Higher Education: The Conventional Wisdom Is Wrong

Forbes

One of America’s most durable myths is that the more people who graduate from college, the more the economy will grow. For many years, politicians and leaders of the higher education establishment (HEE) have advanced that notion. In his first major speech as president, for example, Barack Obama said that if we want a strong economy, we need to lead the world in the percentage of the population that has earned a college degree.

And in a recent op-ed in The Wall Street Journal, “Public Colleges Boost Economic Growth,” two college presidents (Robert Gates of William and Mary and David Boren of the University of Oklahoma) argued that decreasing state spending on higher education means that we are “sacrificing our young people’s futures—and our future economic growth….”

Those ideas sound appealing, but they are thoroughly mistaken. We cannot pull the economy up by the bootstraps through increased spending on higher education, even if that led to larger numbers of people with college degrees, which it won’t.

We strongly associate college with success. Most successful Americans have been to college (although there are conspicuous cases of people who dropped out or never went at all) and on average, people who have college degrees earn substantially more than those who don’t. Based on those facts, many Americans leap to a pair of illogical conclusions: first, that college educationcaused the successful to be successful, and second that those who don’t now go to college would become successful if only we would spend the money needed to put them through.

Individuals with a lot of intelligence and drive are, overwhelmingly, drawn to college, but it is their intelligence and drive that brings about their later success, not the fact that they passed enough courses to get the credits necessary for a degree. John Mackey of Whole Foods, for example, took a number of college courses before dropping out to concentrate on his business. He would be no more successful if he had earned his degree, or less successful if he hadn’t ever taken a single course.

On the other hand, we lure great numbers of young Americans into college these days with the idea that by getting their degree, they’ll enjoy a large earnings boost. A figure that is often, carelessly thrown around is the million dollar earnings premium for college grads.

The problem is that, increasingly, high school graduates do not have even the most basic academic tools – they don’t read well, don’t write well, and can’t do basic math – and also expect that college will be like high school, only more fun. Any increase in college enrollment will overwhelmingly come from such academically marginal students. Going to college rarely transforms those disengaged kids into highly productive adults.

Although quite a few of those students manage to coast through to their degrees, thanks to grade inflation and an abundance of easy courses, they have frequently gotten an education in name only. That was the big point of the 2011 book Academically Adrift by Richard Arum and Josipa Roksa.

If they do graduate, an increasingly large percentage of those students wind up working in jobs that do not call for any advanced academic preparation, as a study done by the Center for College Affordability and Productivity shows. Nor is this just a temporary problem related to our lingering recession. Scholars started noticing the phenomenon of college graduates competing for “high school jobs” about twenty years ago. (See, e.g., Who’s Not Working and Whyby Frederic Pryor and David Schaffer.)

Most politicians and virtually everyone in the HEE would have us believe that higher education spending is “jet fuel for the economy” as former Michigan governor Jennifer Granholm put it.  The problem with that notion is that there is little connection between how much a state (or country) spends on higher education and how much additional human capital it gets.

In his 2004 book Going Broke by Degree, Professor Richard Vedder examined that connection at the state level and concluded that there was actually a slightly negative relationship between higher education spending and economic growth. How could that be? Vedder explained that much government spending on college does nothing to actually teach undergraduates useful knowledge and skills. Therefore, diverting scarce tax dollars away from higher ed and towards other uses makes perfectly good sense.

I know that some readers are thinking, “Isn’t it true that more and more jobs today require college?”

Yes, in the credentials sense—employers often insist that applicants have college credentials if they want to be considered, even for jobs that obviously don’t demand any education beyond basic skills. Employers started insisting on college degrees as a way of screening applicants back in the 1970s, a trend that was helped along greatly by the Supreme Court’s ruling in Griggs v. Duke Power, which made aptitude testing a legal minefield. (Professor Lowell Gallaway discusses the case and its impact here.)

But no, in the knowledge sense. There are relatively few entry-level jobs that demand such knowledge that bright high school graduates are incapable of learning to do them.  Because of the spread of credential inflation, however, young people are obliged to spend many years and huge amounts of money in obtaining college degrees. And even after doing so, many are deficient in fundamental skills that employers are desperately looking for, a point Exxon/Mobil CEO Rex Tillerson made in this piece.

America certainly does have an education problem, namely that for many students, their K-12 years leave them pitiably unprepared, both for post-secondary education and the world of work. Increasing government spending on higher education is a costly and ineffective way of dealing with it.