Tyler Cowen's Educational Non Sequitur
By David Henderson
About 15 years ago, when my daughter and I were on our annual father/daughter trip, we rafted down the Middle Fork of the American River with a guide who had just finished high school. He had already been accepted in a college for the fall, but one of his customers a few days earlier, who was in the tech field in Silicon Valley, had found his tech skills promising and had offered him a beginning position at $60K a year. This for an 18-year old, and remember that this was in 2003 dollars.
He seemed to be asking the older adults in his raft what he should do. He was inclined to say yes to the job. A fellow passenger about my age told him that he should say no and go to college instead. Her reasoning? With a college degree, you’ll always have something to fall back on.
I replied that this didn’t make sense. A college degree in those days might, if he were lucky, get him a job–four years later–paying about $60K a year. The woman just repeated that he would have something to fall back on. I replied that if he got fired from the job he probably would find another job paying almost as much. But, I argued, in the worse case, where he couldn’t find another well-paying job, he could “fall back on” college. Why, I asked the young man, give up a great opportunity now to invest 4 years in what was essentially, in this woman’s thinking, an insurance policy? Then, to drive home my point, I pointed to an extreme example: a promising basketball player who can jump to the NBA and make a 6-digit salary rather than being paid zero (other than tuition and room and board) for a few years of college.
I thought of all this when I read Tyler Cowen’s most recent article for Bloomberg. In explaining why Mexico’s GDP grows at only about 2% per year, Tyler points out that education for the lower-income classes doesn’t work as well as another option: moving to the United States. He writes:
Instead, it is education that is arguably Mexico’s most fundamental problem. In most emerging economies, if you are ambitious and seek higher wages, you will invest in more education. Mexicans have traditionally had another choice — crossing the border to work in the U.S. Mexicans who make this choice can move from earning a dollar or two a day to 10 or 15 dollars an hour, though with higher living costs. It is hard to beat that boost simply by finishing high school or even college in Mexico.
So a lot of Mexico’s most ambitious lower-income people have an incentive to stop their education rather than invest in it.
I don’t know what advice Tyler would have given the young rafting guide or what advice he would give an ambitious lower-income Mexican. I suspect that it would be the same advice I would give. For the young man, take the Silicon Valley job; for the Mexican, move to the United States.
And remember that to the extent we care about Mexicans, we should care about Mexicans. We shouldn’t put a lot of weight on whether they do better for themselves by moving here or by staying. The Mexican economy is a collection of individuals. So what if a large percent of those individuals do well only by moving to another country?
What does Tyler see as the problem. In the next part of Tyler’s second paragraph I quoted above:
That in turn has harmed educational culture, and furthermore the incoming government has promised to reverse some positive educational reforms already underway. It is unlikely that Mexico will soon become more like South Korea, for instance, with its obsession with private tutors and higher education. Near the peak of Mexican migration last decade, about 15 percent of the Mexican labor force was working in the U.S.
It may harm educational culture. But how important is that? If one of the main goals of education is to get a good well-paying job, and there’s a much better way to get such a job without getting educated, then is “educational culture” really that important? I don’t see it.
Now Tyler might argue that people get big personal benefits from education besides getting a good job. My co-blogger Bryan Caplan, though, a close friend and colleague of Tyler, has effectively refuted that argument with his recent masterpiece, The Case Against Education.