Education and Income
By Arnold Kling
Four years of falling earnings for the college-educated. That hasn’t happened since the 1970s…
The only people doing well have advanced degrees. The world has changed. Just college is no longer enough.
I’m basically an optimist, but this can’t be a good thing. I’d be interested to hear what others think.
The charts on his post are what tell the story. Click on the link to get the picture.
The Census data necessarily include lots of people who finished their education many years ago. I think that 2000 was a peak year for many people, because at the top of the dotcom bubble a large proportion of the population was employed. So maybe the surprise should be that any group shows gains in income since 2000.
What would be interesting to know would be what has happened to the salaries of a 26-year-old with an advanced degree, with a college degree, and with a high school degree. If the pattern turned out to be the same as that shown in the chart, with advanced degrees going up, high school staying the same, and college-only falling, then it might raise questions about the value of college for those who do not get advanced degrees.I bring that up because the singular of data is anecdote, and anecdotally my daughter will tell you that her college education did not get her a job that required more skills or provide higher pay than what she could have gotten out of high school. So she is thinking about law school.
If her experience becomes widespread and well known, then the role of a college education changes. It becomes the gatekeeper to getting an advanced degree, but otherwise its intrinsic value is small. My instinct is that we’re kind of headed that way. If so, then colleges will have to do more to improve the income prospects of those who are not bound for advanced degrees. Or some other institution will emerge that aims for those students.
In a related story, Robert Frank writes,
most students seem to emerge from introductory economics courses without having learned even the most important basic principles. According to one recent study, their ability to answer simple economic questions several months after leaving the course is not measurably different from that of people who never took a principles course…
the introductory course is increasingly tailored not for the majority of students for whom it will be their only economics course, but for the negligible fraction who will go on to become professional economists. Such courses focus on the mathematical models that have become the cornerstone of modern economic theory. These models prove daunting for many students and leave them little time and energy to focus on how basic economic principles help explain everyday behavior.
I published Learning Economics to try to offer a non-mathematical approach.