The proposition that I hereby lay before the house is that the BA degree is the work of the devil. It wreaks harm on a majority of young people, is grotesquely inefficient as a source of information for employers, and is implicated in the emergence of a class-riven America.

Before explaining why, let me specify a few things that I am not arguing.

I am not complaining that too many people are getting education after high school. On the contrary, I am in favor of education after high school for almost all young people.

I am not denying that that possession of a BA is statistically associated with higher income across the life span, and that this economic benefit persists after controlling for measures of human capital (e.g., IQ scores), field of study, and other background variables.

I am not disparaging the value of a liberal education, classically understood. On the contrary, I think far too few young people are exposed to the stuff of a liberal education (that’s the last I’m going to say on that issue in this presentation. There’s a long discussion of liberal education in the book.)

Why the Current System Doesn’t Make Sense

So what’s my beef with the current system? Perhaps the easiest way to introduce the argument is to ask you to imagine that you have been made a member of a task force to design America’s post-secondary education system from scratch. One of your colleagues submits this proposal:

First, we will set up a single goal to represent educational success, which will take four years to achieve no matter what is being taught. We will attach an economic reward to it that often has nothing to do with what has been learned. We will urge large numbers of people who do not possess adequate ability to try to achieve the goal, wait until they have spent a lot of time and money, and then deny it to them. We will stigmatize everyone who doesn’t meet the goal. We will call the goal a “BA.”

You would conclude that your colleague was cruel, not to say insane. But that’s the system we have. It doesn’t make sense. Here’s why:

…which will take four years to achieve no matter what is being taught.

Four years makes sense for students who are trying to get a liberal education and therefore need to take a few dozen courses in philosophy, religion, classical and modern literature, the fine arts, classical and modern history (including the history of science), plus acquire fluency in a foreign language and take basic survey courses in the social sciences. The percentage of college students who want to do that is what? Ten percent? Probably that is too optimistic. Whatever the exact figure, it is a tiny minority.

For everyone else, four years is ridiculous. Assuming a semester system with four courses per semester, four years of class work means thirty-two semester-long courses. The occupations that require thirty-two courses are exceedingly rare. In fact, I can’t think of a single example. Even medical school and Ph.D.s don’t require four years of course work. For the student who wants to become a good hotel manager, software designer, accountant, hospital administrator, farmer, high-school teacher, social worker, journalist, optometrist, interior designer, or football coach, the classes needed for the academic basis for competence take a year or two. Actually becoming good at one’s job usually takes longer than that, but competence in any profession is mostly acquired on the job. The two-year community college and online courses offer more flexible options than the four-year college for tailoring academic course work to the real needs of students.

…attach an economic reward to it that often has nothing to do with what has been learned.

The BA really does confer a wage premium on its average recipient, but there is no good reason that it should.

First, consider professions in which the material learned in college is useful for job performance, such as engineering, the sciences, and business majors. Take the specific case of accounting. It is possible to get a BA (I use BA as a generic term embracing the BS) in accounting. There is also the CPA exam required to become a Certified Public Accountant. The CPA test is thorough (four sections, timed, totaling fourteen hours). To achieve a passing score indicates authentic competence (the pass rate is below 50 percent for all four tests). Actual scores are reported in addition to pass/fail, so that employers can assess where the applicant falls in the distribution of accounting capability. If I am an employer of accountants and am given the choice between an applicant with a mediocre CPA score but a BA in accounting and another who studied accounting on-line, has no degree, but does have a terrific CPA score, explain to me why should I be more attracted to the applicant with the BA

The merits of the CPA exam apply to any college major for which the BA is now used as a job qualification. To name just some of them: journalism, criminal justice, social work, public administration, and the many separate majors under the headings of business, computer science, engineering, engineering technology, and education. Such majors accounted for almost two-thirds of bachelor’s degrees conferred in 2005. In every one of those cases, a good certification test would tell employers more about the applicant’s skills than the BA does.

Now consider job applicants for whom the material learned in college is, to put it charitably, only indirectly related to job performance. I am referring to people like me (BA in Russian history), and BAs in political science, sociology, English lit, the fine arts, and philosophy, not to mention the flakier majors (e.g., gender studies). For people like us, presenting a BA to employers amounts to presenting them with a coarse indicator of our intelligence and perseverance. If we have gone to an elite college, it is mostly an indicator of what terrific students we were in high school (getting into Harvard and Duke is really tough, but getting through Harvard and Duke for students not in math or science is really easy).

Yes, the wage premium for college is associated with these majors as well, but please don’t tell me it’s because employers think college augmented our human capital. Employers are not stupid. They know that college might have augmented our human capital. Occasionally, college does teach students to become more rigorous thinkers and writers, and those are useful assets to take into a job. But employers also know that it would be foolish to assume that the typical college graduate has sought out the most demanding teachers and slaved over the syntax and logic of his term papers. The much more certain implication of the BA is that its possessors have a certain amount of raw intellectual ability that the employer may be able to exploit after the proper job training.

Finally, consider the hundreds of thousands of students who go to college just because they have had it pounded into their heads since childhood that the good jobs require a BA The wage premium that shows up in regression equations may or may not apply to them. In Real Education, I offer an extended example involving a hypothetical young man graduating from high school who is at the 70^th percentile in intellectual ability–smart enough to get a BA in today’s world–but just average in intrapersonal and interpersonal ability. He is at the 95^th percentile in the visual-spatial and small motor skills useful in becoming a top electrician. He is trying to decide whether to go to college, major in business, and try to become a business executive, or instead become an electrician.

The bottom line of the example is that he cannot compare the mean income of business managers to the mean income of electricians. If his configuration of abilities means that he could get a BA in today’s colleges, but his cognitive and interpersonal skills are minimal for success in business, he has to recognize that he will be at a huge disadvantage in the competition for promotions after he gets his entry-level white-collar job. The relevant income figures are those for people in the bottom few deciles of the distribution of income for business managers. If his configuration of abilities means that he could become an excellent electrician, he needs to focus on the income of electricians in the top few deciles of that distribution.

We will urge large numbers of people who do not possess adequate ability to try to achieve the goal, wait until they have spent a lot of time and money, and then deny it to them.

Historically, an IQ of 115 or higher was deemed to make someone “prime college material.” That range comprises about 16 percent of the population. Since 28 percent of all adults have BAs, the IQ required to get a degree these days is obviously a lot lower than 115. But the cognitive ability required to cope with genuine college-level material has not changed. A recent study of “college readiness” by the College Board asked what SAT scores were required to have a 65 percent chance of maintaining a 2.7 grade average in the freshman year in a sample of 41 major institutions that included both state universities and elite schools. The answer was a combined SAT Verbal and Math score of 1180, a score that only about ten percent of 18-year-olds could get if everyone took the SAT. Nor was this requirement inflated by the inclusion of the elite colleges in the sample-the difference in the benchmark scores for unselective and selective universities was a trivial 23 points.

So even though college has been dumbed down, it is still too intellectually demanding for a large majority of students, in an age when about 50 percent of all high school graduates are heading to four-year colleges the next fall. The result is lots of failure. Of those who entered a four-year college in 1995, only 58 percent had gotten their BA five academic years later. Another 14 percent were still enrolled. If we assume that half of that 14 percent eventually get their BAs, about a third of all those who entered college hoping for a BA leave without one, often after accumulating a large student-loan debt.

If these numbers had been produced in a culture where the BA was a nice thing to have but not a big deal, they could be interpreted as the result of young adults deciding that they didn’t really want a BA after all. Instead, these numbers were produced by a system in which having a BA is a very big deal indeed, and that brings us to the increasingly worrisome role of the BA as a source of class division.

We will stigmatize everyone who doesn’t meet the goal.

The United States has always had symbols of class, and the college degree has always been one of them. But through the first half of the twentieth century, there were all sorts of respectable reasons why a person might not go to college–not enough money to pay for college; needing to work right out of high school to support a wife, parents, or younger siblings; or the commonly held belief that going straight to work was better preparation for a business career than going to college.

As long as the percentage of college graduates remained small, it also remained true, and everybody knew it, that the majority of America’s intellectually most able people did not have BAs. Over the course of the twentieth century, three trends gathered strength. The first was the increasing proportion of jobs screened for high academic ability due to the advanced level of education they require–engineers, physicians, attorneys, college teachers, scientists, and the like. The second was the increasing market value of those jobs. The third was the opening up of college to more of those who had the academic ability to go to college, partly because the increase in American wealth meant that more parents could afford college for their children, and partly because the proliferation of scholarships and loans made it possible for most students with enough academic ability to go. The combined effect of these trends has been to overturn the state of affairs that prevailed through World War II. Now the great majority of America’s intellectually most able people do have a BA.

Along with that transformation has come a downside that few anticipated. The acceptable excuses for not going to college have dried up. The more people who go to college, the more stigmatizing the failure to complete college becomes. Today, if you do not get a BA, many people assume it is because you are too dumb or too lazy. Face it: To say “I’m just a high school graduate” as of 2008 is to label oneself in some important sense as a second-class citizen. No amount of protestations of egalitarianism by people who like the current system (i.e., people who do well in an academic setting) will change that reality-a reality fostered by a piece of paper that for most students in most majors is close to meaningless.

Testing Is Ideal

And so I have taken as my mission to do everything I can to undermine the BA. The good news is that the conditions are right for change. There is a diverse world of work out there, filled with jobs that are interesting, well-paying, and intrinsically rewarding, that do not call for the kind of training that colleges are designed to provide. There is a vital and growing world of on-line education that is revolutionizing the possibilities for delivering post-secondary education.

No technical barriers stand in the way of evolving toward a system where certification tests would replace the BA. Hundreds of certification tests already exist, for everything from building code inspectors to advanced medical specialties. The problem is a shortage of tests that are nationally accepted like the CPA exam. But when so many of the players would benefit, a market opportunity exists. If a high-profile testing company such as the Educational Testing Service were to reach a strategic decision to create definitive certification tests, it could coordinate with major employers, professional groups and nontraditional universities to make its tests the gold standard. A handful of key decisions could produce a tipping effect. Imagine if Microsoft announced it would henceforth require scores on a certain battery of certification tests for all of its programming applicants. Scores on that battery would acquire instant credibility for programming job applicants throughout the industry.

In my ideal system, the college campuses of America will still exist and they will still be filled with students. Some of those students will be staying for four years as before, but many others will be arriving and leaving on schedules that make sense for their own goals. The colleges in my ideal system will have had to adapt their operations to meet new demands, but changes in information technology are coming so fast that major adaptation is inevitable anyway.

The greatest merit of my ideal system is this: Hardly any jobs will still have the BA as a requirement for a fair shot at being hired. Employers will rely more on direct evidence about what the job candidate knows, less on where it was learned or how long it took.

To me, the most important if most intangible benefit of my ideal system is that the demonstration of competency in European history or marketing or would, appropriately, take on similarities to the demonstration of competency in cooking or welding. Our obsession with the BA has created a two-tiered entry to adulthood, anointing some for admission to the club and labeling the rest as second-best.

Here’s the reality: Everyone in every occupation starts as an apprentice. Those who are good enough become journeymen. The best become master craftsmen. This is as true of history professors and business executives as of chefs and welders. Getting rid of the BA and replacing it with evidence of competence–treating post-secondary education as apprenticeships for everyone–is one way to help us to recognize that common bond.

—

Charles Murray is the W.H. Brady Scholar at the American Enterprise Institute and author of “Real Education: Four Simple Truths for Bringing America’s Schools Back to Reality.”

If the BA is the work of the devil, it’s not his best work. So why is Charles Murray making such a big fuss?

Murray gives us a simple argument. For most people, completing a BA is a bad investment. Each of us has his or her own comparative advantage, so not all of us should become college graduates. In spite of this, a large share of the American youth aspires to get a BA, either because of strong social pressure to get a BA, or the illusion that the BA pays off for everyone in the labor market.

There’s nothing wrong with the logic of this argument. In fact, you will see that I agree with important parts of it. But is it empirically relevant? Perhaps, but for the most part it seems exaggerated.

Economists have been estimating the rate of return to investments in education for over 50 years.  By that I don’t just mean a statistical association between high levels of education and high earnings, one which we can attribute to the fact that highly educated people are also more intelligent and well connected, and therefore they would have higher earnings even if they had not acquired schooling. Economists have moved beyond statistical associations, and are now able to show that the average earnings of individuals increase in response to increases in their levels of education (which come by forcing them to enroll in school, by giving them monetary incentives, or by any other means). It is well accepted that in the U.S. this increase in earnings is, on average, not much lower than 10% per year of schooling. Estimates can be even higher if you take the return to a BA (as opposed to the return to a year of education multiplied by four). If this is true, education is a very productive investment, and by this standard it beats most other investments in the economy.

Even if we believe the economists’ estimates of the return to education, averages are not very useful for any given person pondering whether to take up a BA. The reason is that every individual is different, so even if a BA pays off for a few individuals, and even if it pays off when we average across people, it may not pay off for most people. Each of us has different skills giving us a comparative advantage in a given occupation, and acquiring a college education is not everyone’s comparative advantage. This is a central component of Murray’s argument, and one with which I agree completely.

Of course, as with any other investment, there is risk in the investment in human capital, and at age 17 most of us do not know how good a college graduate we will be. Once the BA is completed, some BA graduates may regret their decision to complete a BA, but at age 17 they could not forecast that they would be at the low end of the distribution of college wages. Some others, who are not able to complete their BA, may regret they even started. Even though this has been shown to be important empirically, risk is not what is upsetting Murray. Risk is a natural part of decisionmaking. What he is claiming is that many individuals are being induced to enroll in a BA program because of social pressure, even when it is clear that a BA is a bad idea for them.

So how successful is this argument in explaining the data? Recent research shows that, empirically, the expected rate of return to college varies widely across individuals: As we expand college attendance we attract individuals who are increasingly less suitable to attend college, and who have lower expected returns to college than the ones who are already there. Nevertheless, these studies also show that most people can expect a relatively high return to college. Even if we take the most pessimistic estimates for the return to education for those outside the elite (whom economists would call the marginal students), they are probably above 7% per year of college, and they are not lower for a year of a BA as opposed to a year of any other type of post-secondary schooling. Individuals for whom a BA degree is truly a bad idea are just not enrolling in college anyway. In fact, the best predictor of college enrollment, or of completion of a BA, is cognitive ability, and most individuals with low levels of cognitive ability end up never enrolling in college.

So, what’s the punch line? Murray is correct in stating that a BA is not for everyone, and may be right in saying that some people are wasting their time getting a BA, but for most of the population I doubt that the case he is making is of great importance. As he says, firms are not stupid, and will not pay for a BA degree if a BA is not teaching anything to their potential recruits. Similarly, I believe that individuals make mistakes, but at this level they are probably not as serious as Murray is implying. For most of those enrolling in college, a BA has a good expected return, but there is some risk. In a nutshell, this is what the data shows, at least according to recent research by James Heckman from the University of Chicago and several co-authors, me included.

Do we really think that social pressure to get a BA, and misinformation about the value of a BA, will induce generations of youth (and their parents!) to systematically engage in bad education decisions? Why would they be doing that over and over again, if it was such a bad investment? Charles Murray is not the first to state that individuals overestimate the returns to college. Almost 30 years ago, in The Overeducated American, Richard Freeman had a similar argument, but the decade that followed the publication of his book witnessed a dramatic increase in the returns to college and in college attendance. Why is this argument correct today?

Perhaps Murray is right, and we need a more specialized and shorter post-high school education system, like in an apprenticeship system. Or perhaps we need to keep people in school for a bit longer learning general skills that allow them to be flexible in the modern world. I don’t know the answer to this question, and in spite of what I have said so far, I don’t disagree with Murray’s proposition that the school system could be more efficient, and more adequate to the economy’s needs. If that’s the case, we need to converge to a better system, and we are already seeing several changes in the way people acquire education, with a multitude of new programs and online courses emerging every day. I may be young and inexperienced, and I am no Charles Murray (I say this with admiration and respect), but I do not think this problem is such a big deal.

However, there is something else that I believe is a big deal. In 2003, Jim Heckman and I published a paper entitled Human Capital Policy (a chapter in Inequality in America: What Role For Human Capital Policies, edited by the MIT Press). Figure 1 in that paper, which is reproduced below (and which has been reproduced by many others, before and after us), graphs the proportion of individuals in successive cohorts attaining a college degree, a high school degree, and dropping out of high school (these are whites only, but similar patterns hold for other race groups; the data comes from the 2000 Current Population Survey). This figure shows that both the college enrollment rate and the high school dropout rate were rapidly improving for the cohorts born in the first half of last century, but for the cohorts born after 1950 there is a dramatic stagnation in education attainment. If education is an important engine of economic growth, a stagnant quality of the workforce may cause problems for growth in the years to come.

This stagnation occurred in spite of enormous increases in the returns to college in the 1980s and 1990s. So it may be that Murray’s contention that individuals are not responding to economic incentives is true, but if anything it is because they, or their parents, underestimate the value of education. Heckman and I argue that at very early ages we detect important gaps in the cognitive achievement of individuals coming from different backgrounds, which in turn are the main predictor of the gaps in their college enrollment. So, if we want to foster skill accumulation, we need to start with strong investments in early childhood, giving us a foundation on which follow up investments can successfully build on. That’s the real education problem, and that’s where the devil is really causing damage. But that discussion is not for today.

–

Pedro Carneiro is Lecturer in Economics at University College London

Charles Murray has once again pointed his finger at the obvious, and asked social scientists, “Have you ever noticed that?”  “Have you ever noticed that welfare gives bad incentives?”  (Losing Ground.)  “Have you ever noticed that some people are smarter than others?” (The Bell Curve.)  Now he’s pointing his finger at higher education, and asking us: “Have you ever noticed that colleges don’t teach a lot of job skills?”

In past instances, social scientists’ first response to Murray was to wrinkle their noses in disgust: “How dare he?”  But within a few years, Murray’s common-sense questions changed the way we think.  Can his new book on higher education repeat his past success?

It should, but as Murray now frames his argument, it won’t.  To once again profoundly change the social sciences, he’s going to need both important neglected facts and a clear story (or “model”) that explains them.

Murray is already doing well on the “important neglected facts” front, boldly pointing out that:

1. Only a tiny minority of students want or are capable of getting a liberal education.

2.  For all other students, “[F]our years is ridiculous. Assuming a semester system with four courses per semester, four years of class work means thirty-two semester-long courses. The occupations that require thirty-two courses are exceedingly rare.”

3.  Although students acquire few job skills in college, employers pay them extra anyway.  “Yes, the wage premium for college is associated with these majors as well, but please don’t tell me it’s because employers think college augmented our human capital.”

I have been in school continuously for over three decades, and all of Murray’s observations match my experience.  As a college professor, my job is to teach the material I learned when I was a student — and even I have to admit that there is only a weak connection between what I studied and what I need to know to do my job.  For students who leave academia (i.e., almost all of them), the connection between what they studied and what they need to know to do their job is virtually non-existent.

So far, Murray and I are on the same page.  But when he tries to explain how useless studies translate into big bucks, his story gets fuzzy.  On the one hand, he tells us that “The BA really does confer a wage premium on its average recipient, but there is no good reason that it should.”  On the other hand, he insists that “Employers are not stupid.”  How can both be true?

Even stranger, Murray often talks as if the entire labor market were centrally planned by university committees.  Perhaps I am being too literal.  But it is one thing for Murray’s imaginary education task force to say, “Let’s reify the BA.”  It is quite another for a task force — even an imaginary one — to say, “We will attach an economic reward to it that often has nothing to do with what has been learned.”  What’s wrong with this picture? Universities don’t “attach economic rewards” to their degrees.[1] That decision is up to millions of competing, consenting employers.  Unless higher education convinces employers that workers with BAs are more productive than workers without, the BA won’t have any “economic rewards.”

Of course, employers aren’t infallible.  But they have a strong incentive to see through academic hype.  When firms overpay the overeducated — or needlessly “stigmatize” applicants without a BA — the market charges them for their mistake.

Another paradox in Murray’s presentation: On the one hand, he paints the BA as a force of nature.  It’s powerful enough to demote high-school grads to “second-class citizens.”  On the other hand, though, Murray feels that “conditions are right for change” – even though most of his “conditions” have been around for decades.[2] Bottom line: If “a handful of key decisions could produce a tipping effect,” why haven’t they already done so?

If Murray can’t clarify his model, no one is going to take his facts seriously.  Fortunately, I can help.  Here’s what Murray should have said: “To a large extent, the BA is what economists call signaling.  Individual students who go to college usually get a good deal; so do individual employers who pay a premium to educated workers.  The problem is that this individually rational behavior is socially wasteful, because education is primarily about showing off, not acquiring job skills.”

At one point, of course, Murray alludes to the signaling model:

For people like us [liberal arts majors], presenting a BA to employers amounts to presenting  them with a coarse indicator of our intelligence and perseverance. If we have gone to an elite college, it is mostly an indicator of what terrific students we were in high school…

Unfortunately, he doesn’t take his own pointed observation seriously.  Consider: If the BA is a signal of intelligence and perseverance, why haven’t certification tests caught on?  The obvious explanation is that the first people in line to take the test would have high intelligence but low perseverance.  After all, if they are smart enough to do well on the test, why are they so eager to avoid college?  Are they lazy or something?[3] Consider further: If elite college is mostly a signal of terrific high school performance, why don’t employers poach the nation’s top high school grads before they set foot at Harvard?  Perhaps employers would wind up hiring the top slackers of the Ivy League.  The best students wouldn’t be looking for an easy way out.

An unfortunate implication of the signaling model is that cutting the BA down to size will be a lot harder than Murray thinks.  As far as employers are concerned, the BA works.  When they pay college grads more, they get their money’s worth.  You can try jawboning Microsoft into switching to certification tests.  But can we really believe that Murray has seen a profit opportunity that Bill Gates hasn’t?

I’m not embracing fatalism — our education system could be a lot better.  If we want to get our wasteful education system back on track, though, we’ve got to make the BA less appealing.  The most obvious route is to cut government spending for education.  It’s just plain crazy for government to subsidize anyone who wants to signal that he’s smart and hard-working compared to other people.  After all, no matter how big the subsidies are, only half of us can look better than average.

Once students (and their parents) started paying a larger share of their tuition, Murray’s dream world might stand a chance.  Suppose, for example, that people really had to fork over $30,000 per year to attend college.  In this environment, there would be a strong demand for certification tests, apprenticeships, and so on, because many high-quality workers wouldn’t go to college.  As I often tell my students: In a world without education subsidies, they probably couldn’t afford college.  Happily, though, they also wouldn’t need it.

Notes

[1] Unless they hire their own students!

[2] Admittedly, the “vital and growing world of online education” is more recent.  But earlier – and equally “revolutionary” – technological changes have had little impact on higher education.  Consider the VCR.  It seems like a great substitute for faculty: Why pay for mediocre professors when you can record the best lecturers in the world and learn in the privacy of your own home?  In practice, though, it’s hard to see that the VCR has put more than handful of professors out of work.

[3] This is a standard explanation for why people with GEDs earn less than you would expect given their IQs.

—

Bryan Caplan is associate professor of economics at George Mason University and author of The Myth of the Rational Voter.

In the long history of the American 20th century, few decisions seem smarter in retrospect than the mass production of bachelor’s degrees. Starting with the G.I. Bill after World War II and continuing with the enormous expansion of state university systems and community colleges in the 1950s and 60s, huge efforts were expended to expand college access. When globalization pushed blue collars jobs overseas and technological advances ushered in the Information Age, America was well-positioned with the most educated workforce in the world.

Even that wasn’t enough to meet employer demand. As the supply of degree holders increased significantly from 1970 to 2000, the price of a BA in the labor market went steadily up, not down. Meanwhile, our foreign competitors have been straining to make up ground, investing billions in their national higher education systems while simultaneously sending tens of thousands of their students to American universities, all in pursuit of the perfect piece of 21^st century intellectual property: a portable, non-expiring, universally recognized credential of higher learning.

All of which is to say: There is a very high evidentiary bar for asserting, as Charles Murray does, that “the BA is the work of the devil.” It is a bar he does not come close to clearing. But in trying, he raises some important points about the flaws and failures of our higher education system. We don’t need fewer bachelor’s degrees. But we do need better bachelor’s degrees, and in this respect Murray’s arguments have value.

Murray believes that fewer than ten percent of people have the cognitive abilities necessary to earn a legitimate four-year degree. Space does not permit an exploration of the underlying arguments related to IQ and academic standards. I will simply note (and Murray acknowledges this) that over 30 percent of working-age adults currently have four-year degrees (at least) and assert that the evidence he presents suggesting that over two-thirds of those degrees are illegitimate is exceedingly thin and unpersuasive.

Murray would replace much of our current higher education system with a massive regime of workplace certification via standardized testing. Instead of wasting time in the futile pursuit of degrees that lie beyond their cognitive means, the vast majority of students would focus immediately on vocational training after completing high school. In support of this idea, he offers the example of accountants, who must pass the CPA exam. “The merits of the CPA exam,” Murray writes, “apply to any college major for which the BA is now used as a job qualification. To name just some of them: journalism, criminal justice, social work, public administration… business, computer science, engineering technology, and education.” Businesses, he says, could band together to create common professional standards and assessments to match. In Murray’s preferred future, students could bypass a traditional college education and go right to the test.

But that begs a question: If businesses would be better off under such a system, why haven’t they implemented it already? The accounting industry, for example, is dominated by just four companies—the so-called “Big Four”—with combined annual revenues of roughly $100 billion. If KPMG, Ernst & Young, et al. wanted people to be able to sit for the CPA exam without first earning 120 (or often 150) college credits, I imagine they would lobby state accounting boards to make the change, and apply significant resources to the effort. (I am told that large businesses have some influence over the government entities that regulate them, as well as state lawmakers.) Similarly, the rapidly consolidating newspaper industry could, if it wished, create a national CJ (Certified Journalist) exam. Tests, after all, are cheap compared to the cost of recruiting and retaining talented employees. The Washington Post already owns the largest test prep company in the nation.

Of course, none of these things are actually happening, and for good reason: Employers value the bachelor’s degree, and most professions aren’t as easily definable—and thus testable—as accounting. The fact that the world is not already the way Murray wishes it to be assumes a catastrophic ongoing failure of intelligence and rational self-interest on the part of the business community. (Admittedly, recent events on Wall Street make this more plausible.)

Murray’s proposal would also radically restrict access to the traditional liberal arts curriculum. The number of institutions offering such an education would contract to the familiar set of elite colleges on the coasts, while the rest would have to re-tool for vocational training. It is undoubtedly true that some people aren’t smart enough to master the complexities of philosophy, literature, and social science. But it’s also very difficult to decide ahead of time who those people are. America’s open, flexible labor markets constitute one of our great competitive advantages in the global economy, and that includes broad access to higher education. By ensuring that everyone can get accepted to college somewhere, and by using public funds to keep prices low, we maximize the chance that our future innovators, CEOs, and political leaders will find the higher education they need, regardless of their socioeconomic background.

Imagine, for example, a young man from a working-class background growing up in an apartment above a bank in a small town in Illinois. His high school interests run from sports to acting, and he aspires to be a broadcast journalist. In Charles Murray’s world, such a student would likely be counseled into a short-term training program to prepare for the national journalism test. Fortunately, Ronald Reagan had the chance to attend Eureka College, where he took to economics and sociology before going on to other things.

Indeed, Reagan’s life of unlikely career transitions points to the main benefit of a good college education: It teaches students not how to do but how to think in ways that are applicable across varied careers. And such skills are much more important to many more people now than they were eighty years ago. The future economy will hold vast numbers of jobs that have yet to be invented. The bachelor’s degree will qualify students to pursue all of them and graduate education besides, while a narrowly defined certificate, by definition, will not.

College is not, moreover, only about preparing for work. Higher education exposes students to our intellectual and cultural inheritance, to hard-won wisdom and works of surpassing beauty. Sometimes these things merely enrich students’ lives; sometimes they spur creation of new contributions to the human project. Locking students out of academia will worsen cultural divisions and leave more people to the depredations of a coarsening popular culture.

Murray points to the large number of students who drop out of college as evidence that we are cruelly forcing students to waste time and money pursuing a goal they are intellectually incapable of achieving. But this ignores virtually everything that has been learned about why students leave college. Most students who drop out don’t fail out. Rather, they leave for a complex set of reasons, including increasingly high costs, competing demands of work and family, and colleges that fail to provide an engaging, high-quality education. Students are more likely to stay in school if they’re learning, and they’re more like to learn when they’re well taught. Yet teaching is an afterthought in many colleges and universities, subsumed to the demands of research, athletics, fundraising, and the rest. The problem often is not that academic standards are too high but too low, resulting in boring, unfulfilling courses that students conclude they can do without.

And it is in this last area that Murray’s essay—along with Real Education, the book on which it is based—touches on some very legitimate areas of concern. It’s true that our higher education system is not serving the interests of many students. Not because it encourages them to earn a bachelors degree, but because it does a poor job of helping them succeed. Colleges are not judged by how well they teach students, and this includes the most elite institutions. Charles Eliot, the great 19^th and early-20^th century Harvard president, was supposedly once asked how his university was able to amass its store of knowledge. “Because our students arrive with so much,” he is said to have replied, “and leave with so little.” This remains more or less true today.

Academic quality should be a higher priority for college presidents, and far more attention should be given to student success. Murray is correct that all programs don’t have to take four years. (European universities are rapidly coalescing around a three-year standard.) Degree programs would certainly benefit from more empiricism and connection to the real-world concerns of the workplace. There are many students out there majoring in business, education, social work, etc. who aren’t learning very much about those things, and the same is true for the classic liberal arts.

But the solution isn’t to divert those students into a huge testing and certification apparatus that would cripple a higher education system that remains, for all its flaws, a bulwark of the economy and the envy of the world. Instead, we should ensure that students learn more in college by keeping higher education affordable and holding colleges and universities accountable for how much students learn and whether they eventually succeed in the workforce and life. The bachelor’s degree represents the best of American opportunity, a vehicle for social and economic advancement that has produced fantastic dividends for our economy, citizenry, and society. We need to make it better, not tear it down.

—

Kevin Carey is the research and policy manager for Education Sector, an independent education policy think tank.

Am I the only man of the people in this gaggle? The three commentaries are all written from the perspective of people for whom the current system works just fine. A central tenet of my argument that we really ought to engage is this:  The current system punishes the 70 percent of kids who don’t get BAs, and punishes them viciously. Surely none of the commentators will argue with that when it comes to the social punishments. (I’ll reserve the economic punishments for another time.) The class stigma that goes with being “just a high school graduate” is too obvious for anyone to deny it.

So if you have a system that punishes 70 percent of young people setting out in life, the first question to ask is, to what end? What are the compensating good things that the piece of paper called a BA provides that justify the punishment? It’s not enough to say that it provides information that, faute de mieux, employers find useful. The question to ask is: Can we provide the same information in any other way—and the answer is  yes, easily.

Or consider the four years of time that a BA ordinarily requires. If you have the time and the money, no problem—and that seems to have been the case for the three commentators (as it was for me). Hey, I learned stuff, had a good time, and I was sorry to see the four years end. But what about all the young people who don’t have the time or the money for four years? There are a whole lot of them. Right now, we are saying to them that they have to go deep into debt and spend a couple of years that they don’t want to spend, because the BA takes four years, and that’s all there is to it. Why?

I guess I’m asking my colleagues to step back from a system that worked for them and consider the large majority of young people who are not in their position. The current system imposes severe punishments and burdens on them. We shouldn’t be doing it if we don’t have damned good reasons for it. What is it about the BA that necessitates those costs?

To say that the entire population of non–BA holders is being “viciously” punished is a gross exaggeration, is it not? According to the latest Census educational attainment numbers, 12 percent of adults aged 25–64 don’t have a high school degree or its equivalent. Thirty percent graduated from high school but never attempted college; 9 percent earned an associate degree; and 17 percent attended college but never earned a credential.

Surely there are real differences in the knowledge, skills, abilities, and attitudes of those populations. I’m an employer, and I wouldn’t consider hiring someone without a high school diploma to work as a policy analyst under any circumstances. Perhaps I’m denying my organization the potential services of a brilliant, motivated autodidact. But I think the odds of that are quite small. I agree that not all degrees need to take four years and said so. But there’s a big difference between saying we should create more variance in the length of college degree programs and saying that the vast majority of students shouldn’t be in college degree programs at all, but rather vocational programs leading to a narrowly defined (and thus, less flexible and valuable) workplace certificate.

Murray misunderstands me.  Yes, I freely admit that the current system works great for me, but I nevertheless see it as a massive waste of time and resources.  I am delighted to hear Murray’s charge that the BA is the work of the devil.  If I were on the jury, I would vote to convict.

My key problems with Murray’s essay are his arguments, not his conclusion.  I don’t see that Murray has a coherent story about how the BA persists despite its inefficiency.  The signaling model does tell such a story, so Murray ought to at least take it seriously, and tell us how it relates to his thesis.

If he does embrace the signaling model, though, Murray’s distributional analysis will probably turn out to be wrong.  The main losers are taxpayers who subsidize the wasteful signaling competition, and consumers who pay more for the labor that colleges divert away from the productive part of the economy.  Murray is right, of course, that talented workers without BAs suffer, too; but we should not forget that below-average people without BAs actually benefit from employers’ imperfect information about their productivity.

If this isn’t clear, think about auto insurance premia.  Teenage boys pay more than teenage girls.  But in a world of perfect information, the average teenage boy would still pay a higher premium, because boys really are, on average, riskier drivers.  So who suffers as a result of imperfect information?  Above-average members of observable groups.  And who benefits?  Below-average members of observable groups.  The same goes for education.  Above-average high school graduates suffer a social punishment for their lack of a degree.  But below-average high school graduates actually enjoy a social benefit relative to a perfect information meritocracy.

The punch line: Murray is selling his own argument short.  The problem with the BA isn’t that it helps some people and hurts others.  The problem is that it burns up valuable resources, and (at least at the margin) gives society next to nothing in return.

One point I’d like Murray to expand upon is that a lot of people who start the BA don’t finish.  He tells us that college…

…is still too intellectually demanding for a large majority of students, in an age when about 50 percent of all high school graduates are heading to four-year colleges the next fall. The result is lots of failure. Of those who entered a four-year college in 1995, only 58 percent had gotten their BA five academic years later. Another 14 percent were still enrolled. If we assume that half of that 14 percent eventually get their BAs, about a third of all those who entered college hoping for a BA leave without one, often after accumulating a large student-loan debt.

This is probably Murray’s strongest response to labor economists’ conventional wisdom that more people should be getting BAs because the rate of return is so high. [1]  The problem: labor economists normally estimate the return to completed education.  It only takes a small drop-out rate to drastically reduce the expected return of trying to complete a year of school.  If the rate of return for a completed year of education is 10%, but 6% of students who start a year don’t finish (and waste a year of their lives plus tuition), the expected rate of return is only 3.4%! [2]  If the marginal student is less likely to finish than the average student, the effect is even more drastic.

The upshot: Murray’s critics can’t dismiss him merely by waving around standard estimates of the return to education.  One of Murray’s main points is that for many students, the “standard” return is just a honey trap.

Notes

[1]  In fact, labor economists often add that instrumental variables methods show that the marginal return to education is, if anything, higher than the average return.

[2] If the student has a 94% chance of a 10% return, and a 6% chance of wasting a year’s worth of time and tuition, the expected return is .94*1.1+.06*0=1.034.

I think I understand social stigma, but what is Murray saying about it? That young people are going to college because they cannot bear the thought of being labeled “second class citizens” for being mere high school graduates? They are just searching for some sort of social status? And if they don’t get it, society “punishes them viciously”? How? Or is it the case that the quality of their social and professional networks is much worse, or that their marriage market prospects are less attractive?

I grant that I am not an American and I did not live in the U.S. for long. Perhaps that is why I need this better explained to me. I am happy to change my mind, and I can see that this could be important.

I understood Murray’s economic argument a bit better, although, as I said before, I think college does pay off for most people currently at the margin of going (although there are some unlucky ones). Furthermore, we can all sympathize with the argument that perhaps four years is too long. In the United Kingdom, the undergraduates I teach get out in three years, and they go on to do the same jobs as U.S. undergraduates, be it in the financial sector, in business consulting, marketing, or government. In fact, all of Europe has gone to a three-year degree. But I don’t see Murray’s argument as being about three vs. four, or two vs. three; it is about something more fundamental and extreme.

It has been hard for researchers to pin down what types of rewards really motivate people to enroll in college.  Financial rewards such as a higher salary? Promise of a pleasant four years? Access to a higher social class? People engage in all kinds of wasteful activities to get status. In fact, that’s the whole point of doing them — to distinguish yourself from those who don’t do them. Murray is saying that for many people, the BA is like that. It basically gives them little or no knowledge, especially if they major in a subject such as Russian Literature. But what is obvious to Murray is not obvious to me, and it doesn’t seem obvious to Carey either. I am happy to change my mind if I get more evidence.

Bryan is correct that the job market doesn’t provide a lot of partial credit for higher education. But in saying so, he seems to accept Murray’s blanket contention that people don’t graduate from college because they’re not smart enough to handle college-level work. This just isn’t true. Researchers have been studying the dropout problem for decades. (I would point to Vince Tinto’s work at Syracuse, among others.) Of course some students aren’t college material. But most drop out because they can’t afford to pay tuition, or they received a terrible high school education, or work and family demands intrude, or the college itself does a poor job of providing an engaging, high-quality education. To say that all students who didn’t finish college couldn’t have finished college, and thus shouldn’t have gone in the first place, is simply wrong.

In an earlier post, Bryan asserted that the present system of large public subsidies for higher education is a “massive waste of time and resources.” By this I assume he means that society would, on the whole, be better off without such subsidies. The United States has historically been a leader among most nations in adopting policies designed to induce large numbers of people to pursue college degrees and to reduce the price of doing so. And the United States has the most productive, well-educated workforce in the world. In recent decades, many of our biggest economic competitors have adopted policies designed to cut into our lead in college education and produce more graduates and degree holders. As near as I can tell, none of our competitors are adopting the opposite strategy. Are all of these nations, including ours, just massively wrong about all of this? Why hasn’t anyone adopted the cut-public-subsidies-for-higher-ed strategy and reaped (what I assume you believe would be) the huge benefits in return?

Quick identity switch from man of the people to arrogant elitest snob. Let me go back to the statistic I introduced in my original article. The College Board defined “college readiness” as a 65 percent probability of getting a 2.7 freshman grade-point average or better, and then used freshman records from 41 major universities to determine the SAT score that predicted “college readiness” by that definition. The result was a score that only 10 percent of all 18-year-olds could get if all 18-year-olds took the SAT. Furthermore, these results are obtained in an era when a C effectively represents what used to be a failing grade.

Roughly 40 percent of all 18-year-olds enroll in a four-year college, and about two-thirds of those eventually get a BA, so obviously something interesting is going on, but let me focus on the question: Do these results really mean that 90 percent of kids can’t handle genuine college-level material?

Yes. More than that can get through, of course, but that doesn’t mean they’re absorbing much of the material in real college courses. To make that point for majors in the sciences and engineering is easy, because it’s easy to prove that no more than 10 percent of the population can handle the math that those majors require. To make the same point about the social sciences and humanities, Real Education presents a set of passages from page 400 (chosen arbitrarily) from college texts. The vocabulary, syntax, and reasoning ability required to understand those passages is at a level that roughly corresponds to the “advanced” level of reading on the National Assessment of Educational Progress–and only 5 percent of twelfth-graders reach the “advanced” benchmark.

Kevin, let’s go pick a set of 18-year-olds with measured IQs of 110 (25th percentile), give them the opening few chapters of the textbooks that I drew the passages from, and then engage them in conversation about what they understood from those chapters. And then try to tell me that they belong in any of the traditional college majors. It doesn’t mean they’re dumb. It doesn’t mean they can’t be successes in life. It just means that they don’t belong in the traditional college majors, which is a good reason to start thinking about better ways for them to get the post-high-school education they want, rather than sending them to institutions that were designed to provide the traditional college majors.

Charles, in your book you identify 1180 as the combined SAT score cutoff for college readiness, based on the study you cite. U.S. News & World Report reports the 25th and 75th percentile combined SAT scores for colleges and universities in its annual rankings. Here’s a list of colleges and universities ranked as “Tier One” institutions by U.S. News that reported a 25th percentile SAT score equal to or lower than 1180:

University of California-Los Angeles

University of California-San Diego

University of Washington

University of California-Davis

University of California-Irvine

University of California-Santa Barbara

Penn State University

University of Texas-Austin

University of Florida

Yeshiva University

Smith College

United States Naval Academy

United States Military Academy

Lafayette College

Furman University

University of the South

Union College

Skidmore College

DePauw University

Pitzer College

Rhodes College

And of course there are a number of other top-ranked colleges with 25th percentile scores fairly close to 1180, which means that some significant percentage of students, perhaps as many as one in five, are enrolling despite scores that you think disqualify them from pursuing a legitimate college degree. And yet, they’re getting degrees. We know this because the graduation rate at nearly every one of the institutions listed above is greater than 75%, and the population of non-graduates surely includes both students who transferred elsewhere to graduate and students with SATs above 1180.

The point being, every year many students enroll in highly regarded colleges and succeed there despite not meeting your alleged minimum cognitive cutoff. And this doesn’t even take into account all of the very solid institutions in the lower tiers and the sub-1180 students who succeed there as well. Unless I’m misreading your proposal, you essentially want to radically shrink the population of traditional college-goers as a means of saving people who aren’t college material the trouble of attending. I submit that there is no sorting process even close to accurate enough to pull that off without denying college to large numbers of students who are perfectly capable of earning a bachelor’s degree. I’ll repeat my example of Eureka College (where only one-fourth of students enroll with the ACT equivalent of an 1180) and the 40th President of the United States. Often, people don’t find out if college is for them until they get there.

I did not invent the definition of college readiness that the College Board used. I am not “alleging” that only 10 percent of youths have an SAT score that meets that definition, based on the students at 41 major state and private universities. That’s an empirical finding. I am not saying that an SAT score lower than 1180 is a cognitive cutoff that prevents people from “succeeding” in college, if success is defined as getting a BA. I do not want to “radically shrink” the population of young people taking courses on college campuses—I think they are fine facilities for providing post-secondary education, and, in my ideal world, almost all high school graduates would get post-secondary education. I think italics are called for: I want students to have better alternatives than spending four years on those college campuses so that they can get a piece of paper called a BA.

Kevin Carey raises an interesting point:

Bryan is correct that the job market doesn’t provide a lot of partial credit for higher education. But in saying so, he seems to accept Murray’s blanket contention that people don’t graduate from college because they’re not smart enough to handle college-level work. This just isn’t true.

If this really is “Murray’s blanket contention,” then I don’t accept it.  There are lots of factors that influence the probability of graduation: IQ, personality, distaste for school, all the facts that Carey mentions—“can’t afford to pay tuition, or they received a terrible high school education, or work and family demands intrude, or the college itself does a poor job of providing an engaging, high-quality education”—and more.

Nevertheless, if all we want to do is calculate the marginal student’s expected return to education, though, it doesn’t really matter why students don’t finish.  If a completed year of education pays a 10% return, but the marginal student has a 6% chance of not completing a year of school for any reason, that student’s expected return to education will only be 3.4%.  If we’re offering prudential advice to potential students about whether they should pursue a BA, we need to take all these factors into account, not dismiss them.

Think about it this way: If someone is  thinking about opening a small business,  wouldn’t a good friend warn them about the possibility of failure?  Would it matter if the reason for failure was low IQ or “family demands”?

Admittedly, you could say, “We’re talking about social policy, not individual career guidance.”  Maybe you think better policies would reduce the dropout rate.  Even if that’s correct, though, when you do cost-benefit analysis of your favorite policies, you’ve got to take any remaining dropout rate into account.

Another intriguing Kevin Carey question:

The United States has historically been a leader among most nations in adopting policies designed to induce large numbers of people to pursue college degrees and to reduce the price of doing so. And the United States has the most productive, well-educated workforce in the world. In recent decades, many of our biggest economic competitors have adopted policies designed to cut into our lead in college education and produce more graduates and degree holders. As near as I can tell, none of our competitors are adopting the opposite strategy. Are all of these nations, including ours, just massively wrong about all of this?

 This exchange is supposed to be about Murray, not me, but I can’t resist.  As I argued in an earlier Cato Unbound, as well as in my book, The Myth of the Rational Voter: Why Democracies Choose Bad Policies, inefficient policies are often popular because systematically biased beliefs about economics are widespread.  In the book, admittedly, I picked the “low-hanging fruit”—popular policies like protectionism and price controls that almost all economically literate people think are a bad idea.  In this forum, I’m making the stronger argument that even economists overestimate the social return to education.  Why?  Because education is more about showing off than building human capital.  I may be wrong, but the fact that “all the other countries are copying us” hardly shows that we’ve got it right.

Regarding Bryan’s point that there are many reasons people don’t complete college, it remains true that IQ plays a fundamental role. It was expressed perfectly by NYU sociologist Steve Goldberg: IQ is to success in life (or in college) as weight is to offensive tackles in the NFL. The correlation between weight and performance among starting NFL offensive tackles is probably close to zero. Lots of other qualities are more important. But you have to weigh 300 pounds before you have a shot. Same with IQ and college.

It should go without saying that the IQ equivalent of 300 pounds for theoretical physicists is different than for, say, public policy analysts. But there is an equivalent for success in every job—and for success in every college major. And, yes, it does of course have fuzzy borders. There are still a few 288-pound offensive tackles out there.

I’m slightly puzzled by Murray’s analogy that “IQ is to success in life (or in college) as weight is to an offensive tackle in the NFL.”  If Murray’s only point is that there is some IQ threshold below which it is nearly impossible to complete college, I agree.  But the college threshold is vastly below the NFL threshold.  Indeed, on p.152 of The Bell Curve, Murray himself estimates that a student of average IQ has about a 10% chance of getting a college degree.[1]

In any case, if Murray wants to discourage marginal students from getting a BA, he doesn’t need to show that it is impossible for them to succeed.  Threshold claims are a red herring.  Even if the probability of completing college were linear in IQ, college could still have a negative expected return for many students.  Why would Murray need to show anything more?

Note

[1] For white students with average age and socio-economic status.

Let me suggest something that perhaps we can all agree on, convictions about IQ aside. We need a higher education system that produces much more accurate information about the students it enrolls and educates.

The standard degree consists of only two useful pieces of information printed on a single sheet of paper: the type of degree and the institution attended. Given the vast differences between degrees of similar types and between the qualities of students who graduate from similar institutions, this isn’t a lot for employers or anyone else to go on. So they fall back on what they can infer. For the small minority of students who attend selective institutions, it’s the up-front sorting process. For everyone else, it’s the generalized diligence and intelligence required to amass 60 or 120 credits. The vagueness of these signals makes it hard to pin down the nuances of the interaction between people, colleges, and life outcomes, and thus contributes to the lack of hard data that confuses discussions like the one we’re having here. College transcripts have limited value, because the evaluation process that determines grades is completely non-standardized and unreliable, as is the process for defining and naming courses themselves.

What if, by contrast, college students were able to produce detailed, reliable information about (a) the content of their courses and (b) what they had actually learned? That would pave the way for more sensible variance in degree length. Right now, with degrees based not on learning but on the spent time having been taught, a four-year degree is presumed to be twice as good as a two-year degree—regardless of what it is in or where it is from. If students could prove what they had learned over three years, for example, they’d be able to take that information into the job market with much more confidence. Indeed, attaching real information to course credits might even obviate the need for “degrees” in the traditional sense of the word. Courses, probably earned from a variety of providers, would become the new coin of the realm.

This would also create a market for the kind of third-party certifiers that I think Charles is envisioning, which might be based on vocational tests, but must also be based on many other criteria. This kind of system would likely lead to more specialization among institutions in those academic areas where they have a competitive advantage—something I assume the economists here would support. And this isn’t a fantasy; countries in Europe and elsewhere have been engaged in efforts over the last decade featuring many of these aims via the Bologna process and its “degree framework,” “diploma supplement” and “tuning” processes. (They’re keeping a standard degree framework: 3 years for a bachelor’s, 5 for a master’s.) 

As long as we maintain public policies focused on maintaining access and quality—as long as all students have a fair chance to access high-quality college teaching at a reasonably low price, regardless of their socioeconomic background—I’d certainly be willing to open up the higher education system to experimentation and innovation on the degree and credit information side of things and see what happens.

Perhaps many students would opt out of the traditional four-year track, perhaps not. The important thing is that we wouldn’t decide for them ahead of time by narrowing their educational options prematurely.

I agree that IQ, or at least some good measure of cognitive achievement, largely determines whether you succeed or not in college, although other factors can also play a role. And some people have more of it than others, so college is not for everyone. But for a large set of individuals, getting a BA does have good financial payoffs, let alone all kinds of other non-monetary payoffs that also come with education. I am not talking about the signaling story, which, according to Fabian Lange at Yale, is not a big deal. (The published version of this paper won the Journal of Labor Economics prize for best paper in 2006-2007.) For the most part, students are being rewarded for getting a BA, and the reward is not small, so they are probably learning something useful.

I also agree that individuals go to college for all kinds of reasons, and they are not necessarily trying to maximize their financial payoffs. In fact, research shows that education decisions do not seem to respond much to changes in the financial incentives to enroll in college. For a good recent example, see this essay by Joseph Altonji, Prashant Bharadwaj, and Fabian Lange, but there are many more. For the most part, students just seem to go if they are smart and they are relatively well prepared, probably because they grew up in favorable home environments and went to decent primary and secondary schools. Maybe they go in search of social status, but if they do, they learn something in the process.

One question is whether the process could be more efficient. Like most things in society, I am sure it could. But across-the-board testing looks really cumbersome, and the temptation to decide centrally what to test is always there (otherwise it is probably not a feasible system), and does not sound like a good idea. Human resources departments of firms are doing a lot of screening already, and they know what they are looking for. Furthermore, you can try people out and get rid of them if you don’t like them.

Instead of scrapping the BA, perhaps we could make it shorter, or we could make it more specialized, and let its duration vary a bit more by choice of major. Suppose we decided three years was enough. Students would start working one year earlier and they would pay one year less of tuition, which no doubt would translate into a large increase in the present value of lifetime wealth, but that’s a calculation that is not difficult to do. Of course, they would have one year less of learning, and although its value would be disputable to some, we could also try to calculate it. And many of them would have one less year of leisure, which has its value as well. But remember, there is a lot of choice out there already. There are different programs in different schools, and you can be a full-time or a part-time student. It’s not that the system is completely inflexible.

I am sure there are programs where you do not learn much, either because students are not good, the program is not good, or, most likely, a combination of both. A question is whether those are marginal programs serving the marginal student, or whether they are more prevalent. There is probably real waste out there, and credentials that are not worth much. It would be good to get rid of them, and maybe students don’t always have adequate information about the quality of the program they are choosing. So we could mandate schools to reveal more information to students, say on the average SAT of the incoming class, or the average salary of the outgoing class. Some schools reveal this, but probably they are the best ones. At lower levels of education, there is a movement towards this, in the hope that it will help parents make more informed choices.

Before this conversation ends, I’d like to press Charles Murray and Pedro Carneiro on signaling:

For Charles: In your view, why precisely does the market financially reward students for taking lots of classes that at best seem distantly related to job performance?  You don’t seem ready to sign on to my signaling story.  Do you have an alternative?  As I’ve said before, I agree with most of your conclusions.  It’s your model that leaves me wanting more.

For Pedro: Yes, I am familiar with Fabian Lange’s work on signaling.  But to deny the importance of signaling in education goes against decades of my first-hand experience.  When I mentally review my 21 years as a student, I just don’t see that many of my classes caused my marginal productivity to go up.  Foreign languages, history, physics, physical education… in my job, they rarely come up.

You could say that I have an unusual job.  I do — I’m an economics professor.  But that just reinforces my point.  Since a major part of my job is teaching the material I learned as a student, there is an unusually strong connection between what I learned in school and what I do in my job.  If I hadn’t become an academic, I probably wouldn’t be writing about the return to education and calling it “work.”

The other response I’ve heard to my skepticism about the practicality of education is that so-called “useless” subjects improve job performance by “teaching us how to think.”  But educational psychologists have been testing this hypothesis for over a century, under the heading of “transfer of learning.”  (See Haskell 2000 for a survey).  The punchline of this massive literature is that learning is highly specific; if there is such a thing as “learning how to think,” it occurs too rarely to see it in the most of the data. [1]

So my questions for Pedro are: If you mentally review your years as a student, can you honestly say that your typical class raised your marginal productivity?  If you adjust for the fact that you’re an academic, doesn’t the weakness of the connection between what you learned and what you do trouble you?

Note

[1]  There is another major debate in this literature about whether we can improve education so that transfer of learning does occur.  But virtually no one in educational psychology claims that significant transfer of learning is occuring now.