Is education the most important equalizer?

Jeffrey Selingo, author of College (Un)bound: The Future of Higher Education, and What It Means for Students, spoke with NPR about “why colleges are no longer an equalizing force”.

… One of the most disturbing numbers I came across in research for this book was that if you come from a family with a family income above $90,000, you have a 1 in 2 chance of getting a bachelor’s degree by the time you’re in your mid-20s. If you come from a family under $35,000, you have a 1 in 17 chance.

“One of the fears, and one of my fears, is that we might become a country where the next generation is less educated than the generation that preceded it.”

If current trends continue, the next generation is also much more likely to have grown up in a household without a father.

Missing fathers are at the core of a ‘vicious cycle’ of poverty and low education levels.

The chance of a child ending up poor declines by 82 percent when raised in a two-parent family.

Which one factor is more important in equalizing financial opportunities – college or fathers?  I don’t know, but if I had a magic wand and could change only one of these, I’d put fathers back into American families.  The education part would probably start to take care of itself.

Related:  Non-marital births by education level as part of the growing class divide (Cost of College)

The problem with a liberal arts degree is that ‘rigor has weakened’

In theory, a college liberal arts degree is a valuable commodity in the job market.  In reality, the way colleges have diluted the curriculum means a liberal arts degree offers little added value in qualifying workers for today’s job market.

‘Liberal arts skills are profitable for college graduates‘

It turns out that employers are looking for the skills that liberal-arts studies instill — critical thinking, logical reasoning, clear writing.  College graduates who tested best at liberal-arts skills were “far more likely to be better off financially than those who scored lowest.

The problem is employers have found liberal arts graduates ‘didn’t learn much in school’.

… Many liberal-arts graduates, even from the best schools, aren’t getting jobs in large part because they didn’t learn much in school. They can’t write or speak well or intelligently analyze what they read.

The National Association of Educational Progress indicates that literary proficiency among adults with “some” college is declining. Richard Arum and Josipa Roksa, authors of the 2011 book “Academically Adrift: Limited Learning on College Campuses,” found that 36% of college students made no discernible progress in the ability to think and analyze critically after four years in school.

You can minor in ”Social and Economic Justice” without ever studying economics.

For many students, college is a smorgasbord of easy courses chosen for their lack of academic rigor. There is no serious “core curriculum.” Students spend limited time studying. Faculty and administrators make matters worse by allowing students to fill up their time with courses like UNC-Chapel Hill’s “Dogs and People: From Prehistory to the Urbanized Future” and “Music in Motion: American Popular Music and Dance.” When students can get a minor in “Social and Economic Justice” without ever taking a course in the economics department, it’s hardly surprising that businesses aren’t lining up to hire them.

In contrast to liberal arts studies, many STEM and similar vocational majors that focus on teaching specific content have not watered down their curriculum.

Related:

•  The value of a liberal arts major depends on the student and the school (Cost of College)
• Career Prep and the Liberal Arts (Huff Post)

The rise of serial interns – ‘long hours and low pay’

“Permatern” is the new label for a college graduate who spends years in her 20s working for a minimal stipend or for free.  This pattern seems to have become more common for some liberal arts college graduates seeking jobs in media, the arts, and other fields, particularly in the metro areas of New York City, Los Angeles, and Washington D.C.

Kate, with a degree in political science from an Ivy League school, was recently profiled in The Week.

She had one internship at a political organization and another at a media company and is now an unpaid intern at a lobbying firm. To make ends meet, she works as a hostess three or four nights a week, which means she often clocks 15-hour days.

Lacking a steady paycheck and benefits

… After all, who wants to still be an intern at an age when you should have a 401(k) and a modicum of job security, or at least be earning more than you did at your summer job during high school? …

When I ask Kate how many jobs she’s applied for, she says, “Like a million.”

Permaterns are sometimes counted in the growing numbers of underemployed college graduates.

Desperate as she is, the Department of Labor doesn’t consider her to be unemployed, because she has two jobs. Instead, Kate, who often works more than 60 hours a week, is in a class of workers who don’t show up in government reports. She’s one of the ”permaterns” — those perpetual interns, mostly in their 20s — who have been battered by the recession and are holding out hope that the conventional career wisdom that an internship leads to a job isn’t folklore from a bygone era.

A ‘skills gap’

The serial intern isn’t unique to D.C. You can find young people languishing at film studios in Los Angeles and magazine empires in New York City. The permatern phenomenon points toward wider trends in the economy — namely the cutthroat competition for knowledge-economy jobs, the lack of investment in this generation, and the skills gap between what a generation weaned on a liberal-arts education is trained for and what the in-demand skills and professions are right now (i.e., not another poli-sci or English major). The result? For many in Washington, the American dream starts with a highbrow internship that pays $4.35 an hour — then another, and maybe another.

STEM majors usually avoid serial internships.

Not everyone in the generation meets such a fate. Jessica’s brother, who is 28 and a mechanical aerospace engineer, has been gainfully employed since the day he graduated from college, Jessica says. So here’s another chasm in the 20-something cohort: the one between the liberal-arts kids and the engineering and science majors. “Engineering is an in-demand skill,” Jessica says. “International relations/policy kids are a dime a dozen, so the intern pay difference makes sense in that regard.”

A sense of entitlement

The expectation that one’s career should be fulfilling is another reason why the mid-20s, or even early-30s, intern has become a familiar sight in Washington offices. “People in this generation, despite the recession, are looking for what they really want to do, so they take a hit in the form of an internship to land one of those coveted jobs that pays the bills and is fun,” says Ryan Healy of career-advice site BrazenCareerist.com.

Living at home and logging long hours

… long hours and low pay go hand in hand in the creative class. The recession has been no friend to entry-level positions, where hundreds of applicants vie for unpaid internships at which they are expected to be on call with iPhone in hand, tweeting for and representing their company at all hours.

“We need to hire a 22-22-22,” one new-media manager was overheard saying recently, meaning a 22-year-old willing to work 22-hour days for $22,000 a year….

Required to be available all the time and expected to work ’65+ hours per week’.

A recent posting by Dalkey Archive Press, an avant-garde publisher in Champaign, Ill., for unpaid interns in its London office encapsulated the outlandish demands on young workers. The stern catalog of grounds for “immediate dismissal” included “coming in late or leaving early without prior permission,” “being unavailable at night or on the weekends” and “failing to respond to e-mails in a timely way.” And “The Steve Wilkos Show” on NBCUniversal recently advertised on Craigslist for a freelance booking production assistant who would work “65+ hours per week” (the listing was later removed after drawing outraged comments when it was linked on jimromenesko.com).

Sometimes it works out.

Sometimes the grueling internships lead to steady jobs, often with equally grueling hours.  That is considered a success.  Other times workers give up on their dream career after years of serial internships, and get a practical job to pay the bills.  That is simply considered reality.  I recently heard a story about an aspiring teacher who interned at a Washington D.C. area women’s advocacy group for about a year, and then was finally able to get an administrative job for a lobbying firm.  One of her main goals was staying in DC, so things have worked out all right for now.

Related:  Unpaid internships – the good, the bad, and the ugly (Cost of College)

Deconstructing the college premium – it depends on major and ability bias

The college premium is derived from several elements.

The college premium of better pay and job prospects should be considered as a composite of several elements, not all directly resulting from actual college attendance.  The premium can be affected by the amount of genuine learning (influenced by major and institution), ability bias, signaling capacity, and other factors.  A hard-working computer science MIT graduate with a 130 IQ will likely enjoy a higher college premium  than a lackadaisical ethnic studies major with a 100 IQ who graduated from a directional state college.  Even if neither attended college, the MIT-wannabee would still probably out-earn the second individual.  [Edited to add that these comments refer to actual dollar amounts.  In terms of percentages, I can see how the slacker kid could have a higher college premium.]

Bryan Caplan has written extensively on this topic, including a recent post about how ‘stronger students typically choose harder – and more lucrative – majors’.

Economists usually talk about the college premium, but the college premium heavily depends on your major.  At the same time, though, stronger students typically choose harder – and more lucrative – majors.  Thus, the college premium is doubly infected by ability bias: People who would have made more money anyway are more likely to go to college, and college graduates who would have made more money anyway are more likely to select demanding majors.

Incorporating this information, Caplan calculated the premium for various majors.  Here are the top five, broken down by gender.
…

EARNINGS COMPARED TO H.S. GRADS

Major	Males	Females
Electrical engineering	+63%	+72%
Computer Science	+61%	+63%
Mechanical engineering	+61%	+72%
Finance	+61%	+55%
Economics	+60%	+59%

…
While Caplan admits these figures “lack the precision of Planck’s constant”, he considers them better than much of the information typically available to high school seniors.  Although as I look at this table, I’m not exactly sure how I would use the data in advising a particular student.  He also notes the relatively high rank of economics,  confirming his belief that ”Economics is the highest-paid of all the easy majors.”

Maybe men are smart to skip college

Percent of U.S. Adults Ages 25-29 With a Bachelor’s Degree or Higher, 1969-2009

Maybe men are avoiding college because it offers them a lower ROI compared to women, at least in the short term.

Men without college degrees face better job prospects than equivalently educated women, at least in the short term. That makes the consequences of dropping out appear smaller for men.

The paper, by sociologists Rachel Dwyer and Randy Hodson of Ohio State University and Laura McCloud of Pacific Lutheran University, used data from the National Longitudinal Survey of Youth to look at the educational and employment experiences of more than 6,500 Americans born between 1980 and 1984. Unsurprisingly, going to college boosted earnings for both men and women. But the gap was much wider for women. After controlling for various demographic factors, the researchers found that female graduates earned more than $6,500 more per year than women with just a high school diploma, and more than $4,500 more than women who dropped out of college. Male graduates, by contrast, earned only about $2,700 more than high school graduates, and about the same amount as male college drop-outs.

The findings are consistent with past research, which has showed that jobs are much more gender-segregated in low-education occupations. Female drop-outs tend to concentrate in low-paying service-sector jobs, whereas less-educated men are more likely to find work in better-paying industries such as manufacturing and construction.

“Women experience a much larger immediate economic penalty for not graduating from college than do men,” the authors write. “Female dropouts simply face worse job prospects than do male dropouts.”

This might play a role in motivating women to do well in high school.

“Young men who see high school friends with relatively well-paying jobs may resist taking on debt to gain a degree with uncertain returns,” the authors write. “At the same time, young women who see friends in low-paying female-dominated jobs, such as retail cashier or day care worker, may be spurred to stay in school, even with debt.”

Over the long term, skipping college may not be such a smart move.

… The wage gap between men with and without bachelor’s degrees starts small but grows over time as better-educated men enjoy more opportunities for career advancement. And as the recession showed, those well-paying jobs in construction and manufacturing can disappear quickly and be slow to return….

Related:

• Lack of college-educated men may be a reason for declining marriage numbers (costofcollege.wordpress.com)
• College Graduation Score: Women 30%, Men 22% (businessweek.com)

Lack of college-educated men may be a reason for declining marriage numbers

The lack of college-educated men may signal more problems for the future of marriage.

The importance of marriage is on the rise among women while decreasing among men.

 … According to Pew Research Center, the share of women ages eighteen to thirty-four that say having a successful marriage is one of the most important things in their lives rose nine percentage points since 1997 – from 28 percent to 37 percent. For men, the opposite occurred. The share voicing this opinion dropped, from 35 percent to 29 percent.

Gender imbalance may be creating an obstacle to marriage for college-educated women.

… Across the United States today, young women are much more likely to graduate from college than their male peers, a trend that’s been compounding itself for a few decades now. And because college graduates overwhelmingly tend to date other college graduates, that’s created an enormous imbalance in the national dating pool. In Portland, the situation is particularly dire. According to the Census Bureau’s American Community Survey, there are 33 percent more women in Portland who are under the age of 35 and have at least a bachelor’s degree in than there are men. That’s on par with New York, which is notorious for its lopsided gender ratio.  

Marriage is on the decline, and the lack of college-educated men suggests a continuation of this trend for highly educated women, a group that has been most resistant to the trend so far.

Where to find college-educated men
Recently I was at local watering hole on one of their ladies’ nights, a practice I mistakenly thought had been ruled illegal.  By the looks of the crowd, I would say that young women looking for college-educated men of marrying age might want to check this place out.  Promoting itself as “definitely worth the 30 minute train ride from” New York City, this establishment might be especially attractive to NYC women who are experiencing the effects of that city’s gender imbalance.  But considering the long-term trend, I wonder if we’ll soon be seeing “men’s nights” at these types of places.

Related:

• College-educated women marry at higher rates (Cost of College)
• College Graduation Score: Women 30%, Men 22% (businessweek.com)
• The Worst Cities for College-Educated Women Trying to Find a Decent Date (The Atlantic)

A college degree has become the new high school diploma

Megan McCardle on how a college degree has become the new high school diploma:

… the BA is becoming what a high school diploma became before it: a signal to employers that you are not stupid, lazy, or poor enough to drop out before you’ve finished your education.

This method of signaling is inefficient, a huge waste of resources.

 … That’s valuable for the employers, but it’s increasingly expensive for the students, without necessarily preparing them to better do their work.  And it’s far from clear that it’s worth removing people from the workforce for four years in order to prepare them to do sales, or manage an office.

McCardle wrote in response to a recent New York Times “lengthy article exploring this phenomenon through the lens of a law firm which requires everyone, even the lowliest clerical worker, to have a college degree”.

This built-in inefficiency has its roots in a dysfunctional K-12 educational system and the government’s misguided intervention into higher education funding.  Too many high school graduates that are poorly prepared for college or career are being subsidized to enroll in colleges with watered down standards.

The old model is no longer working.

I recently chatted with a friend who had pushed her two sons to attend college even though they were not strong “college material”.  After they received their degrees from lower-tier schools, both went on to start their own businesses.  Both are doing well, but neither has really ever used or needed their college education in their line of work.  However, as my friend explained, both had very good college experiences.  For them, it was a time to mature, have fun, and learn about different types of people and places.

Growing up and learning new things can occur in many places other than on a college campus, usually at a much lower price.  But because we see how employers use college as a sifting tool for employment, we are forcing college on many people who don’t need it.  We do this at great expense, both in terms of money and opportunity cost.  The soaring rise in college costs, a faltering economy, and technological advancements are causing big changes in this system, although it’s still anybody’s guess what exactly the next model will be.

Related:

• ‘The smart high school grad no longer just picks a school, borrows money and wings it.’ (Cost of College)
• Too many college graduates are chasing too few college-level jobs (Cost of College)
• College graduates are no longer ‘special’ (Cost of College)

There is little evidence that increased education spending drives economic growth

JONAH GOLDBERG: Education is important and necessary for a host of reasons. But there’s little evidence it drives growth.

Questioning whether increased education spending is really the key to “winning the future”

British scholar Alison Wolf writes in “Does Education Matter?”: “The simple one-way relationship … — education spending in, economic growth out — simply does not exist. Moreover, the larger and more complex the education sector, the less obvious any links to productivity.”

Nasim Taleb, author of “Antifragile: Things That Gain From Disorder,” argues that education pays real benefits at a micro level because it allows families to lock in their economic status. An entrepreneurial father can ensure his kids will do OK by paying for them to become doctors and lawyers. But what is true at the micro level is not always true at the macro level.

Think about it this way: Growing economies spend a lot on education, but that doesn’t necessarily mean that spending makes them grow. During the so-called Gilded Age, the U.S. economy roared faster and longer than ever before or since, while the illiteracy rate went down. But the rising literacy didn’t cause the growth. Similarly, in the 20th century, in places like China, South Korea and India, the economic boom — and the policies that create it — always come first while the investments in education come later.

Jarrett Skorup looks at higher education spending.

There is no link between higher education subsidies and economic growth, and none between college degrees and job creation.

Since 1980, Michigan has spent a much higher proportion of personal income on state government support for higher education than nearby states like Illinois and Ohio. According to Ohio University economist Richard Vedder, by the year 2000, the Mitten State was spending the sixth most in the country (2.34 percent of its personal income), double what Illinois was spending and much more than Ohio. This did not lead to higher growth as Michigan’s economy performed among the worst in the country during that time period.

And states with a higher proportion of college graduates do not necessarily grow by adding more college degrees. A comparison of the number of state residents with a college degree with per capital income growth from 2000-2008 yields no correlation.

James M. Hohman of the  Mackinac Center for Public Policy sees “no correlation between a state increasing its college graduate base and growing its economy”.

If the hypothesis promoted by Glazer and the lobbyists engaged by Michigan’s tax-supported public universities was correct, the various points on this chart would be clustered around an upward sloping line, as states with higher growth in the number of grads also enjoyed relative improvements in income. However, no such trend line exists.

Another chart that built in a lag time also showed no correlation.

… The chart below compares state grad growth between 2000 and 2005 and income growth in the three succeeding years; once again no pattern can be detected.

So many factors enter into economic growth, making it believable that education spending would not be a driving factor.

Related:

• Federal ‘investments’ can’t guarantee growth (kansascity.com)
• Phil Power: Michigan politicians starve the engines of economic growth: universities (mlive.com)

If you want a job at an elite firm . . .

Last year the Chronicle of Higher Education gave us the lowdown on the specific circumstances where it can be extremely important to attend a particular name brand elite college.

If you want to get a job at the very best law firm, investment bank, or consultancy, here’s what you do:

1. Go to Harvard, Yale, Princeton, or (maybe) Stanford. If you’re a business student, attending the Wharton School at the University of Pennsylvania will work, too, but don’t show up with a diploma from Dartmouth or MIT. No one cares about those places.

2. Don’t work your rear off for a 4.0. Better to graduate with 3.7 and a bunch of really awesome extracurriculars. And by “really awesome” I mean literally climbing Everest or winning an Olympic medal. Playing intramurals doesn’t cut it.

This comes from a study where Lauren Rivera of Northwestern University interviewed insiders at these elite firms.

Keep in mind this study focused on very specific career paths.  If a student is truly interested in a high-powered investment banking career or something similar, then paying for that gold-plated college degree might be worth it.  But how many 18-year-olds really know they want the lifestyle entailed in working for a white-shoe firm?  For those who are committed to this particular plan, Bryan Caplan offered a summary of the winnowing process that is conducted in the human resources offices of these employers.

1. Most applications practically go straight in the trash…

2. Evaluators have a lot of slack…

3. Super-elite credentials matter much more than your academic record…

4. Super-elite schools matter because they’re strong signals, not because they’re better at building human capital…

5. At least in this elite sample, I’m totally wrong to think that extracurriculars don’t matter. … But they have to be the right kind of extracurriculars.  You have to signal that you’re not signaling!…

6. Grades do matter somewhat, but mostly as a cut-off.  They’re a signal of work ethic more than IQ…

The credentialing game starts young.

Robert Teitelman pointed out that the process ensures these top firms will be staffed only with individuals who had the good fortune to be able to play the credentialing game that begins at a relatively young age, and essentially culminates at age 18 in the college admissions process.

On the face of it, there’s a quality to Rivera’s conclusions that seems pretty obvious. Anyone who’s been around Wall Street and consulting — or anyone with a teenager suffering through college admissions — knows the pressure that exists to get students into “elite” schools, however defined, in order to slot them onto a transmission belt to high-paying jobs, mostly at what Rivera calls the elite professional-services firms. This is the core of the myth that drives so much of upper-middle-class child rearing: the necessity of getting the tyro into Harvard or other elite universities, not for any educational attainments (so impractical), but for the effect it supposedly has on future prospects. Rivera is essentially putting flesh on those ghostly bones; she’s arguing that decisions made in college admissions — good, bad or indifferent — play a determinative role in where you go to work and how much money you make. She is not only offering empirical backing to the mania for, say, elite kindergartens and endless tutors, but she’s significantly raising the stakes: only the “top” matters. This is remarkable if only for the fact that college admissions, for all its importance, is about as scientific as necromancy.

The system is ”terrible for organizations”.

It’s a bit frightening to realize that employment among these firms essentially relies on the signaling granted by admissions to these elite schools.  As Megan McCardle explained, this system is ‘a convenient shorthand for a group of people who are really busy” and is “terrible for organizations”.

The Ivy League is full of smart, interesting people.  But it is not full of all of the smart, interesting people in the country, or even a majority of them.  And given the resumes required to get there, it produces a group of people who are narrow in certain predictable ways….

This requirement to get the “right” degree from the “right” college to enable you to get the “right” job also exists in other fields.  Here’s an example from the world of music.

In my subfield of music, we have a version of the above phenomenon which determines who gets jobs. There is a short list of maybe half a dozen cronies who basically run the profession, and if you manage to get into their grad programs, you will get whatever top jobs are out there in a given hiring season. Jobs are filled with a phone call.

As someone else mentioned, the current market conditions don’t help things. If a committee has to weed people out of a stack of 200 applications, the pedigree is a quick (and dirty) method of winnowing the list without bothering to look at other aspects of the applications.

Choose your graduate program carefully and with full knowledge that you will be sealing your own fate before you even hit the campus.

A broader lesson for those in the college search and selection process:  Consider how important the particular school and/or department is in the trajectory of your desired career.  In some cases it might be a determining factor, but in most cases it is not so consequential.

Are more kids ‘Saying No to College’?

I’m not yet buying that this is a trend.  After all, this is from the New York Times, once described as the “font of bogus trend stories”.

The idea that a college diploma is an all-but-mandatory ticket to a successful career is showing fissures. Feeling squeezed by a sagging job market and mounting student debt, a groundswell of university-age heretics are pledging allegiance to new groups like UnCollege, dedicated to “hacking” higher education. Inspired by billionaire role models, and empowered by online college courses, they consider themselves a D.I.Y. vanguard, committed to changing the perception of dropping out from a personal failure to a sensible option, at least for a certain breed of risk-embracing maverick.

Risky? Perhaps. But it worked for the founders of Twitter, Tumblr and a little company known as Apple.

We need more dog walkers and fewer managers.

“College is training for managerial work, and the economy doesn’t need that many managers,” said Michael Ellsberg, the author of “The Education of Millionaires: Everything You Won’t Learn In College About How to Be Successful.”

Mr. Ellsberg, 35, graduated from Brown University and spent years trying to translate his expertise in post-colonial critical theory into a paying career. So his book tries to impart real-world skills, like salesmanship and networking, which he argues are crucial as white-collar jobs are being downsized or shipped to Bangalore. The future, he added, belongs to job creators, even if the only job they create is their own.

“I’m not saying you have to be Mark Zuckerberg or Steve Jobs,” Mr. Ellsberg said. “I know people with dog-walking businesses who make six figures.”

A teenage character from “The Mindy Project” sitcom explains why he’s skipping college.

“Why should I load up on debt just to binge drink for four years when I could just create an app that nets me all the money I’ll ever need?” Such tales play well in the eyes of millennials, a generation hailed for their entrepreneurial acumen and financial pragmatism. Why pay money if you can make money?

Good luck with that.  No really, good luck.  Good luck to all young adults, because today “40% of all federal spending is borrowed, so that our children will have to pay for it“.