Arnold Kling  

The Plight of the Marginal College Grad

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Richard Vedder and co-authors analyze the numbers.


More than one-third of current working graduates are in jobs that do not require a degree, and the proportion appears to be rising rapidly...60 percent of the increased college graduate population between 1992 and 2008 ended up in these lower skill jobs, raising real questions about the desirability of pushing to increase the proportion of Americans attending and graduating from four year colleges and universities.

I have reported on this research before, but the link is to a longer paper. The paper includes interesting references, including Edwin S. Rubinstein writing in 1998 on a forecast for job trends. It turns out that the Department of Labor at the time foresaw that jobs requiring on-the-job training, rather than a college education, would increase. And, of course, that does not even account for the jobs, such as physical therapists, that only require a college education due to licensing laws.


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COMMENTS (13 to date)
OneEyedMan writes:

The 60% number comes from BLS classification. I wonder if that classification system is any good.

Robert Johnson writes:

Sounds like an argument in favor of tech schools. Why are they so demonized, anyway?

English Professor writes:

This should not be surprising to anyone who teaches college, especially at a second or third-tier school. I teach at a private university that probably has better-than-average students, but that is by no means a first-tier institution. Even at a place like this, the bottom third of the students appear to get very little from college. They do not read with much sophistication or write with either clarity or skill. They come out with a credential, but they do not seem either particularly inquisitive or particularly well educated. I wouldn't hire them for any job that required thinking.

Ryan writes:

When education costs as much as 30-year mortgage on a mid-sized house in the Southeastern US, there's more than one thing wrong.

I'm talking about a Physical Therapist that I know, specifically.

Matt C writes:

This is a bit of a tangent, but I think readers will find it interesting:

http://www.onlinedegrees.org/calculator/salary/highest-paying-degrees

The page attempts to calculate ROI for different kinds of degrees: associates and bachelor's degress in different majors.

The ROIs are based on some assumptions that oversimplify the reality--notably, they assume that getting a degree means you get a job in the field, directly contrary to what the authors are talking about above--but, as the page suggests, it does allow for some apples to apples comparisons.

The interesting thing, to me, is the staggering difference in ROI between associates degrees and bachelor's degrees. I bet Bryan can come up with some interesting conjectures here. Too late to use for his new book?

Robert, I wish they had done trade schools as well. There, you'd really need to filter out the scammy ones, though.

volatility bounded writes:

Kling's headline does not fit the article. The plight of the typical college grad is not only that the economy doesn't need many people with college educations, but also that free trade and technology have reduced the wages of workers in jobs that don't need college degrees.

However, this can easily change. If you have a cultural backlash against free trade, you can wind up with tarriffs, that boost wages of the unskilled. The same is true if we have $150 bbl oil prices due to a cultural adoption of green attitudes, a nuclear war in the Middle East, oil shortages, etc.

Mr. Econotarian writes:

I think the paper misses two issues -

1) As Matt C points out, expected income and unemployment rate vary dramatically by major - yet most colleges want you to pay THE SAME for a sociology degree and an electrical engineering degree, yet the engineer ends up paid 3 times more and has a lower expected unemployment rate.

2) The second issue is the large number of people who start a four-year college degree but never finish. I'd love to see research on the ROI of "some college, then dropped out", but I suspect it is a wash or negative.

3) The ROI of expensive schools versus cheap schools should be looked at as well. I bet that unless you go to the topmost schools, there isn't much difference in your expected lifetime income if you go to school ranked #60 versus #80.

Jacob Oost writes:

Thanks for the link Matt C but their methodology on ranking Associate's degrees is off, which makes me wonder how accurate their findings for Bachelor's, Master's, and Doctoral degrees are (although their findings for Bachelor's degrees square up with every other ranking I've seen, i.e. be an engineer).

They assume that somebody with an AS in "electrical engineering" will get a job as an electrical engineer. You don't become an engineer with a two-year degree (you get a job as a technician), you need a Bachelor's minimum. In a bona fide engineering college, you don't start the meat and potatoes of your engineering curriculum until half-way through you second year, at the earliest. The rest is math and science "engineering boot camp." Two-year degrees in "engineering" are a good degree for many people but they are a whole other animal from a "real" engineering degree, as they cover a lot more hands-on nuts and bolts tech education and a lot of the less science and theory needed to, say, invent the integrated circuit. They are the "nurses" and engineers are the "doctors," so to speak.

They make similar mistakes for Mech.Eng and Nuc.Eng. two-year degrees. I didn't even know it was possible to get an AS in *nuclear* engineering.

MernaMoose writes:

raising real questions about the desirability of pushing to increase the proportion of Americans attending and graduating from four year colleges and universities.

But then, maybe, the "desirability" is coming from some other direction entirely.

Our educational system is largely owned and run by the left. It is the predominant slant you get in anything "liberal arts" related.

Getting a job is one thing. Making sure everything is thinking right, is another entirely.

Who knows. Just conjecture. But consider how "desirable" it is to make sure everybody votes the right way when it comes to ObamaCare and carbon taxes (under whatever guise), with the "desirability" of generating ever more registered and paid for credit hours each semester, and the "desirability" of putting everybody possible through college starts to make a lot of sense.

Which doesn't explain everything, no matter how you slice it. Our Social Engineering Overlords and the universities may want to sell degree programs, but this whole scenerio wouldn't be playing out if the customers weren't so ready to buy them.


I don't even buy this "You don't need no stinking college" meme that I hear floating around the right wing atmosphere.

I do buy the idea that many (maybe even majority?) of the degrees colleges are currently selling, are 95% BS and fluff.

The sooner our existing university system puts itself out of business, by virtue of its own irrelevance, and is replaced by something produced by genuine market forces (which our existing university system is not), the better off our nation as a whole will be.

Shangwen writes:

I looked over Vedder's report. There's an interesting table on page 7 that looks at the percentage of employees with degrees in jobs that do not require them. There are two or three modes in the data, which are even more interesting than the list of professions. Two observations:

- percentages are high in low-paying jobs that offer no tips, primarily office workers. My personal experience (r/t former classmates and some family members) is that unskilled college grads would rather take a lower paying secretarial job than a higher paying industrial one, because office jobs look more educated;

- Firefighters are high too (over 18%, incredible). Although the study says on-the-job training is the requirement, I know that many public-sector protection jobs have moved to increasing degree requirements for applicants simply to filter out the huge numbers of applicants who are drawn to secure public-sector jobs with big overtime pay, generous benefits and pensions, and early retirement, as well as the chance to do plenty of black-market home renos and landscaping services on the side.

I have only one policy recommendation, that universities should get big fat subsidies to offer degrees in literature, women's studies, and Belgian art history to retired people. Some after-market crowd-out might help nudge a few more teens into the skilled trades.

Jonathan writes:

I must also point out that right at this moment, those who are attending college have been told since birth to do so. Parents are told to save for college moments after there child is born. It is engraved in the fabric of our society to place college as the peak of success, when really, its just another step some people should (or should not) take. When it comes to college, I suggest to people to make up there own mind, which is part of being an adult, to think for yourself. No one has answers, not even economists, (lord knows not economists). I think college will price itself out of the market, sooner or later, parents wont be able to save enough for there kids because there wage was slashed in half, so the child goes 100k in debt to make a slashed wage as well. For as long as the money is available and people continue to sell college has this beacon of success, you will not empower your future, but merely swim in your debt.

John Thacker writes:

Speaking of the plight of the marginal college grad, Arnold might appreciate this article about credentialism at the largest investment banks. Or is it signaling instead, as Bryan might wonder?

CBBB writes:

It seems that there are really only two degree programs worth majoring in, out of all the possible subjects one could study; the first is engineering the other is accounting.
Outside of those fields getting a degree is a huge gamble.

And concerning the John Thacker's article - one would hope that companies that lock themselves into a monoculture (only employing Harvard or Yale graduates who come from wealthy background) would disadvantage these firms in terms of innovation in the long run.
I can't understand why they'd turn down the MIT engineer who is probably much smarter then the Harvard poetry major.

However, as we've seen any sign of trouble for this big investment banks and the taxpayer is expected to step in with a bailout.

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