An entry in the “unsurprising facts” department.
It occurred to me that Bryan Caplan should have contacted me by now to tell me that I had lost a bet to him. The fact that he didn’t led me to consider two possibilities: (1) I won and he’s purposely not telling me, or (2) I lost but he’s too busy to notice.
I immediately rejected the first possibility. Bryan is way too honorable a person to do that. And it wasn’t exactly the second. Instead, it was that Bryan had forgotten the exact end point of the bet and thought that we had to wait another year to find out. It turns out we didn’t have to wait.
Here was our bet, formulated in 2011:
I [Bryan] propose that we use the official numbers from the National Center for Education Statistics’ Table 212. 2009 is the latest available year of data. 29.6% of 18-24 year-olds were enrolled in 4-year institutions. I bet that in 2019, that percent will be no more than 10% lower. Rounding in your favor, I win if the number is 26.7% or more. If the number is lower, you win. If the data series is discontinued, the bet is canceled. Stakes: $100 at even odds.
I lost and I lost spectacularly. It wasn’t just that the number we bet on didn’t fall. I don’t think Bryan would have been surprised to see the number go below 29.6%. What did it do? It rose. In 2019, it was 30.4%.
I commented by email that I might have had a shot if we had bet on 2021 data. But if I had won, it wouldn’t have been because of the normal factors pushing potential students to other options. Instead it would have been because of the pandemic-induced shutdowns of in-person college. As I put it to Bryan, neither of us was betting on whether thousands of college administrators would go bonkers.
One thing I feel good about: I think I’m the first person to lose a bet to Bryan who contacted him to tell him that before he contacted me. Am I willing to bet on that? No.
READER COMMENTS
Jared
Jan 19 2022 at 2:27pm
You are a good sport, sir!
David Henderson
Jan 19 2022 at 4:11pm
Thank you.
Andrew_FL
Jan 19 2022 at 2:30pm
Why did you think the number would decrease?
David Henderson
Jan 19 2022 at 4:12pm
Because of alternate ways of getting credentialed, the increase PC-ification of colleges, and increasing hesitance to get into 5-figure debt situations at close to the start of adulthood.
Dylan
Jan 20 2022 at 8:07am
My lesson from Bryan’s betting record is that it pays to always bet on the status quo if you can get even odds. Those wishing to propose a bet to Bryan where they are betting on a major change in anything should really push for much better odds.
Thomas Strenge
Jan 19 2022 at 3:21pm
Also, do you think you might win if this bet went on another ten years?
David Henderson
Jan 19 2022 at 4:13pm
No, but I might have won if the end point had been 12 years instead of 10 years. But I haven’t checked those data.
Todd Kreider
Jan 20 2022 at 5:17pm
I think you would have won had the bet continued to 2029 for at least the first two reasons you stated.
Phil H
Jan 19 2022 at 6:25pm
The conclusion to be drawn, presumably, is that people like college as it exists today.
David Henderson
Jan 19 2022 at 7:54pm
Yes, for whatever reason.
David Henderson
Jan 20 2022 at 10:57am
I read Phil H’s statement too carelessly. I DON’T agree that they like it. I do agree that they want it. Their demand is a derived demand, along the lines that Mark Z lays out.
robc
Jan 19 2022 at 9:06pm
Compared to the available options, yes.
Compared to a free market in education?
Mark Z
Jan 19 2022 at 10:05pm
I take it to mean that employers find it to be a more useful signal of what they’re looking for in inexperienced employees than any current alternative. I’m not sure students themselves would like it enough to pay so much for it if employers didn’t value it so.
Phil H
Jan 20 2022 at 1:54am
College is supposed to prepare you for work. Your claim is apparently that it’s doing that well. If you’re right, then there is no problem.
Matthias
Jan 20 2022 at 6:16am
See Bryan’s Case against Education for the whole argument.
Education is essentially an arms race of signalling.
Like other arms races, it benefits the individual to invest, but it doesn’t benefit society as a whole.
The latter is a case of externalities. And an argument in favour of taxing credentials heavily, or at the least removing all subsidies.
Phil H
Jan 20 2022 at 10:26am
So… While I have some sympathy with the Caplan view of education, the idea that “there should be no arms races” is… naive. The way markets work (they’re the things we’re supposed to like here at EconLib!) is that people compete. And sometimes they will compete in ways that are not optimal for society as a whole (arms races). My real view on this is that if you honestly believe in markets (as I do) then you should be biting a lot more bullets, because sometimes markets are messed up.
Mark Z
Jan 20 2022 at 10:53pm
Competition for positional goods is zero sum. To some extent, of course, signaling is useful for sorting purposes, but if education is in fact valuable mainly for signaling, then providing or subsidizing more of it is actually counterproductive (e.g., if everyone has a college degree, a college degree is a useless signal). Are you (Phil H) saying that an ‘arms race’ is good in this context? Or that it would happen even with an unsubsidized, free market in education?
Phil H
Jan 23 2022 at 12:30am
Sorry, was slow to reply here, but just in response to Mark Z:
“Are you (Phil H) saying that an ‘arms race’ is good in this context? Or that it would happen even with an unsubsidized, free market in education?”
I’m suggesting that arms races can and do happen in unsubsidized free markets. I’m assuming that arms races are “bad” in some way (they cause suboptimal allocation of resources for a certain period of time), and I think that when they happen it is not necessarily because of government intervention.
robc
Jan 20 2022 at 8:35am
Is it? That is not what most schools say. And the curriculum suggests otherwise too. See also the recent article on Northwestern and graduating early. I think you had a different take in the comments there.
The schools that stress “prep for work” are the vocation and for-profits.
Phil H
Jan 20 2022 at 10:30am
“That is not what most schools say.”
Well, that’s empirically not true. You mentioned Northwestern, so I googled “Northwestern University after graduation” and this page popped up: https://weinberg.northwestern.edu/after-graduation/index.html
The very first data visualisation on this page is “fields of employment”. It’s just nonsense to claim that colleges don’t see themselves as preparation for work, or don’t talk about employment for their graduates. I know they talk about a bunch of other things as well, but colleges clearly take the preparation for the workplace thing seriously in their rhetoric, and in many of their practices as well.
robc
Jan 20 2022 at 10:54am
I will correct myself, that is not what they say is their primary goal. Yes, they all like to talk about employment rates (although NWern weasels on that including grad school in their numbers), but that is different from preparing for work.
That page does have some things to say about that, mentioning internships, for example, but most of their list doesn’t apply to job prep.
The funny thing is, I dont think colleges should primarily be focusing on job prep. They should be about education. And retaining knowledge. Which they aren’t. They are signal shops.
Job prep schools would focus on particular jobs and wouldn’t have extraneous other coursework. There would be some basics, but mostly they would focus on the core classes for the job.
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