
College is really, really worth your money - chrismealy
http://stevereads.com/weblog/2011/10/24/college-is-really-really-worth-your-money/
======
fdschoeneman
The data shows correlation, not causation. I can think of at least two causal
explanations that would account better.

1) Children born to wealthy parents are both a) more likely to go to college
because their parents can pay for it, and b) to step into high paying jobs
because of their social networks than poor kids. Thus while there is
correlation between college degrees and earning potential, the root cause is
being born into a wealthy family.

2) Smart people are more likely to go to college than dumb people, and smart
people are more likely to do well in jobs which require intelligence.
Similarly, intelligence is the causal factor, not simply attending college.

College may very well be worth the money; but your statistics prove no such
claim.

~~~
Rusky
But in both of those points, isn't it possible that going to college could 1)
improve your social network and 2) help you raise your intelligence? Same
outcome.

Just because something isn't causal doesn't mean the statistics are worthless.

~~~
fdschoeneman
I'm sorry if I made it seem like I believe the statistics are worthless. I
merely wanted to show that they don't prove that a college degree is "really,
really worth it."

------
tryitnow
From the article: " Over the course of his working life, a college-educated
white male .... will have earned about $2.3 million. His high-school-educated
white-male partner will have earned $1.2 million."

Let's say college costs $100,000 (tuition plus opportunity cost of income,
etc). Now let's say instead of spending that $100,000 on college we invested
the money instead at 6% per year returns. That will give you $1,028,572.

The difference between college and no college is about $1,100,000.

My point isn't that college isn't worth it (most of the time I think it is).
My point is that the gains are not as great as a simplistic comparison might
suggest.

On a final note: The analyses comparing college to no college rarely adjust
for things like IQ or emotional intelligence, which should really be the
included so that there's no bias towards college simply because the smarter
more conscientious part of the population decides to attend and complete
college.

~~~
brc
A good point well made.

The problem is that we're all told 'go to college'.

What we're not told is 'go to college and learn a worthwhile skill'.

Personally I think the value of a college degree has dropped enormously while
the cost has risen. Thus these types of calculations are going to look even
skinnier 20 or 30 years down the track.

Again, I'm not agitating to not go to college, but I would counsel any
college-entry age students into asking what the real-world skills they are
getting, and whether it is really worth the cost of admission. Sometimes it's
a binary choice - you can't work in a field without a degree. In other cases,
it's much less cut and dried.

This particularly applies to higher degrees, where the marginal benefit of
each additional qualification drops lower and lower.

~~~
rcfox
> The problem is that we're all told 'go to college'.

> What we're not told is 'go to college and learn a worthwhile skill'.

I almost agree with this. I think that there is some ideal number of
humanities students to be cranked out of universities per year, but we're way
over that. As a result, the demand can't meet the supply. In fact, the demand
might be reduced due to the troubles involved in filtering through the flood
of applicants.

The real problem is that universities behave like anything else: they'd rather
make a quick buck. They admit way more humanities students than are needed
because they can make more money that way. Engineering students cost a lot of
money, they're whiny, and they smell bad. (Disclaimer: I was a whiny
engineering student.) Why would you want more of them when you could surround
yourself with kids who cost less and will pay you tons of money just to get
away from their parents?

~~~
brc
Yes, I kind of agree, but I don't blame the universities. They merely respond
to demand for humanities by teaching them what they want. I don't want to live
in the type of place where students are effectively denied their choice even
if it is a stupid choice looking from a monetary point of view. If kids with
rich parents want to learn greek literature on their parents dime, well, good
luck to them and I hope they get laid with their ability to wear a toga with
panache.

It's up to the students to work out for themselves that they're doing a
pointless thing, and that it won't pay off. I suspect this is partly an
information problem and partly a societal problem - there's too much emphasis
on going to college as a social marker and not enough emphasis of what happens
when you finish.

Maybe there's a good website weekend project in there to do an cost/benefit
analysis of different types of study which calculates the debt, the 1 year, 5
year and 10 year salary ranges for the graduate, and also compares other non-
college trades and vocations for equivalent payoffs.

------
slyall
The trouble is it doesn't compare like with like. College graduates are people
with greater than average IQ and other skills. In the past (just 20 years ago)
when less people went to college they were even more likely to have greater
skills than the average person.

Are there any studies that show the college "premium" for more closely matched
people? Perhaps based on SAT scores. So we could see the premium for a person
with 1000, 1500, 2000 SAT score of going to college vs not.

------
phamilton
Let's compare the lifetime earnings of an engineering degree with a humanities
degree.

I would guess that the difference between a high school grad and an English
major is similar to the difference between an English major and an engineering
major.

------
nwhitehead
I don't buy it. Looking at college-educated versus high-school educated people
is the wrong comparison when advising people whether to go to college or not.
The relevant populations are people like you who went to college and people
like you who decided against college.

------
jjchiw
Maybe in IT college is overrated, but when is something about i don't know let
say medicine.... If I were sick I'll pay the best doctors I could, I won't be
looking for somebody that has a fancy ad or millions of likes or followers or
pluses and does not have a degree in medicine....

Maybe in the verge of death I'll look for a shaman...

Overall my point is that college is not overrated for all the careers. The
article did not focus only on IT....

And IT is not only about coding

------
fallous
How about controlling college grads vs trades. I'd eat my hat if a B.A. in Lit
comes anywhere close to a licensed plumber or electrician.

~~~
brc
You'll generally find the B.A. in Lit doesn't like 'the market'.

Of course, the simple explanation for that is 'the market doesn't like them',
so it's mutual dislike.

This is why you'll generally find the largest agitators for changes away from
market based economies towards controlled economies (read : more 'fair') are
people with the most worthless qualifications. Show me someone who likes
socialism and I'll show you someone who studied a (monetary) value-less
qualification at university.

Of course, it's a crying shame that poets get paid a fraction of reality TV
stars, but that's just a reflection of what society values more.

And that's why plumbers make so much money, because a flushing toilet is about
the most valuable thing in society, especially when yours isn't.

------
Jach
The single-value averages here are worthless. At the very least, control for
degree.

------
tieistoowhite
I don't believe dropping out is necessarily the better option, but the article
doesn't argue why not dropping out is.

The data needs to be adjusted for the fact that "college educated" has become
an entrenched label in society. Without the label, society values a person
much less. That is all the data in the article proves.

~~~
rcfox
Maybe I'm misunderstanding you, but the article uses data to show that society
values college-educated people more, and you want it to adjust for this? What?

~~~
tieistoowhite
Adjusting for society's bias towards the label helps isolate the actual effect
of college.

What I would like to understand is whether college is valuable because society
thinks so or is there something that college does that is unique to it. (and
if the latter is true, is it worth $50k a year?)

~~~
rcfox
Unfortunately, I don't think either of those can be measured empirically.

------
chrisbennet
"Past performance is not a guarantee of future returns." Like real estate, the
value of college may have peaked.

------
absconditus
I think that comparing earnings is missing the point of attending university
or college. If what we want is vocational schools then I think that we should
discuss that instead.

~~~
fallous
Sure, but the argument is debt taken on via college vs economic gain over
employment. There is most assuredly a non-economic value to be gained from
pursuing liberal arts or whatever, but do not confuse that with being able to
pay off that debt load incurred for that education.

~~~
absconditus
What about people who do medical research, which pays very little and often
requires a PhD?

------
pdeuchler
"encouraging them to take a rather more sure route to success"

I think you're preaching to the wrong crowd here

