Where's The Skill Upgrades

Joseph G. Antolji, Prashant Bharadwaj, and Fabian Lange take a look at one of the most pressing questions we face -- given the growing rewards to educational attainment, how come Americans have shown so little proclivity to respond to these incentives by expanding the proportion of educated people? In other words, skill-biased technological change should be leading to an increase in the proportion of people who graduate from college. Instead, it's leading to an increasing wage gap between graduates and non-graduates as the proportion stays flat.

One leading possible explanation is that "Research summarized in Cunha and Heckman (2007) suggests that part of the explanation might be that parental investment during early childhood shapes the potential to acquire additional skills later in life." As Sara Mead says the likeliest cure is to "improve early childhood and elementary school education, and also improve education and support for parents, so that they understand the economic realities facing their children and have the resouces and skills to support their children's learning in early childhood and beyond."

I think that in recent years a lot of liberals have kind of wandered down a dead end of insisting that we should ignore the educational component to growing inequality. The way this went was that first liberals started complaining about growing inequality. Then conservatives started gesturing vaguely at skill-biased technological change as the culprit and saying there's nothing to be done. So in response progressives have shown that a substantial portion of growing inequality (specifically the inequality at the very top, the takeoff of the top 1, top 0.1, and top 0.01 percents) doesn't seem to be something we can explain in these terms. Which is true.

But then again the education picture does explain a substantial amount. And educational attainment isn't a fixed metaphysical element of the universe, better policies would get a better-educated population. One reason why Europe hasn't seen as much growth in inequality is that in western European countries the proportion of people finishing college has kept climbing steadily. It used to be the case that more Americans than Europeans went to college, and most Americans still have a mental image of that being the case, but it's generally not true any more and it's helped Europe maintain a relatively equitable distribution of income as well as laying the groundwork for a generally high standard of living.

Comments

Rapidly rising tuition costs probably aren't helping encourage college enrollment. Don't some of the European countries pick up most of the tab for college?

Posted by demisod | May 12, 2008 1:56 PM

Matt, you mentioned Heckman's paper, but then you really didn't address it.

The way my roomie (one of Heckman's RAs) described the findings is that you have an extremely narrow window to determine educational achievement. In fact, the window is something like two or three years (from birth to then). After that, you're basically fucked.

Talking about how many Euros or Americans end up going to college is, then, irrelevant. The point is that if you don't receive the right treatment at the beginning of your life, there is almost nothing you can do to remedy this.

Alex went so far as to say that Heckman et al. were prepared to receive tons of flak for this paper, because the conclusion from the paper is that retraining centers and vouchers and essentially every pet project on the right and left could be conceivably canceled. Furthermore, the implications (you don't need to be a nut like Sailer to see this) of family breakdown and single parent and working parent households are even greater than before under this model.

Posted by Greg | May 12, 2008 2:07 PM

Hell, I'm sure the increased availability of credit and the market overall over the past years has had a part. Kids can have all the things they want without some fancy degree or having to move away from the place they were born and raised. Working at the cheese plant for $14/hr, or better yet, a decent construction job pays enough to get that snow mobile and leaves enough to spend at the bar three days a week, etc...

Posted by bubba | May 12, 2008 2:14 PM

Don't some of the European countries pick up most of the tab for college?

Yes, in Germany for example, when you are 10 they make a decision, either you are sent to Gymnasium and you can go onto University for free, or it's off to trade school. If you have a rough 10th year, your parents get divorced, dad goes into rehab, etc. it doesn't matter. All decisions are, for all intents and purposes, final.

In other countries it's exam driven, it would be equivalent to saying education is free to everyone who scored 1300 or better on their SATs. If you scored below 1300 - well, the world needs ditch digger too.

For those of us who do poorly on standardised tests or are late bloomers - we would be totally f**ked.

Posted by jmo | May 12, 2008 2:18 PM

MY:
I think Krugman would disagree with you to an extent. Look at CEO salaries. In Europe, they aren't nearly as out of whack as they are here in the US.

Posted by Joe Klein's conscience | May 12, 2008 2:20 PM

There's also the issue that we keep importing more poor and uneducated people, the average illegal immigrant from Mexico has less than a high school education.

Posted by beowulf | May 12, 2008 2:22 PM

I forgot to add that Krugman discusses this issue(sort of) in his latest book, Conscience of a Liberal

Posted by Joe Klein's conscience | May 12, 2008 2:25 PM

I also think we need to look at the marginal case.

We obviously have people who, if they worked 5% harder, would be able to graduate from High School. We also have college students who, if they spent 5% less time with the Bong/xbox/funnel and 5% more time on class work, would make it to graduation.

The question is, as the cost of each hour of High School and College leisure time rises in terms to forgone lifetime earnings, one would expect more people to buckel down. That doesn't seem to be the case.

Posted by jmo | May 12, 2008 2:29 PM

I had a professional career in the Chicago area. My 2 children are doing the same. . . We retired and spend our Summers in a small town in Wisconsin. . . A majority of our friends here are retired school teachers or with pensions from other government jobs. They are generally the financial "elites" in the region. . .

Retired "working class people" had a OK life - own their houses and can live on small savings or private pension and social security. . .

The children of both groups - if they remain in the area - have less rosy economic futures. . . Wages are low and housing costs and expenses are increasing. Both parents must work to get ahead. . . The children of the "non-elites" do not go to college and are reluctant to leave the easy lifestyles they are used to (hunting, fishing, low pressure at work etc.) Children of the "elites" go to college and become teachers or look for other government work. But, those wages have not kept pace with costs and they live more modestly than their parents did. . . The payoff for them will come when they retire at age 55 with both receiving their government pensions.

Posted by Wisconsin Reader | May 12, 2008 2:37 PM

Important things to think about are what do people study in college? I don't think anyone is saying we need more liberal arts majors. I'm guessing the education people should be looking for is technical education that allows for people getting work in medical or computer fields. So in a sense we are looking at vocational training and should be looking at post high school education as job training - so apprentice programs should also be looked at. The problem for people is what field to train in. At one time data base programming was considered a fail safe as was word processing a long time ago. Fields that look good now may not be good in 10 years. The problem with retraining is time - to get some kind of certification in medical/computer/techie fields requires a large time commitment (not to mention cost) for someone who must already be supporting themselves.

Another problem is that there seems to be little on the job training at this time. No "will train the right person" ads. Employers want people to hit the ground running on day one. This is probably because they have determined that it is not cost effective to train people that are going to be laid off with the business cycle or who will take their new found skills and market them to the next emplosyer.

Posted by Cathy | May 12, 2008 2:57 PM

Barbie already explained this for us.
"Math is hard. Lets go shopping!"

Posted by Matt B | May 12, 2008 2:59 PM

"given the growing rewards to educational attainment, how come Americans have shown so little proclivity to respond to these incentives by expanding the proportion of educated people? "

Because Americans hate smarty pants nerds. Next question.

Posted by Ron | May 12, 2008 3:01 PM

I think Europe also does a lot more to support parents of young children, and provide early childhood education, than we do, as well as supporting college students. The former is probably more important, though the latter matters too--we're telling young people who want to go to college that they need to take on tens of thousands of dollars in debt. The costs are much higher for those who go on to graduate or professional school. This just makes no sense. We need to be offering much more support to youth on both ends of the age spectrum (0-3 years and college age).

Posted by beckya57 | May 12, 2008 3:03 PM

Ron,

I think there is also an interesting bifurcation. On the one hand we have the anti-intellectuals who are opposed to education and "smarty pants nerds" as a matter of principle. On the other hand we have the hyper-intellectuals, the ones who get an MA in Lit Crit and can't understand why they can't get a job at Starbucks.

Then we have those who major in economics and get an MS in Finance and are making 300k by the time they are 28.

Posted by jmo | May 12, 2008 3:10 PM

So here's a question: Why do we in the US consistently undervalue child care, education, and high-touch, mid-skill health care workers, when there is almost unanimous consensus that these "personal care" professions have enormous impact on society? There's something weird going on, some sort of systematic flaw that we're not seeing correctly.

I can think of three things that may have a big impact:

1) None of these jobs is fun, and the rewards that do exist accrue only over long periods of time. Not a good thing in a society devoted to near-instant gratification.

2) All of these jobs have heavy, even oppressive, institutional components. It makes it very hard to innovate.

3) There's no technology (yet) that can improve personal-care productivity. Indeed, I think one of the reasons that these professions look so bad is that the rest of the economy has been able to adopt all kinds of productivity-enhancers, while personal-care fields are pretty much back where they were in the 1950's, except with less patient, less disciplined clients.

As for education specifically, I'm much less concerned about college graduation rates than I am about our inability to put credible retraining programs in place. The biggest problem: until you're absolutely destitute, it's simply not possible to receive intensive training and support your family at the same time. (Of course, when you're destitute, you are, by definition, not supporting your family. Not only do you have nothing to lose but you also become elegible for a vast array of government goodies.)

We'd do a lot better if we found a way to either allow people to retrain and hold down their current job, or subsidize the whole family during the retraining process. The latter is really expensive. The former is missing some key technology.

Posted by TheRadicalModerate | May 12, 2008 3:15 PM

I teach developmental mathematics (remedial) at a four year college. One of the greatest barriers to educational attainment in this country is the culture in grades 7 - 12. At many public schools, students can pass without doing much more than showing up and behaving themselves. Of course, many students learn to work hard, excel, and are prepared for college. But, many do not. Often, their parents support these attitudes. They do not believe that schools should be able to make demands on their students that cause them anxiety or that prevent them from working at a job to pay for a car and insurance or clothes. Teachers are not empowered to fail students. They do not have the backing of the administration or community to hold students accountable.

Because these students are not held accountable, they do not develop an "academic work ethic." They believe that they are entitled to have a good time in high school. They believe that they will be able to learn everything they need to get a high paying career if they ever decide to go to college. Unfortunately, remedial work takes time and money. Most students in this situation end up in non-quantitative majors. Their future jobs pay poorly and, with their debt, they end up further behind economically.

Perhaps we can make a difference in student attitudes by investing in pre-school education and parent education. I'm all for it. But the harder fix is to convince a large group of Americans that exposure to education is not sufficient. Students must also do the work required to learn.

Posted by Laura | May 12, 2008 3:23 PM

Is MY twinking out in this article? Maybe Americans just need to level grind a bit more...

Posted by PowerGamer | May 12, 2008 3:35 PM

"There's also the issue that we keep importing more poor and uneducated people, the average illegal immigrant from Mexico has less than a high school education."

The average illegal immigrant from Mexico is a 4th grade dropout, IIRC. This of course is the elephant in the room that Matt's girlfriend somehow can't see.

Posted by Fred | May 12, 2008 3:45 PM

So here's a question: Why do we in the US consistently undervalue child care, education, and high-touch, mid-skill health care workers, when there is almost unanimous consensus that these "personal care" professions have enormous impact on society? There's something weird going on, some sort of systematic flaw that we're not seeing correctly.

Oddly enough, all of these were historically done primarily by women. Draw your own conclusions.

Posted by BP Beckley | May 12, 2008 3:54 PM

The Radical Moderate,

No offense intended, but you should take that last post of yours back the drawing board. It is vague to the point of incoherence. Try to focus on something specific and make a cogent argument about it. Forget the sweepingly vague adjectival phrase "personal care professions". What specific fields are you referring to? What do you think the problems are with them? Are you sure there have been no examples of innovation (technological or otherwise) in these fields? Scrap vague phrases such as "heavy, even oppressive, institutional components" and be specific.

Thanks.

Posted by Fred | May 12, 2008 3:58 PM

There's another piece missing too - from here (pdf):

==
Demand growth for college workers appears to have slowed in the 1990s, as indicated by
the negative coefficient on the trend interacted with 1992. Given the rapid spread of information
technology and work-place reorganization in the 1990s and beyond, this finding would appear to
be at odds with the skill-biased technological change explanation. But a resolution exists. As the college educated group became a larger share of the labor force, it also became more
heterogeneous. Demand for those who graduated from more selective institutions as well as
those with post-B.A. degrees is still soaring and they are doing spectacularly well. But demand
for the remaining group is less strong and they are not doing as well.
==

Which is to say, there is a lot of demand for high-end education (signals?) in this country - going to college doesn't get you the premium, going to a top 50 college gets you the premium; why hasn't Harvard increased the size of it's freshman class to accommodate this?

What's going on with post-BA education is a seperate matter entirely, I think.

Posted by wilye | May 12, 2008 4:04 PM

I'm sure it's going to happen: colleges have been expanding. Certainly here in Boston, that expansion seems to be very rapid: Harvard is buying up a large chunk of Allston; even the minor colleges like Wheelock and Simmons are putting up new buildings; Berklee just kicked off a $50M fundraising effort.

But then we're still dealing with the kids of the baby boomers. I believe the peak of that demographic boom is just hitting colleges now, and then the college-age cohort is going to shrink over the next few years. I doubt that any colleges are going to shrink or go out of business: so the likely outcome is that the college-attending proportion of those smaller age cohorts will increase (together with a drop in the real cost of college education, as increased supply confronts reduced demand).

I'd have to check my figures to see if this argument makes sense: but it seems possible that college expansion has been going just about as fast as it can - raising money, putting up buildings, and hiring academics takes time - and that it has barely kept pace with the demographics.

Posted by Richard Cownie | May 12, 2008 4:08 PM

Cunha and Heckman rely on relatively small studies like the Perry preschool project.

http://jenni.uchicago.edu/human-inequality/papers/inv-young-rep_all_2007-01-31b_mms.pdf

http://www.peelearlyyears.com/pdf/Research/INTERNATIONAL%20Early%20Years/Perry%20Project.pdf

The perry preschool project apparently worked alot better than head start.

To be effective, the perry project people say you need teachers with BA degrees, a 8:1 student teacher ratio, instruction for two years when kids are 3 and 4 for at least 2.5 hours a day.

Benefits of the perry preschool project were not mainly academic skills. The reduction of criminality was the largest social benefit by far according to the perry people.

Some of the effects are odd. At age 27, 40% of the women from the study were married versus 8% of the control group.

Posted by lemmy caution | May 12, 2008 4:13 PM

Somewhat apropos: I don't think Matt has plugged it here yet, but there's a great essay in the June Atlantic by "Professor X", an anonymous adjunct prof of English at a lower-tier liberal arts college and also at a community college. Professor X writes about how his red pen is where the meme that college is a path to economic advancement for everyone meets the reality that everyone doesn't have the chops for it.

Posted by Fred | May 12, 2008 4:17 PM

The biggest problem: until you're absolutely destitute, it's simply not possible to receive intensive training and support your family at the same time.

You have to really hit complete rock bottom before you qualify for most retraining programs. Someone who works full-time but doesn't make much money is screwed if they want to upgrade their skills. It's do-able, but it's more difficult than necessary when you consider the tut-tutting workers receive that they just need to 'upgrade their skills' as if most don't realize exactly that.

One of the greatest barriers to educational attainment in this country is the culture in grades 7 - 12. At many public schools, students can pass without doing much more than showing up and behaving themselves

I couldn't agree more- it's shocking how shitty even our 'good' high school are. Outside select affluent areas, public secondary education in this country is apalling. I went to a decent public high school and did well (ie-did the work expected of me), yet I was basically unprepared for college. If we wanted to upgrade secondary education to high standards, it could be done.

The thinking among some elites seem to be that the smart ones will make it through the system and do just fine. The average ones may or may not get by and do well enough. Everyone else will get just enough 'education' to do the menial shit jobs like working in call centers and sitting your ass in a cubicle for 8 hours without revolting, which seems to be the universal result of public education.

Posted by Waingro | May 12, 2008 4:27 PM

Laura (3:23 PM) was on the edge of something, but didn't quite nail it. The critical factor has, I believe, been that parents have taken the wrong lesson. (And, to be accurate, have been taking it for 30-40 years in increasing numbers.)

The understanding of an enormous number of parents is not that education is valuable, it is that having a degree is valuable. As a result, the emphasis in the schools (driven by parental demand, especially at the high school level) is on getting as many children as possible thru to a degree. Whether they actually learn anything has become very, very secondary.

As a result, you have people in college who cannot compose a term paper (or sometimes even a gramatical sentence) or do basic math. But they have that high school degree.

Unfortunately, employers have noticed. So having a degree is not the benefit that it once was. What employers want is some demonstration that the potential employee actually knows something -- which a degree no longer proves.

Posted by wj | May 12, 2008 4:30 PM

I think it is cultural. I think it is a toxic blend of the following:

anti-intellectualism- both the standard hostility toward 'elites' and the fear lots of kids have about not being 'cool'

anti-science and math attitudes- from the religious community on the right and the liberal arts community on the left

the self-esteem movement- kids weren't pushed to do stuff that is hard

the idea that your job should be fulfilling and enjoyable, instead of economically viable- Most people don't get paid much to do work that is creative and fun. If you want to be able to support yourself, your family, and actually retire, you better get used to doing work that is difficult, boring, comes with crushing responsibility, or is all of the above.

Posted by Z | May 12, 2008 4:31 PM

Much of what Laura says echoes my sister's experience. She teaches middle-school math in an mid-to-upper-middle class district in Texas. Her two greatest frustations are teaching to the test and administrative pandering to parents. The teacher is always wrong, the parent is always right.

Both my sister and my mother - a retired schoolteacher - have long felt that vocational schools need to be brough back into the system. Many students would be far better served in high school if they were taught trade skills rather than be held to a college curriculum. Instead, it's all teach to the test, regardless of individual student goals.

Going back to behavior, I couldn't ignore a telling situation two weekends back. A band conference was held here in Chicago, bringing in high school students from Canada and the upper Midwest. At a jazz club after work, three different band groups were brought in for burgers and cokes, the club staggering the reservations. Two of the groups were remarkably quiet and attentive to the musicians. A third talked over the music, both to each other and on their cell phones. Guess which group was not from Canada (Michican, in fact). Maybe it was just a coincidence, but the contrast was astonishing between the Canadians and Americans, and not to our credit.

Posted by Judy | May 12, 2008 4:39 PM

Education should be excellent and inexpensive. However, a lot of college-educated liberals don't grasp that college isn't for everybody. In addition to money, college requires a high tolerance for bullshit. Also patience, discipline, well developed social skills, sitting still for many hours, resistance to alcoholism, raw intelligence and a healthy aversion to World of Warcraft.

I think too many liberals simply accept a market where people need a college degree to afford their own apartment, and conclude that more people need to go to college. Instead, I think we should be saying, "Wait a minute! You shouldn't have to go to college to afford your own apartment!"

Posted by aatos | May 12, 2008 5:00 PM

aatos,

I really do hope you don't think conservatives, by extension, believe the opposite.

The general principle of politics applies to education more than, arguably, anything:

People want low taxes [on themselves] and high government spending.

The only way education will ever be "inexpensive" is if it's funded by massive amounts of public funds. Which, of course, is not inexpensive at all; however, if you are middle class (or poor), then such practices would, indeed, be redistributive.

Posted by Greg | May 12, 2008 5:17 PM

1)You people miss the primary point: Education in this country is disfunctional and much of it is worthless.

2) Why should someone invest 4 years of his life -- and $160,000 -- for a degree that will lose most of its value within 4 years after graduation?

3) I'm not just talking liberal arts. Look at all the people in the late 1990s that got computer science degrees -- only to be tossed out on the streets in 2001. With the survivors competing with low wage H1B imported workers or watching their jobs disappear to India.

4) People respond to incentives. And the message they've gotten is that Michael Dell will let you make him a $10 Billion -- and will then fire your ass so he can move the system you developed over to China. Probably before you have paid off those educational loans you ran up.

And the same is true of most of our other plutocrats.

5) NO university teaches you how to survive and prosper in today's world. NO university teaches you shit about today's world -- who has the wealth, what they're doing to get more, and how that will change the world in the next 10 years.
NO university teaches you how to acquire wealth of your own.

That is why our most successful people are college dropouts.

6) If you are 40 years old and laid off, go to college, get a degree and see what it fucking buys you.

Nothing.

Go to college and get a Masters or PhD -- and see how big a raise you get.

7) Corporations don't ask for degrees because the associated education has any value.

They ask for degrees because the easiest way to create a dependent corporate drone who will work his ass off for nothing is to saddle him with a lot of debt acquiring a piece of paper that is worthless if he doesn't go to work for the corporation.

People really have a hard time accepting that they've wasted 4 years of their life on a worthless task. So they will go to great lengths to try to get some kind of return on that investment --even though the corporate rat race they then enter will doom most of them in the long run.

Posted by Don Williams | May 12, 2008 5:26 PM

Greg,

Have you ever considered that when you spend "massive amounts of public funds" on something, prices for that something tend to go up? See health care and education for a couple of examples.

Posted by Fred | May 12, 2008 5:27 PM

Don,

I don't know what world you're living in. Just because your degree was worthless and you haven't been able to be successful doesn't mean it hasn't worked out for the majority.

I for one was able to leverage my no-name education into a very lucrative career doing what I enjoy.

Posted by Jmo | May 12, 2008 5:43 PM

Education has worked out really well for me, also. But it only worked out really well for me once I ditched my liberal arts degree and got a new one in mathematics/science.

Posted by Z | May 12, 2008 5:51 PM

You have to think about the question of the percentage of people who get college degrees as a series of filter. The first filter is graduating from high school.

Nobel Laureate James Heckman's study of high school drop-out rates shows that the drop-out rate, which fell consistently through the first 7 decades of the 20th Century, hit bottom at about 20% around 1970. Since then, the dropout rate has grown to about 25%.

According to Heckman, the racial ratios in high school dropout rates, after narrowing in the 1960s, have remained consistent since about 1972, with NonAsian Minorities (NAMs) dropping out at about twice the rate of whites. By my calculation, the increase in the NAM share of the population accounts for the majority of the increase in the dropout rate since the early 1970s.

For documentation and links, see:

http://www.vdare.com/Sailer/080101_dropout.htm

Posted by Steve Sailer | May 12, 2008 5:58 PM

Re Jmo's comment "doesn't mean it hasn't worked out for the majority "
------------
You mean, like this?

http://en.wikipedia.org/wiki/Image:United_States_Income_Distribution_1967-2003.svg

I'm glad things worked out for you. But to suggest that what worked for you -- or what worked 20 or 30 years ago will work in the future - - or that the majority of today's college graduates will be prospering 10 years from now -- shows that maybe your education was
short on the analysis part.

Posted by Don Williams | May 12, 2008 5:59 PM

The second filter is graduating from college.

According to Nobelist James Heckman, the college graduation rate has been improving, reaching 24 percent for men and 36 percent for women born in 1980. But even this growth has been tailing off lately as the high school graduation slump feeds through. Heckman comments:

"The slowdown in the high school graduation rate accounts for a substantial portion of the recent slowdown in the growth of college educated workers in the U.S. workforce… This slowdown is not due to a decline in rates of college attendance among those who graduate high school."

http://www.vdare.com/Sailer/080101_dropout.htm

Posted by Steve Sailer | May 12, 2008 6:03 PM

Don, many of us didn't go to get our degrees because it would teach us how to get wealth. We did it because it would help us do what we wanted to do with our lives.

It doesn't take a college degree to save up your money, take out a business loan, and work your butt off making money running a pizza restaurant. However, if you're interested in doing something else with your life or want to take an interest in small business enterprise to "the next level," a degree can be very useful.

the idea that your job should be fulfilling and enjoyable, instead of economically viable

I think this is a big issue for a lot of us in the upper middle class: if I had grown up with the mindset that work was a means to an end, or that what I was doing wasn't the intellectual and cultural focus of my life, I'd have likely ended up doing something a lot more lucrative. On the other hand, you'd have to deal with having a person as your surgeon who chose the profession because it was a good living that he knew there'd always be a demand for and for which extreme hard work was rewarded, rather than because I had a passion for it. I'm not sure how you, the patient, would feel about that.

Posted by Tyro | May 12, 2008 6:08 PM

Don,

Yes, stupid slackers did well when the rest of the world lay in ruins following WWII. Now, it requires more of an effort to prosper. People can't expect to coast along toward a middle class life, they now have to work at it.

Those that value hard work and education are doing better and better every year. Those that denigrate achievement, will and should, continue to fall behind.

Posted by Jmo | May 12, 2008 6:11 PM

In short, the US is probably pretty close to getting about as many women through college (36%) as have IQs high enough that spending years in college is a good investment of their time relative to the risks of wasting years in college without ever getting a diploma. (One seldom mentioned cost of America's fixation on college is that lots and lots of people spend years diddling around in college without graduating, years that they could have spent earning money and building career skills.)

On the other hand, we appear to be doing a weaker job of getting moderate IQ men through to college degrees (only 24% of males born in the U.S. in 1980 got a diploma). This is partly because young men with strong backs can earn more money than young women in many blue collar trades. On the other hand, I suspect that the increasingly feminized and prissy culture of schools and colleges interacts badly with the increasingly macho pop youth culture (as exemplified by the sales of Grand Theft Auto IV).

Posted by Steve Sailer | May 12, 2008 6:14 PM

Re: What employers want is some demonstration that the potential employee actually knows something -- which a degree no longer proves.

Did a degree ever prove that a person knew something of specific use to an employer? A professional (medical, law, etc.) degree, maybe. But outside those degrees, I'd wagre that 99% of what is taught in college is of no use in the working world.

Re: Look at all the people in the late 1990s that got computer science degrees -- only to be tossed out on the streets in 2001.

Most of those people got rehired after the tech bust ended. And most, I think you will find, are doing OK. Of course dreams of becoming an instant millionaire through the IPO of Pets.Com have fizzled, but that's just the way it goes.

Re: NO university teaches you how to survive and prosper in today's world.

No university ever did that; it was never conceived that a university should do that. What my mother called "The School of Hard Knocks" is where you get that training.

Posted by JonF | May 12, 2008 6:25 PM

It used to be the case that more Americans than Europeans went to college, and most Americans still have a mental image of that being the case, but it's generally not true any more and it's helped Europe maintain a relatively equitable distribution of income as well as laying the groundwork for a generally high standard of living.

I would be interested in knowing if there is any evidence for either of these two propositions, i.e. (1) the proportion of Europeans getting the equivalent of a college education is approaching that in the U.S., and (2) this is the cause of Europe's maintaining a more equitable distribution of income. My intuition tells me that that the first is probably not true to any significant extent. As for the second, surely the European social democratic tradition as implemented through social welfare and taxation systems has a lot more to do with it than the percentage of Europeans attending colleges. I think that second proposition is highly doubtful.

Posted by gordonminor | May 12, 2008 6:26 PM

"Educational romanticism consists of the belief that just about all children who are not doing well in school have the potential to do much better. Correlatively, educational romantics believe that the academic achievement of children is determined mainly by the opportunities they receive; that innate intellectual limits (if they exist at all) play a minor role; and that the current K-12 schools have huge room for improvement.

"Educational romanticism characterizes reformers of both Left and Right, though in different ways. Educational romantics of the Left focus on race, class, and gender. It is children of color, children of poor parents, and girls whose performance is artificially depressed, and their academic achievement will blossom as soon as they are liberated from the racism, classism, and sexism embedded in American education. Those of the Right see public education as an ineffectual monopoly, and think that educational achievement will blossom when school choice liberates children from politically correct curricula and obdurate teachers’ unions.

"In public discourse, the leading symptom of educational romanticism is silence on the role of intellectual limits even when the topic screams for their discussion. Try to think of the last time you encountered a news story that mentioned low intellectual ability as the reason why some students do not perform at grade level. I doubt if you can. Whether analyzed by the news media, school superintendents, or politicians, the problems facing low-performing students are always that they have come from disadvantaged backgrounds, or have gone to bad schools, or grown up in peer cultures that do not value educational achievement. The problem is never that they just aren’t smart enough.

"The apotheosis of educational romanticism occurred on January 8, 2002, when a Republican president of the United States, surrounded by approving legislators from both parties, signed into law the No Child Left Behind Act, which had this as the Statement of Purpose for its key title:

"'The purpose of this title is to ensure that all children have a fair, equal, and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging State academic achievement standards and state academic assessments.'"

http://www.newcriterion.com/articles.cfm/The-age-of-educational-romanticism-3835

Posted by Steve Sailer | May 12, 2008 6:27 PM

Fred--

Forget the sweepingly vague adjectival phrase "personal care professions". What specific fields are you referring to?

Specifically:

1) Elementary and secondary teaching. (Maxes out at about $90K/year if you're really, really lucky.)

2) Pre-K child care--aka "parenting". It has to be provided by somebody, or you get all the nastiness that was described in this post. It can either be provided by parents or by hired caregivers. The fact that lots of parents decide that it's economically a better deal for both of them to work rather than one of them taking care of little kids says something about the market price for child care, doesn't it?

3) Nursing.

4) Low-tech healthcare positions like PT.

5) Elder care.

What do you think the problems are with them?

The problems are that these are occupations which pay relatively little but which have enormous impact on overall social quality. That's a weird disconnect--usually things that have high value to society pay pretty well. So we're either all kidding ourselves and we don't really care about this stuff, or something odd is happening.

Are you sure there have been no examples of innovation (technological or otherwise) in these fields?

Well, maybe a better statement would be that nothing has come along to revolutionize productivity, the way it has for lots of other fields.

Teacher productivity hasn't really budged for half a century and bad things happen when you try to make it do so. (When was the last time that increasing class size worked out well? If productivity were increasing, that would be where you'd see it.) I don't have stats on nursing, but I'd be surprised if the patient-to-nurse ratio had more than doubled in the last 50 years. That's a pretty modest productivity increase. As for child care, nothing has changed at all: Two kids and you're hopelessly busy, three kids and you're insane, more than three kids and you know longer even know that you're insane.

Please note that, paradoxically, high productivity is the way to create high-earning professions. Even though you reduce overall employment in the field, the people that are employed are earning more. The common thread with all of these professions is that there simply isn't a technology that will improve the productivity of human-to-human interactions. That's kinda good, in a way, but it doesn't do much for improving the quality of these essential services. That's a problem.

Reading back over this, it may be as incoherent as my first try. But hey, if you can't be clear, at least be verbose, right?

Posted by TheRadicalModerate | May 12, 2008 6:27 PM

TheRadicalModerate:

3) Nursing.

4) Low-tech healthcare positions like PT.

No offence, but you obviously don't know anything about the current market for Physical Therapists or Nurses. Just as an example the referral bonus for an ER nurse is currently $10k.

Seriously, if you know any send them my way, we can split the money 50/50.

As another example, the current union contacts at Dana Farber in Boston would pay a nurse with 15 years experience 140k.

Posted by Jmo | May 12, 2008 6:40 PM

Tyro,

As a patient, I don't really care if the surgeon loves surgery. I care if he or she is competent at it.

I think passion is overrated and largely a function of personality. Some people are just optimistic and passionate, and that is just the way they are. They can get really excited about anything.

I really don't think most people are like that. Even if your job seems fun and interesting, at first, eventually it becomes work. I think the people pushing the idea that we should 'live our passion' are on X. I think your best bet is to find a job you don't mind, feel reasonably good about, and that makes good money.

Posted by Z | May 12, 2008 6:42 PM

1) Re the declining value of a college educatin, See, e.g., Paul Krugman's article on how income gains are not going to college graduates but to a small group of oligarchs -- based more on power relationships than on education:

http://select.nytimes.com/2006/02/27/opinion/27krugman.html?_r=1&hp&oref=slogin

b) See this International Herald Tribune article on the lagging value of a college education.
http://www.iht.com/articles/2005/01/13/business/degree.php

Money quote:

"If I may speak somewhat loosely, there continues to be rising demand for people who have very strong cognitive, managerial and communications skills," Autor said. "The vast middle, whether they are college educated or not, are not in that upper category of cognitive elite. The elite is college educated, but not all the college educated are those people."

c) This November 2006 Atlantic article noted that the wage premium between college graduates and high school graduates is much lower if you take out people at the high end of the income scale (hedge fund managers,etc) and look at the broad middle.
http://www.theatlantic.com/doc/200611/crook-college

d) In their 2006 article, "Earnings Premium for Skilled Workers Down Sharply in Recent Years",
Lawrence Mishel and Jared Bernstein (of the Economic Policy Institute) noted that:

"according to the ERP's own data, the wage premium for skill has contracted sharply over this business cycle. Since 2000, the real earnings of college-educated workers (those with bachelor's degrees) have fallen quite steeply, while the earnings of high-school graduates have gone up. So according to Bernanke's and the ERP's logic, such results would suggest that, since 2000, the supply of college graduates (typically labeled "skilled workers" in this debate) has grown faster than employers' need for them, and that the supply of high-school graduates ("less-skilled workers") has not kept up with demand. Obviously, such a trend undermines claims that it's the skill level of U.S. workers that is the chief factor behind the growth in inequality."

Ref: http://www.mindfully.org/Reform/2006/Earnings-Premium-Down22feb06.htm

Posted by Don Williams | May 12, 2008 6:47 PM

Steve Sailer,

The only thing that is 'increasingly feminized and prissy' in the 'culture of schools and colleges' is the woman who are increasingly attending schools and colleges. The difference between today and yesteryear is that 'civilized' men are no longer considered to be 'real' men. The 'savage brutes' viewed disdainfully back in the day are now the 'real' men of today. It's not the universities fault that men have developed an increasingly warped view of their manhood.

Posted by Z | May 12, 2008 6:53 PM

Money quote from Harold Meyerson's recent article
"The Middle is Falling Out of the Economy"

"It's important to realize that in our new post-egalitarian America education is no longer the magic carpet to prosperity. Elite education is. As my friend Wally Knox, the former chairman of the Revenue and Taxation Committee of the California State Assembly has noted, higher education today stratifies us more than it equalizes us. The 50 or so elite colleges and universities have not expanded in size over the past half-century. There's been a huge expansion, though, in the number and size of colleges generally. College graduations almost quadrupled between 1960 and 2003. Again, though, the benefits of college accrue chiefly to the graduates of the better schools. In inflation-adjusted dollars, the paychecks of 60 percent of college graduates are lower today than they were in 1960. Worse yet, Knox concludes, "one sixth of male college graduates earn less today than the least paid high school graduates of the late 1960s."

Ref: http://www.prospect.org/cs/articles?article=the_middle_is_falling_out_of_the_economy

What do the elite colleges give?
Power relationships.
Networking.

Things of value mainly if you go into Wall Street, Republican Politics, or the Media. I.e, if you become one of the unproductive parasites sucking the blood out of the people of this country.

Posted by Don Williams | May 12, 2008 7:06 PM

Alan Blinder, former Vice Chairman of the Federal Reserve, made several excellent observations in a 2006 Foreign Affairs article "Offshoring: The Next Industrial Revolution?" re Globalization's impact on the value of college education:

-----------
"Many people blithely assume that the critical labor-market distinction is, and will remain, between highly educated (or highly skilled) people and less-educated (or less-skilled) people -- doctors versus call-center operators, for example. The supposed remedy for the rich countries, accordingly, is more education and a general "upskilling" of the work force. But this view may be mistaken. "
------------
"The critical divide in the future may instead be between those types of work that are easily deliverable through a wire (or via wireless connections) with little or no diminution in quality and those that are not. And this unconventional divide does not correspond well to traditional distinctions between jobs that require high levels of education and jobs that do not.

A few disparate examples will illustrate just how complex -- or, rather, how untraditional -- the new divide is. It is unlikely that the services of either taxi drivers or airline pilots will ever be delivered electronically over long distances. The first is a "bad job" with negligible educational requirements; the second is quite the reverse.

On the other hand, typing services (a low-skill job) and security analysis (a high-skill job) are already being delivered electronically from India -- albeit on a small scale so far. Most physicians need not fear that their jobs will be moved offshore, but radiologists are beginning to see this happening already.

Police officers will not be replaced by electronic monitoring, but some security guards will be. Janitors and crane operators are probably immune to foreign competition; accountants and computer programmers are not. In short, the dividing line between the jobs that produce services that are suitable for electronic delivery (and are thus threatened by offshoring) and those that do not does not correspond to traditional distinctions between high-end and low-end work."

-----------------
" Thus, coping with foreign competition, currently a concern for only a minority of workers in rich countries, will become a major concern for many more.

There is currently not even a vocabulary, much less any systematic data, to help society come to grips with the coming labor-market reality"
---------
"In the second place, the United States and other rich nations will have to transform their educational systems so as to prepare workers for the jobs that will actually exist in their societies. Basically, that requires training more workers for personal services and fewer for many impersonal services and manufacturing. But what does that mean, concretely, for how children should be educated? Simply providing more education is probably a good thing on balance, especially if a more educated labor force is a more flexible labor force, one that can cope more readily with nonroutine tasks and occupational change. However, education is far from a panacea, and the examples given earlier show that the rich countries will retain many jobs that require little education. In the future, how children are educated may prove to be more important than how much. But educational specialists have not even begun to think about this problem. They should start right now."

------------
Ref: http://www.foreignaffairs.org/20060301faessay85209/alan-s-blinder/offshoring-the-next-industrial-revolution.html

My suggestion: A Plumbering certificate may be worth more than a BA.

Posted by Don Williams | May 12, 2008 7:22 PM

Don,

Re: "Offshoring: The Next Industrial Revolution?" People in the 1860's feared the industrial revolution would put everyone out of work. People in the 1960 feared that computers would lead to mass unemployment. And now, in 2008, people worry that "offshoring" will do the same. It wasn't true in 1860, it wasn't true in 1960 and it isn't true now.

The Indian rupee has significant strengthened over the last year against the U.S. dollar, falling from 45 rupees to 39 rupees per dollar. This huge strengthening of 13 percent coupled with significant pay increases has shaved part of the Indian cost advantage.

Posted by Jmo | May 12, 2008 7:41 PM

Re: This November 2006 Atlantic article noted that the wage premium between college graduates and high school graduates is much lower if you take out people at the high end of the income scale (hedge fund managers,etc) and look at the broad middle.

That strikes me as cherry-picking the data. Or maybe picking the cherries out so all you have left are the pits.

Re: Since 2000, the real earnings of college-educated workers (those with bachelor's degrees) have fallen quite steeply

I fund that outside the bounds of credibility-- unless one focuses of the tech bust years, when a lot of people (including myself) did see a fall in income. But since then that lost ground has been made up by just about anyone capable of doing so. I make 30K more than I did when the millenium rolled over, and no, I am not a oligarch.

Re: the supply of college graduates (typically labeled "skilled workers" in this debate) has grown faster than employers' need for them

Odd, when we are told that the percentage of people graduating from college is actually dropping.

Re: It's not the universities fault that men have developed an increasingly warped view of their manhood.

Oh, good grief they haven't! Where is your evidence of that? I mean, there was always a certain macho he-man element in our (and every) culture. But I see no evidence that men in huge numbers are acting like Neanderthals. It rather seemed to me that outside certain dysfunctional subcultures American men have become ever more "metro".

Re: Things of value mainly if you go into Wall Street, Republican Politics, or the Media.

Media people (except a handful of superstars) do not make a lot of money. Politicians at a certain level and above can and do-- Democrats as well as Republicans. Neither the Obamas nor the Clintons are paupers. As for Wall Street, I find it incredible that people kvetch so much about the one industry that pays good wages (even to back office coolies like myself) and has wonderfully progressive employment policies (four weeks vacation, progressively priced health insurance, full domestic partner benefits etc.) But of course, envy was always the most attractive of the Seven Deadly Sins.

Re: And now, in 2008, people worry that "offshoring" will do the same

Offshoring is already a fading fad. It works mainly if you can move an entire operation abroad (e.g., a factory or call center). But you can't move work piecemeal abroad. That's a recipe for disaster, as many firms found out when they tried to outsource specific jobs while keeping other things necessarily at home. The differences in time zones, language and culture gum up the works badly, and can bring work to a screeching halt. Moreover, the law of supply and demand is not nullified when one leaves the US. Highly competent workers in India now cost as much as American workers when the various external costs of employing them are takne into account. And as transportation and communication bills rise with the cost of oil, and political instability abroad, local operations are going to become a lot more common.

Posted by JonF | May 12, 2008 8:09 PM

The first thing to do, when someone quotes statistics about large groups of people (in the case discussed above, the premium for education) is to look at what they are using. Mostly, they use averages, which are pretty useless -- except for demonstrating the ignorance of statistics of the speaker.

Rather than argue about whether or not to exclude hedge fund managers, why not try looking at MEDIAN, rather than average, wages? The only drawback is this: it makes it harder to support your prejudices by fiddling the data.

Posted by wj | May 12, 2008 8:31 PM

Higher ed tuition used to be FREE in the UK. But then warmonger Tony Blair introduced fees of £3000 per annum.

But strangely enough, one of his sons ended up doing an 'internship' at the Senate and then an MSc at Yale. Now he's doing another 'internship' at Morgan Stanley in London.

I think i'm going to vomit.

Posted by Dr David Kelly | May 12, 2008 9:06 PM

5) NO university teaches you how to survive and prosper in today's world. NO university teaches you shit about today's world -- who has the wealth, what they're doing to get more, and how that will change the world in the next 10 years. NO university teaches you how to acquire wealth of your own.

On this point you are 100% correct.

I work with people who have done well by always doing what their teachers and later professors told them to do. However, in the real world your employer isn't going to tell you the most optimum way of getting ahead.

An example from my industry: Your boss is not going to tell you that, if you went and got an offer from the company across town, he would be able to counter-offer with a 25% raise and you could work from home 2 days a week. He would also not tell you that, no matter how hard you work, without that offer, he won't be able to give you anything above 3%.

Another example, I've tried to recruit people and they have told me, I can't leave we are in the middle of a huge project, they sent me to class and I'm the only one who knows X. Huh? That's exactly when you need to tell them you're leaving.

Posted by jmo | May 12, 2008 9:26 PM

Jmo--

Here's the Bureau of Labor Statistics page on registered nurses' wages:

http://www.bls.gov/oes/current/oes291111.htm

Median is about $60K. If you'd like to amortize a $10K signing bonus over three years, then the median might go up to $63K--I have no idea how pervasive the practice of signing bonuses is right now.

Median yearly earnings for PTs is about $66K:

http://stats.bls.gov/OCO/OCOS080.HTM#earnings

Posted by TheRadicalModerate | May 13, 2008 12:13 AM

TheRadicalModerate:

Thanks for explicating your previous post. Regarding nursing and physical therapy, what JMO said. Those are both pretty well-paying professions. Physical therapists often have their own practices, and can make even more money that way.

With respect to education, some teaching positions top out at more (e.g., there are public school teachers in affluent counties such as Westchester, NY, who make $120k), but bear in mind two huge perks of this profession: working 180 days per year and, once tenured, not having to worry about getting fired. There hasn't been a whole lot of useful innovation in pedagogy though. Steve Sailer had an interesting column about this recently, The Age of Alchemy in Education.

You're closest to the mark with elder care, but even there, there have been some innovations. Long-term care insurance is a financial one. We have had fewer technological innovations because this is one area where we do use a lot of cheap labor. Japan, on the other hand, which prefers technological solutions to unskilled immigrants, has come up with a number of technological innovations in elder care (e.g., a robotic cat companion that reminds seniors when to take their meds; an automated shower that can wash a handicapped senior in his wheel chair, toilets that clean your ass, etc.).

Posted by Fred | May 13, 2008 12:19 AM

IN B4 NEPLYEN DINAMIT!!!!!!!!!!!!111111one!!!!

Posted by /b/tard | May 13, 2008 12:39 AM

It's really astounding how little most Americans know about education in the EU. The Germans not only send more of their kids on to college, they also educate the ones who don't go to college, mostly through very well thought out and well regulated apprenticeship programs. Almost every trade in Germany has an apprentice program attached to it. One reason why German industry is still competitive, and we've sent all our jobs to China.

In the US, your choices are college or the military - where else can a young person learn anything? Yet we continue to insist, despite all evidence to the contrary, that the US is more 'democratic' than the rest of the world. Nonsense. Since 1980, it's all been about stepping in the other guy's face. If my kids get an advantage over your kids, so much the better. Until we start acting like a society again, all this bloviating about education is just a waste of time and hot air.

Posted by B.W. Lilly | May 13, 2008 9:38 AM

B.W. Lilly,

The Germans not only send more of their kids on to college,

Do you have any idea what you're talking about?

While in the 1960s only about 8-10 percent of Germany’s college-age students pursued university studies, now more than 30 percent go on to college.

http://www.german-way.com/educ.html

Presently, 63% of [US] high school graduates go to college immediately after graduation, the highest rate ever,

http://www.usatoday.com/news/education/2002-06-05-education-census.htm

Posted by jmo | May 13, 2008 10:25 AM