford to lose.

2\. The value of an investment is always a function of what you paid for it.

The commonsense rules also apply to college. Students shouldn't choose
colleges with lofty tuitions if their expected careers will have low ROIs. And
the more they invest in college, the better their investments must perform.

------
ryanpardieck
Graduating from college might be worth it, but the total societal cost of
college has to include those who attend, rack up debt, but do not graduate.
You can't present college as a sure thing when actually graduating from it
will never, ever be a sure thing.

And no matter how strong the case may be for college, in the end there's no
glossing over costs. I just checked the total cost of attendance for our state
school here, and it is 20K/year for residents. 80K-ish in debt is a big,
serious, worth-thinking-over decision, full stop. Presenting this as a no-
brainer will always be irresponsible until the costs go down.

And even if the debt pays off over the course of your multi-decade career,
it's worth asking the question of whether paying down such debt already when
you are so young is going to be how you want to kick off your adult life. Not
claiming to have the answer to that one.

Ultimately I think it's flawed to claim a form of education that is so
outrageously expensive should be just as crucial as high school. If you can't
reasonably save for it, it should be a luxury.

------
drblast
This is too simple to be useful. Not only will the wildly successful outliers
skew the data, but it doesn't take into account the risk of paying a huge
amount now for the hope of earning more later.

In no other area would someone be taken seriously if they asked you for a few
hundred thousand dollars now for the promise of paying double or triple that
money back (on average!) by the time you die. That's a horrible rate of
return, and all the risk is up front.

My mother paid her way through college working as a waitress part-time. You
can't do that now without also accumulating a massive amount of debt. College
for my mother was an easy decision in the 1970's, but put her thirty-five
years into the future and it's not, and for many people like her isn't even an
option.

That's the problem.

~~~
thaumasiotes
> My mother paid her way through college working as a waitress part-time. You
> can't do that now without also accumulating a massive amount of debt.

Yes you can. I had a friend who attended UCSC for three years (2004-07) on
financial aid and wound up flunking out. According to him (I admit I haven't
seen documents), the total debt he accumulated for those three years was in
the low thousands of dollars. I'm pretty sure working part-time as a waitress
for three years would cover it. I'm also pretty sure that, in the hypothetical
case where your financial aid requires you to do well in school, flunking out
doesn't meet that standard.

~~~
akgerber
UCSC tuition & fees have more than doubled since 2004:
[http://www.collegecalc.org/colleges/california/university-
of...](http://www.collegecalc.org/colleges/california/university-of-
california-santa-cruz/#.U4URxlhdXPY) (And they had already increased by 41% in
2004.)

~~~
thaumasiotes
I've noticed that myself, but doubling a debt under $5,000 leaves you with a
debt under $10,000; not really a big problem to pay off.

------
facepalm
Are they comparing people with a college degree to people who dropped out of
college? Because it seems to me the latter would be quite a specific sample
and introduce a lot of bias.

Also, have they accounted for people with a college degree who don't have a
job?

------
pnathan
'Worth' is a slippery statement. For that matter, so is 'college graduate'.

I did a breakdown of unemployment vs level of education attained (using BLS
data), and there was a strong visual difference between the people with
college work and those without. If you had a college degree, you had a far
better chance to have a job than someone who, e.g., dropped out of high
school.

But this really only tells part of a story; it doesn't remark on the jobs
available, or the personal determination, or the social savvy to grasp what
more job-friendly life choices would be.

Etc.

~~~
pessimizer
And, of course, people who are less bright, work less hard, or have financial
hardships (or who attend terrible primary or secondary schools) will find K-12
harder to complete, and make it to college less often. People who find school
easier will have little to no reason not to attend college, especially with
the large discounts that come with good grades and high test scores.

------
DontBeADick
These articles never ask the questions that really matter, e.g.: Do colleges
create high-income earners, or are they just good at selecting future high-
income earners to bilk out of $100k? And do those graduates get high-paying
jobs because they're better equipped to perform them, or are they simply
benefitting from the myth that degrees make them more qualified?

On a related note, I coached Lebron James' basketball team when he was 7 years
old, so I believe I deserve credit for all of his success.

Just kidding, but you get what I'm saying.

------
gojomo
Will Saletan's comment on this article pinpoints its gaping flaw:

"Tell all the smart, disciplined people to go 4-year colleges. Then give
college the credit for their success. #scam
[http://nyti.ms/1jqvoht"](http://nyti.ms/1jqvoht") \- @saletan
([https://twitter.com/saletan/status/471329858295832576](https://twitter.com/saletan/status/471329858295832576))

------
api
A degree is basically a license allowing you to get a job above the service
and low-level manufacturing industry, so _of course_ it's worth it. Having a
writ of noble title was worth it in the middle ages / renaissance area. The
real question is whether there's enough objective value beyond self-
reinforcing certification requirements to justify the expense.

------
donniezazen
Education is an active pursuit. You can't learn until you know what problems
one is looking to solve. Colleges have made education a passive process. You
go to classes. You do your homework and you take exams. It doesn't work like
that.

------
ToastyMallows
> Not going to college will cost you about half a million dollars.

I don't understand this sentence at all. Doesn't he actually mean that by not
going to college you won't earn, on average, $500,000 more that you will if
you do go to college?

~~~
Nicholas_C
He's including opportunity costs.

------
nsxwolf
It might still be worth it, but can't possibly be worth it forever. If you
have a baby today, you might need to save $500,000 for a 4 year degree.

It's hard to imagine an economic climate where that will be worth it.

------
mrcactu5
how can there be too few college graduates if we are fighting over the slots
currently availble?

[http://www.nytimes.com/2014/04/09/us/led-by-
stanfords-5-top-...](http://www.nytimes.com/2014/04/09/us/led-by-
stanfords-5-top-colleges-acceptance-rates-hit-new-lows.html)

the original title was "Led by Stanford’s 5%, Top Colleges’ Acceptance Rates
Hit New Lows" \-- with potential double entendre

[https://news.ycombinator.com/item?id=7556074](https://news.ycombinator.com/item?id=7556074)

------
the_watcher
I'd like to see some better segmenting of this data by school and degree. Most
of my issues with college are the idea that a degree in anything from anywhere
at any cost is a good idea.

------
xiphias
The real question should be: is high school worth it, or people should just
skip it and go straight to college?

------
krazydad
Is College Worth It? "Totally," says a bunch of people who went to college.

