Thursday, October 06, 2005

Yglesias on College for All

Matt weighs in:
Take any given poor kid, and you could give that kid a real boost in life by putting him through college. But he gets that boost precisely because a large number of people don't go to college, so he winds up having a competitive advantage in the labor market. If everyone went to college, then the mere fact of having a bachelor's degree wouldn't count for anything. Instead, the advantage would either go to the people who got into the most selective colleges (incidentally, check out my friend Matt Quirk's excellent article on how more-and-more schools are rigging the financial aid game to make it harder for poor kids to get in) or else you'd see advanced degrees become the "new college," separating the economic elite from the rest.

That would still be worth doing if you thought there was some reason that improving everyone's educational credentials would lift living standards overall, but there's little reason to think that. Already, the reverse seems to be true and lots of job categories are (informally) reserved for college graduates as a screening device even though doing the job doesn't actually require anything that's taught in college.
Isaac has blogged about this before, so I'll try not to repeat him. (Though it seems to me that there were more than just that one post, but I seem incapable of finding them!) odd thing is that last December Yglesias wrote:
David Adesnik asks an interesting question -- what if we did something good and liberal and made obtaining a college degree near-universal? By and large, I think this would be an excellent thing for many of the reasons David cites. This would have a dynamic effect on the sort of jobs that exist in America and allow a larger proportion of the population to have better jobs.
But now he has come around to the hard-nosed tough-minded liberal view (which is always the more fun view to have, anyway.)

If the signaling model of education is more important (than the human capital model), then a plan to put everyone in college would be bad for a couple reasons. One is that, in such a model, no one likes education. It's just that the smart kids dislike it a bit less than the not-so-smart kids. In a signaling equilibrium, some people have chosen not to educate because the benefit of a higher-paying job is not as great as the cost of actually going to college. (Note that it may not be that some people just don't like college, but it is very expensive in terms of direct and opportunity costs.) A better reason is that removing the signaling function of education would remove any benefit to education whatsoever.

Okay, so there is some benefit to education. It builds human capital. (You can formulate signaling models to incorporate human capital and you get basically the same results as the unaugmented signaling models.) Or does it? Certainly, I will emerge from four years at Swarthmore with lots of new knowledge. (Mostly, pretty arcane math. We learn all the useful stuff in the first year.) How many jobs does that new knowledge make me more productive at doing? Not many, but it does make me more productive at the job I want to do. But random person doesn't care about that job. College isn't going to make random person care about that job. Moreover, we don't really need more people doing that job. So maybe random person will take the government up on its offer of four more years of education (maybe it'll be compulsory?), but if they then go do something uncorrelated, that's a waste of money.

There are always arguments to make that the kinds of jobs people want and will be available will change but I think that's all too much second-order thinking. The first-order effect is that people who go into jobs that don't require a liberal arts education will have one. Now, more easily available *technical* education is something that could have a very good effect. As Alan Greenspan has argued, the reason that low-skill and high-skill wages have diverged is that not enough labor has moved from low-skill jobs to high-skill jobs. But expanding your usual college education won't do much about that.

3 Comments:

Blogger Isaac said...

Yes, more vocational training. More focus on skills. Plumbers being the classic example....Truck drivers don't do so badly either, and it is actually quite difficult (have you ever tried backing up a fourty foot trailer into a loading dock?).

1:06 AM  
Blogger Isaac said...

Other posts on this are here, here, and here.

1:16 AM  
Blogger henry said...

And landscapers now make $30-$40 an hour working in rich neighborhoods...like the one I lived in this summer. So I guess the point is that law and medicine are not the only ways to money anymore.

4:11 AM  

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