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.
READER COMMENTS
Mike Davis
Jul 9 2018 at 3:26pm
It is certainly true that the growth of Mexican GDP has been relatively anemic. And I’ll bet if you look at the usual metrics of educational achievement, those haven’t been great either. But those are not the only things to think about. If we could measure the growth in the income of native born Mexicans, I guarantee we’d see a much bigger number since that statistic would include native born Mexicans who are earning much more in the US. I’m pretty sure, too, that if we looked at education metrics for the children of native born Mexicans, we’d see remarkable improvements there, since the kids of immigrants are attending relatively better schools in the US.
With that said, though, I still think we should worry about slow Mexican GDP growth for exactly the same reason we should worry about slow growth in, say, Michigan and Illinois. It’s not enough to conclude that since some people can leave, we shouldn’t worry about the people who stay. Culture matters and when large numbers of the most talented and energetic people leave, the culture—not just the education culture—suffers. Remember, by the way, Bryan’s book shouldn’t be read as a broadside against all education—teaching kids in Texas to speak French may be a waste of time but teaching kids in Monterey to read English may be a really good thing.
David Henderson
Jul 9 2018 at 4:05pm
Mike,
You wrote:
If we could measure the growth in the income of native born Mexicans, I guarantee we’d see a much bigger number since that statistic would include native born Mexicans who are earning much more in the US.
That’s my point. If we care about Mexicans, we care about Mexicans. I don’t care less because they move here.
You wrote:
It’s not enough to conclude that since some people can leave, we shouldn’t worry about the people who stay.
I agree. But there are a lot of transfers by Mexicans here to friends and family back home.
Culture matters and when large numbers of the most talented and energetic people leave, the culture—not just the education culture—suffers.
That may be right. I would like to understand better what Tyler means by “education culture.”
teaching kids in Monterey to read English may be a really good thing.
True.
Mark Z
Jul 10 2018 at 1:59pm
Perhaps another way of putting the dilemma: is there any reason to prefer more geographically evenly distributed wealth or poverty to less evenly distributed wealth or poverty, if the distribution among individuals is the same? I don’t think it’s self evident that we should prefer one to the other, and I think that’s what Dr. Henderson is saying. Every year, many stores in my city close, and many new ones open. Now, if all the ones that close are in the same neighborhood, it’s more noticeable, but is it really worse? If not, there’s no reason to favor taking measures to save the ‘going out of business’ neighborhood (or no more than for taking measures to save all the shops going out of business dispersed throughout the city).
David Henderson
Jul 11 2018 at 9:15am
Well said, Mark. Yes, that is what I was getting at but I think you said it a little better.
Todd Kreider
Jul 11 2018 at 6:18pm
From 2008 to 2017, Mexico’s GDP per capita has grown about 0.7% a year. That is weak, although U.S. GDP per capita has only grown 0.9% a year over that period.
Dylan
Jul 9 2018 at 3:51pm
David,
Maybe I’m misunderstanding your point or Tyler’s but it seems clear that Tyler thinks the better option for the Mexican who can migrate to the U.S. and get a better job here is he should certainly do that. But that certainly isn’t an option for most Mexicans. Tyler’s argument seems to be similar in logic to a “brain drain” and that by taking advantage of the options in the U.S. they are making things worse at home (at least in terms of educational culture)? I’m not sure I buy that argument, but it doesn’t seem to disagree with anything in your response either, unless I’m missing something?
David Henderson
Jul 9 2018 at 4:10pm
Dylan,
You wrote:
it seems clear that Tyler thinks the better option for the Mexican who can migrate to the U.S. and get a better job here is he should certainly do that.
That seems clear to me too, as I said in the post.
Tyler’s argument seems to be similar in logic to a “brain drain” and that by taking advantage of the options in the U.S. they are making things worse at home (at least in terms of educational culture)?
Yes, he does seem to worry a lot about educational culture, without ever defining it. When you take account of all the transfers home (as noted in my reply to Mike Davis), it’s not at all clear that the Mexicans left behind are worse off.
John Hare
Jul 9 2018 at 4:03pm
if the raft guide was used to living on half that salary, he could bank the other half as long as the job lasted. Then the college fallback could cash flow if necessary giving the later degree without student loans. Experience, degree, and freedom from debt vs student debt and a possible job that might pay as well. No brainer from where I sit. Not to mention that he has a foot in the door as you mention that is a high percentage of the signaling that the degree delivers.
David Henderson
Jul 9 2018 at 4:08pm
Exactly, John. Well said.
JK Brown
Jul 9 2018 at 5:23pm
This goes along with something Nassim Taleb said in his discussion of education with Bryan and Tyler.
That makes sense and fits with others have related about having some practice before studying the theory. In the electronics world, Dave Jones who has the EEVblog youtube channel talking with Jack Ganssle, a guru in embedded systems both mentioned how their earlier experience in electronics helped them in the engineering coursework.
Taleb summed it up as “You should try practice, then theory.”
My only concerns were would those who maybe picked up a vocational skillset return to college later. With late marriage coming near or after 30, the risk of family obligations diverting them from returning seems minimal.
With declining enrollments, colleges may need to become more accommodating to older students at the undergrad level.
R Richard Schweitzer
Jul 10 2018 at 10:07am
Let us presume that education (the “drawing out,” extracting) is **about** Learning.
Is the function (or meaning, or purpose) of learning to acquire means to ends.
Is it to discriminate in the selection of ends (and the selections of means)?
Is learning to be the (or “a”) means to ends.
Is it all just “trade schools?”
Mark Z
Jul 10 2018 at 2:05pm
David, there is one good reason I can think of for going to college (or for going to grad school after going to college instead of going into the work force), which is that (at least per conventional wisdom) it’s generally easier to learn in an educational setting while younger. I admit I haven’t read the research on this, but it’s accepted, especially for people in STEM fields, that going back to school after taking a significant amount of time off makes it much more difficult to complete one’s education. So the longer you’re in the work force, the less able you’ll actually be to go back and further your education.
Perhaps this has all been refuted, but most people in academia I know still seem to believe this to be the case.
David Henderson
Jul 11 2018 at 9:16am
My observation is the exact opposite. When I was in college, I found that the most-focused students who managed their time best were in the age range of 25 to 30. So that 18 year old could go 6 or more years earning high 5-digit salaries and, if he so chose, save a big nest egg and then get his degree in 4 years or fewer.
Floccina
Jul 11 2018 at 12:42pm
It seems to me that until 2008 mean years of education in Mexico was growing a reasonable rat. See here.
Steve Postrel
Jul 13 2018 at 9:35pm
The argument Tyler is implicitly making is that there is an externality between high-ability Mexican emigrants and their lower-ability left-behinds, and that if the latter pursued education at home they would raise the economic growth rate of Mexico and the productivity of the lower-ability group. Moreover, there could be a collective externality among the group of high-ability Mexicans, such that if they all pursued education a la South Korea at home, their collective productivity would be much higher.
Comments are closed.