Arnold Kling  

College Returns and Nonexperimental Data

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David Leonhardt writes,


Construction workers, police officers, plumbers, retail salespeople and secretaries, among others, make significantly more with a degree than without one. Why? Education helps people do higher-skilled work, get jobs with better-paying companies or open their own businesses.

Or, perhaps, college filters out people with low cognitive ability, low conscientiousness, and other adverse traits. I want to see an experiment, in which some people are randomly chosen to go to college and others are chosen not to go to college. Then, proceed to compare outcomes. Meanwhile, nonexperimental data is of little or no value.

Leonhardt continues,


Various natural experiments -- like teenagers' proximity to a campus, which affects whether they enroll -- have shown that people do acquire skills in college.

Except that proximity to college is not necessarily uncorrelated with either the skill distribution of jobs in the area or with unobserved characteristics of the population in the area. I've looked at these "natural experiment" studies when I wrote my critique (with John Merrifiedl) of Goldin-Katz. The methods used in the papers were dreadful.

Leonhardt concludes,


I don't doubt that the skeptics are well meaning. But, in the end, their case against college is an elitist one -- for me and not for thee. And that's rarely good advice.

My elitism comes from the few years I spent as an adjunct at George Mason. The typical undergrad in my course could not write a paper or solve an algebra problem. I doubt that adding more students at this margin is the way to raise people's incomes.

Somebody should run the experiment on a small scale, before we embark on a grand social policy on this.


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COMMENTS (12 to date)
Reader writes:

The Vietnam draft natural experiment discussed here finds evidence that college matters: http://freakonomicsradio.com/does-college-still-matter-and-other-freaky-questions-answered.html

L Nettles writes:

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odinbearded writes:

CEO education and firm performance

From the abstract:

"Our results lead to the puzzling implication that, while CEO education appears to play an important role in the hiring of CEOs, it does not affect the long-term performance of firms."

WG writes:

When does additional education stop paying off? If college offers such a great pay-off, shouldn't we be encouraging everyone to earn a master's degree? Why not a PhD?

This kind of thinking is leading people into ruin. Richard Vedder estimates that 17 million college-educated adults are grossly underemployed.

Meanwhile, grad school is proving to be a miserable dead-end for far too many people.

econo4321 writes:

"Our results lead to the puzzling implication that, while CEO education appears to play an important role in the hiring of CEOs, it does not affect the long-term performance of firms."

Doesn´t seem very puzzling.

Step one: Screen strictly for college-selected traits and skills using college metrics.

Step two: Well, there isn´t going to be much variation amongst the selected in college-screened traits after that initial screening, no?

I.e:

Step one: Screen potential NBA players based on height.

Step two: Well, there isn´t going to be much variation in performance based on height in the NBA. But height is still crucial to basketball performance.

Hugh writes:

I was heartened to see that most of the commenters on Leonhardt's piece seemed to think he was wrong - and cited many of the reasons given above.

And this in the NYT!!

eppur si muove

Granite26 writes:

Do you think we would be better off if parents stopped saying 'or you won't get into college', and started saying 'or you won't be able to succeed in college'?

Rev Dr E Buzz writes:

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Floccina writes:
Construction workers, police officers, plumbers, retail salespeople and secretaries, among others, make significantly more with a degree than without one. Why? Education helps people do higher-skilled work, get jobs with better-paying companies or open their own businesses.

It could still be signalling. Employers could be discriminating against those without degrees. To do a random test you need to send people to college for years, have them pass everything but get no degree.

I will say that this evidence does make me question my priors. I have always thought that schooling could raise earnings for example schools taught us how to invest and not get ripped off.

If the education received in college does raise earnings, I would love to know what they learn that increases earnings. Maybe it is just that they should invest in indexed mutual funds due to efficient market theory.

It seems to me that college makes people feel more a part of the system and less paranoid and more trusting. Part of that comes from being around a group of above average intelligence people for 4 years. That part would go if everyone went to college.

SWH writes:

The education value/function discussion is interesting to economists, but probably not to engineers like myself. Education is an absolute requirement for the job for most engineers and others in "hard" sciences. There may be a some signaling: a MIT engineering degree will get you a job that some public university engineering degrees might not. But regardless, without the education, the skills and knowledge, obtainable nowhere but via a degreed program, you are not getting that job and you are not doing that job. Maybe that is different in economics....I'm not sure.

Walter Sobchak writes:

So many hidden variables. So little time.

Jay writes:

Although I agree that more quantitative research should be done, I'm afraid that it will be to no avail. Just because you go to college and even graduate doesn't mean you are more intelligent or capable than someone who hasn't. Just like you said, there are plenty of undergrads out there who can barely write a comprehensible essay. Furthermore, the more people who attend college and aren't capable, the less a college degree is worth.

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