One would have thought that the rise in the value of a sheepskin from a 30% lifetime wage premium over a high-school diploma in 1975 to a 90% premium in 2005 would have called forth an extraordinary wave of public support and public funding for investment in education that would have pushed that premium down somewhat: lots more Americans should be getting a higher education now than were getting one in the mid-1970s. But they aren't.
Even so, I am convinced that - holding ability constant - a college degree pays a lot more than it used to. So Brad's puzzle remains. Why aren't more people going to college? The best explanation is one that educators - and above all college professors - find almost impossible to believe: Lots of people truly hate school. They find it insufferably boring, pointless, and pompous. Even a massive increase in the return to education isn't enough to make them willing to endure four more years of pointless, pompous boredom.
In technical terms, my claim is that our currently high return to education is a compensating differential. As demand for educated labor has gone up, the marginal college student has rapidly become a person who hates school, and has to be paid a ton of compensation for the pain and suffering of listening to people like Brad and me for hours on end.
If you're tempted to respond, "But I love school, and so do all my friends. Ah, the life of the mind, what could be better?" let me gently remind you that readers of economics blogs are not a random sample of the population. Most people would hate reading this blog; you read it just for fun! To paraphrase Rambo, "What you call home, they call hell."