Young Workers Movement

A small group of economists and education experts argue that college is overrated. They say that many students who go to college today should not be doing so. An article in The New York Times on Sunday laid out the case that these education skeptics make:

“It is true that we need more nanosurgeons than we did 10 to 15 years ago,” said Prof. [Richard] Vedder, founder of the Center for College Affordability and Productivity, a research nonprofit in Washington. “But the numbers are still relatively small compared to the numbers of nurses’ aides we’re going to need. We will need hundreds of thousands of them over the next decade.”

And much of their training, he added, might be feasible outside the college setting.

College degrees are simply not necessary for many jobs…

This argument certainly makes some important points. If nothing else, it’s a good reminder that many colleges are failing at their central mission: turning students into graduates. As a result, some students end up with thousands of dollars in debt and no degree.

But is the lesson of this failure that we should try to lift graduation rates? Or that we should persuade more teenagers not to enroll in college?

I think the answer lies in the most straightforward data of all: the relative pay of college graduates and everyone else. Imagine for a minute that the gap between the pay of college graduates and everyone else had been shrinking in recent years. In that case, you can be certain that Professor Vedder and the other skeptics would be pointing to these numbers as a sign that college degrees were losing their value. But the skeptics tend not to talk very much about the pay gap.

So here are the inflation-adjusted median weekly pay numbers from the Bureau of Labor Statistics for the four main educational-attainment groups, going back to 1979:

As you can see, the real pay of college graduates has risen over the past 25 years. The real pay of every other group has dropped.

This chart makes the comparison even more starkly:

Relative to everyone else, college graduates have never done better than they are doing right now. In absolute terms, of course, they too have been hurt by the deep recession that began in late 2007. But they have suffered much less, on average, than workers with less education. They have been less likely to lose their jobs, and their paychecks have survived the downturn much better.

It’s theoretically conceivable that these trends have nothing to do with the actual education that college students receive. Perhaps graduates gain little or nothing from college that they didn’t already know — but the economy has been changing in ways that favor the kinds of people who enroll in college and make it through. In that case, the charts above would say nothing about the college.

As it happens, though, labor economists have spent years trying to answer this exact question, devising careful studies to see whether students actually benefit from college. The answer, in a nutshell, is that they do. This is a nice example of Ockham’s Razor: the simplest explanation is often the correct one.

To put it another way, if you were an 18-year-old trying to decide whether to go college in the fall, would you be willing to bet your future on the idea that the charts above are simply reflecting a big coincidence?