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The benefits of a college degree in one graph

unemployedandrecessionandeducation.jpg

That's from Matthew Yglesias, who comments:

Virtually every single member of congress, every senator, every Capitol Hill staffer, every White House advisor, every Fed governor, and every major political reporter is a college graduate. What’s more, we have a large amount of social segregation in the United States—college graduates tend to socialize with each other. And among college graduates, there simply isn’t an economic crisis in the United States.

By Ezra Klein  |  August 11, 2010; 9:39 AM ET
Categories:  Charts and Graphs , Economy  
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Comments

It would be interesting to know how much this has to do with the manufacturing sector, as opposed to other dynamics.

Posted by: jduptonma | August 11, 2010 9:57 AM | Report abuse

a tangential question here but why isn't the ever increasing cost of higher education demonized and politicized like healthcare costs are? I know many on the left would prefer free college education for all paid for by soaking the rich with taxes (I get it) but why hasn't the educational sector in the post high school market taken a hit for their ever increasing costs like healthcare has?

Posted by: visionbrkr | August 11, 2010 10:22 AM | Report abuse

When are Dems going to pass a law that makes you go to college? Like forceing people to have health insurance, shouldn't you force people to go to college too? You know whats best for everyone right?

Posted by: obrier2 | August 11, 2010 10:34 AM | Report abuse

How can anyone be sure that you don't have a problem of sample bias? Maybe the people who are more likely to be senators, representatives, White House aides, and generally high-earners are those that choose to go to college?

Posted by: FroggyJ4 | August 11, 2010 10:35 AM | Report abuse

"And among college graduates, there simply isn’t an economic crisis in the United States."

Um, except for recent college graduates. If you looked at college graduates who finished within the last three years, you'd see a very different unemployment rate.

Posted by: gbrunet | August 11, 2010 10:51 AM | Report abuse

Well, 'employment' can mean a lot of things. I'm not quite sure how much of a consolation your PHD will be while you're working as a part-time dishwasher -- other than you took the job of some guy who didn't even have a high school diploma.

Posted by: leoklein | August 11, 2010 10:53 AM | Report abuse

visionbrkr, I agree. I think healthcare has taken up the spotlight because of its federal budgetary implications and because everyone uses the healthcare system at some point, but college tuition is going to need to be addressed at some point. Forget my lifetime, the eight years since I was in college has seen an insane explosion in tuition rates.

obrier2...because those two things are different? You might as well be asking when the Dems are going to force everyone to have Taco Tuesdays.

Posted by: MosBen | August 11, 2010 10:56 AM | Report abuse

To follow up a bit, I must say that I'm pretty ignorant of why tuition is so out of control. Every year I say something like, "They're raising tuition again? That can't possibly be sustainable. It's got to level off soon." And then I say the same thing the next year. That really is an area I'd like to see Ezra cover a bit. Though I'm not married, I would like to have kids some day. Forget the American Dream of home ownership, I'd just like to be sure that I will eventually be able to afford to send my kids to college without endangering my ability to retire.

Posted by: MosBen | August 11, 2010 11:03 AM | Report abuse

I agree with gbrunet and add: I've seen quite a few college graduates from over the last 3-4 years employed, but severely underemployed for their credentials. Employment figures alone don't tell the story. When you have a degree in biology and are working full time at Payless Shoe Store, you are employed, but not in the way you thought.

Posted by: JJenkins2 | August 11, 2010 11:05 AM | Report abuse

MosBen,

agreed. The school I went to 20+ years ago (God I'm old!) was $20k a year. Now its $35-$40k). People talk all the time of doctors having to pay off medical school (and they're right) but no one talks about engineers, art students etc when they talk of graduation debt and they don't have the future earning income that doctors have.

Posted by: visionbrkr | August 11, 2010 11:05 AM | Report abuse

@visionbrkr:

I think part of the answer to that is that tuition cost bloat isn't killing the federal budget, where healthcare cost bloat is front and center in any federal budget discussion.

And, more broadly speaking, healthcare now accounts for 20% of our GDP and is rising fast. College education accounts for what, 2%? Certainly on a ROM basis, and from that perspective greater focus on healthcare demonization makes sense.

To your complementary point I agree; the US spends a great deal of money subsidizing healthcare, mortgage debt, and college tuition costs, and we shouldn't be surprised when each of those gets out of control as a result.

Posted by: eggnogfool | August 11, 2010 11:06 AM | Report abuse

Asking "when the Dems are going to force everyone to have Taco Tuesdays" is indeed silly: an anti-unpasteurized-cheese law has already been passed by this Congress [no kidding]. In fact, if you have both a cow and a child crying for milk, you are now forbidden by law to milk the cow and give the milk to your own child, 'cuz that would be interstate commerce.

Posted by: rmgregory | August 11, 2010 11:09 AM | Report abuse

The worst part is that college is often just a hyper-expensive form of signaling.
Clearly some types of careers require a ton of education and there is no way around it, but I wonder how much value is added by getting an undergrad degree in, say, business.

We've already established that college students don't need to do much studying while there. It's also implausible to think college students gain more work skills in four years of classes while paying an arm and leg in tuition than working for four years as an low paid/unpaid intern (or even one or two years) at a business prior to becoming a full-time employee.

Not that nothing is learned in college, but from an employment standpoint most firms require basic math, computing and communications skills, and aside from that much of what you need to know is firm/industry specific. Necessary general business information can be learned from a couple of days worth of reading.

College is a fun but expensive way to show employers you're probably the type of person they'd like to hire.

Posted by: justin84 | August 11, 2010 11:12 AM | Report abuse

eggnofool,

good points. I guess if some liberals got their way and required higher education to be fully state subsidized for all then we would be having that discussion. For now my household discussions are based upon one word, SCHOLARSHIP!

Posted by: visionbrkr | August 11, 2010 11:13 AM | Report abuse

"To follow up a bit, I must say that I'm pretty ignorant of why tuition is so out of control. Every year I say something like, "They're raising tuition again? That can't possibly be sustainable. It's got to level off soon." And then I say the same thing the next year. That really is an area I'd like to see Ezra cover a bit. Though I'm not married, I would like to have kids some day. Forget the American Dream of home ownership, I'd just like to be sure that I will eventually be able to afford to send my kids to college without endangering my ability to retire."

MosBen,

I think education subsidies is at least part of the problem. As stated on page 24 of the pdf, the original thought behind spending on higher education was that costs were fixed and so increasing public spending meant greater access (and that second part may be true to some degree although recent studies have questioned that). However, funneling more money into the system lead schools into an academic arms race in order to attract more/better students and the best professors, raising costs. See page 32 for some crazy examples of where money goes.

http://www.centerforcollegeaffordability.org/uploads/Financial_Aid_in_Theory_and_Practice.pdf

Posted by: justin84 | August 11, 2010 11:36 AM | Report abuse

Maybe we can bail out the universities with strings attached to tuition increases...

Posted by: MosBen | August 11, 2010 12:06 PM | Report abuse

Maybe we can bail out the universities with strings attached to tuition increases...

Posted by: MosBen | August 11, 2010 12:07 PM | Report abuse

I would not agree that there is not an "economic crisis" for us college grads, it's just not as severe a one. Yes, I have a college degree, I almost have my Masters too, but for several years now I've been stuck at the same 15% below the national average salary job and still have seen no sign of moving up. In fact, I work with almost a half dozen other degreed individuals who have yet to go on anywhere. Yes, we have stable jobs, but that's now just why we all put ourselves in debt and four more years of education for.

And now, I'm married with a wife who has only been able to find part time work and I'm hemorrhaging cash trying to be breadwinner and I haven't even started paying on my Masters yet. And then there's no guarantee if someone ever does bother to recognize my ability and promote me that it will pay more than I already earn. And yet I'd be better paid installing fiber optic cable than I am with almost six years of schooling, and unionized too. Fun times ahead.

Posted by: johnconstantine | August 11, 2010 12:16 PM | Report abuse

@visionbrkr: The school I went to 20 years ago started out at $6k a year and end up at $14k, by the time I left. And it stayed $14k for the next 10 years. Of course, I went to art school, not something practical like engineering, which was probably not the best decision I ever made.

My oldest child will be going to college in 6 years (or 7, depending on how you do the math--she just started 7th grade). There is some debate in the household, as I'd prefer to sent her to the local community college and have her load up on practical work-related skills, while my wife--despite agreeing that going to art school makes no sense in a rational world where you eventually need to be employed--still wants to send her to a fancy, expensive school where they mostly teach you how to elect Democrats and that the American dream is a tissue of lies. I don't want to blow $35k a year (which I'm not likely to have, even then) for my daughter to be indoctrinated with mostly politically correct nonsense. I like courses with names like "Microsoft Exchange Certification" and "Cisco Certification" and "Coldfusion 1,2,3", not "The Patriarchal American Lie". Of course, that may just be me.

Posted by: Kevin_Willis | August 11, 2010 12:22 PM | Report abuse

@ob2: When are Dems going to pass a law that makes you go to college?

Unlike health care, while going to college is a good way to up your earning potential, there are other routes to getting employed. Without insurance, 95% of people can barely afford even regular checkups. An injury or illness will bankrupt them.

Posted by: srw3 | August 11, 2010 12:24 PM | Report abuse

Health care (transformation) is one of the best issues this current administration has done thus far. With this change individuals will have the opportunity to seek professional and quality health care services. Who would want to return to the days of the horse and buggy, b/w tv sets, manual typewriters, pac man, you get the point? That's about how old the health care system was in the USA. Each day the news is filled with social tragedies in which lives are taken at the hands of known acquaintences and/or family members. Our society is stricken with the institutions of white collar crime permeating throughout this great nation and greed which tends to strike at the very fabric of our country. If you are looking for affordable health insurance check out http://bit.ly/chE6zp . I hope everyone will soon recognize and use the resources made by this transformation to seek professional medical attention as the need arises rather than turning to illegal and criminal activities to resolve their issues.

Posted by: caryblair | August 11, 2010 12:29 PM | Report abuse

Health care (transformation) is one of the best issues this current administration has done thus far. With this change individuals will have the opportunity to seek professional and quality health care services. Who would want to return to the days of the horse and buggy, b/w tv sets, manual typewriters, pac man, you get the point? That's about how old the health care system was in the USA. Each day the news is filled with social tragedies in which lives are taken at the hands of known acquaintences and/or family members. Our society is stricken with the institutions of white collar crime permeating throughout this great nation and greed which tends to strike at the very fabric of our country. If you are looking for affordable health insurance check out http://bit.ly/chE6zp . I hope everyone will soon recognize and use the resources made by this transformation to seek professional medical attention as the need arises rather than turning to illegal and criminal activities to resolve their issues.

Posted by: caryblair | August 11, 2010 12:29 PM | Report abuse

@KevinWillis,

Actually I went to one of those "fancy expensive schools" and I do mostly vote for Republicans so the mind control doesn't always work but hey nothing's foolproof right?

My oldest is starting high school this fall. She thankfully plays a varsity sport and is an honors student so we are PRAYING for a scholarship of some sort. The schools she wants to I think require you to not only vote Democratic your entire life but also require you to join the ACLU, moveon.org and Greenpeace. All that for the low low price of 40k a year.


srw3,

have you priced preventative care lately? I doubt very much that 95% of people can't afford some sort of preventative care. I will agree that an injury or illness (depending on how severe) certainly can bankrupt them though.

Posted by: visionbrkr | August 11, 2010 12:34 PM | Report abuse

@vb: I doubt very much that 95% of people can't afford some sort of preventative care.

Some preventative care is not adequate preventative care. Have you priced out lab tests without the insurance discount? But I will revise my estimate and say that say 70% of people would be very hard pressed to come up with an extra $100-$200+ dollars for a comprehensive checkup for each member of the family, even if there is nothing wrong.

I would point out that medical bankruptcy is very rare in the rest of the developed world and quite common here.

Posted by: srw3 | August 11, 2010 1:09 PM | Report abuse

"To follow up a bit, I must say that I'm pretty ignorant of why tuition is so out of control."

High school students applying to college don't know much about what their loans will cost or how much it costs to live, so they're willing to pay a lot for college, as its what you're supposed to do. (I certainly didn't know this stuff at the time).

Banks would normally refuse to make extravagant unsecured loans, but there's a federal guarantee and the exemption from bankruptcy.

So colleges compete on what attracts students - a nice pool, new gyms, the prestige of high achieving colleagues, cool architecture, big name professors, etc. And all that costs money.

Posted by: jesmont | August 11, 2010 1:09 PM | Report abuse

srw3,

agreed it is rare elsewhere although I would blame that more on the medical/industrial complex than the actual payers of healthcare but I'm admittedly biased ;-)

Yes some lab tests are very expensive without the discount. But then again we also do many more tests than I expect the rest of the world would do. If we all were paying the actual cost of it directly (as opposed to indirectly through subsidized healthcare premiums) then maybe we'd be more cognizant of what we're buying. But then again we NEVER look at it that way in this country do we?

Posted by: visionbrkr | August 11, 2010 1:39 PM | Report abuse

I'd like to see a breakdown of college degree holders. Many of my recent graduate friends are unemployed/underemployed.

I suspect there are much higher unemployment rates among very young and very old degree holders and significantly lower amounts among the 30 - 50 group.

Lastly, many of my employed recent college grads are in jobs they are overqualified for but couldn't find anything else.

Posted by: will12 | August 11, 2010 2:03 PM | Report abuse

The DC area has a disproportionate share of college grads too, plus all that Federal money, so around here it looks like the economy is fine.

On education costs: there has been almost no automation, no efficiences introduced to education (except in the online colleges), so costs have not been contained. A new model for higher education will have to evolve before costs moderate.

Posted by: glenerian | August 11, 2010 3:14 PM | Report abuse

"We've already established that college students don't need to do much studying while there."

I was going to comment skeptically about Ezra's posting yesterday on this topic and I can no longer resist the temptation.

I don't believe for one minute that students today study any less for the same grade on a paper or an exam than they did fifty years ago. If there is any accuracy at all to the time comparison, I think there are some fairly obvious explanations.

I went to college in the 1970's. If I was working on a reasearch paper from, say, 7 to 11:30 pm, I spent a great deal of that time strolling to the library, looking through the library catalog to find books and journal articles that I hoped might contain relevant information, pulling all of those materials off of the shelf, and then combing through all of them in order to find the very few that would contain actually relevant information. Perhaps a fraction of the time I spent in these "studies" actually involved review of pertinent information, the restof the time was devoted to the logistics of finding it.

An undergraduate today might be able to access the same or better materials in a matter of moments using an Internet search engine, without the student even leaving his or her room. Even the process of writing the paper is much faster now, thanks to computerized word processing, compared to the manual typewriter (and bottles of "white-out") that I struggled with for four years.

I don't think it takes any less time to actually "study" to pass an undergraduate course today, whether it is in physics, biology, literature, or whatever. But it is possible that we have made progress with the amount of non-productive time that is required in order to begin actual study.

Posted by: Patrick_M | August 11, 2010 3:46 PM | Report abuse

"Clearly some types of careers require a ton of education and there is no way around it, but I wonder how much value is added by getting an undergrad degree in, say, business."

I have hired and supervised hundreds of persons over decades. A few were high school grads that turned out to be real gems, and a few were college grads that turned out to be poor employees, but *overall* my experience has been the college grads have been more useful and well-rounded employees.

You begin with knowing that they were able to maintain a complex effort over a period of years, despite attractive distractions. Along the way, most will have had to put together and support and defend logical arguments, and had practice at sharpening their written and verbal communication skills. As a result, they relate more effectively with co-workers and outside venddors and customers. And when a non-routine problem arises for which there has been no on-the-job training, they (overall) are better able to craft and implement a viable solution.

A worker trained at my business will function within the scope of that training, but a worker who also has a business degree will likely have a deeper understanding of the enterprise overall. He or she is apt to offer more constructive ideas and suggestions, and generally will have better aptitude for advancement.

There are valid reasons why a college education commands a premium in the work place, and why college grads are usually the least likely to be dropped when employers tighten their belts. As the world grows ever more complex and competitive, I expect that preference can only get stronger.

Posted by: Patrick_M | August 11, 2010 4:03 PM | Report abuse

""We've already established that college students don't need to do much studying while there."

I was going to comment skeptically about Ezra's posting yesterday on this topic and I can no longer resist the temptation.

I don't believe for one minute that students today study any less for the same grade on a paper or an exam than they did fifty years ago. If there is any accuracy at all to the time comparison, I think there are some fairly obvious explanations."

Patrick, your points make a lot of sense. I agree the gap between generations isn't actually as large as is shown at face value. At any rate, the average student studies 14 hours per week, a value which is surely inflated by science/engineering majors.

I just got out of school a few years ago and I can't think of very many people in my dorm with a studying to XBox ratio above 1. Those who did were in science or engineering - the rest probably on managed 14 hrs/wk of studying during finals.

"There are valid reasons why a college education commands a premium in the work place, and why college grads are usually the least likely to be dropped when employers tighten their belts. As the world grows ever more complex and competitive, I expect that preference can only get stronger."

I agree with your analysis in this post Patrick. I just wonder about cause and effect - does college take regular people and transform them into great employees, or do people who make great employees get into and do well at college?

It's not that college does nothing, but are the skills gained large relative to costs? Let's say you took individuals who were both 4.0 high school students, and both of whom were accepted to a good school (let's say Michigan or Chicago). Assume one student actually goes to college, earns a 3.5 and interns at your company for 10 weeks during the summer before senior year. The other one interns for four years, the last two years at your company. Which of the two would make the better employee?

There are other reasons to go to college other than workplace productivity, but from that perspective college might only be a good deal from a signaling standpoint, rather than a human capital one.

Posted by: justin84 | August 11, 2010 5:43 PM | Report abuse

"The other one interns for four years, the last two years at your company. Which of the two would make the better employee?"

*Overall* the college graduate is the surer bet for me. They will bring skills in communication, independent research, and anlysis that internships or training will not produce. And they are more of a "turn key" proposition, because I already know that they are a proven commodity with respect to discipline and reliability. More of the interns without a degree will fall away before ever reaching full productivity on the team.

"I just got out of school a few years ago and I can't think of very many people in my dorm with a studying to XBox ratio above 1. Those who did were in science or engineering - the rest probably on managed 14 hrs/wk of studying during finals."

Obviously, the amount of time required for study varies according to the school and the field of study, as well as what the student hopes to achieve in terms of GPA and/or potential post-graduate work. I was speaking with a couple of college students I met recently who were both political science majors, but attending different schools. The faculty at one school places an huge burden of reading (most of which would qualify as graduate level) on their students, and the other student's school demands much less (although I think that student still has a higher study-to-Xbox ratio than you did).

I think the 4.0 high school student would be well advised to go to a university, rather than accept an internship straight out of high school with me. And that student will be more valuable as "human capital" to me after he or she completes their degree, for reasons other than mere "signaling."

Going to college is not the best decision for every young person, and requiring a college degree does not make sense for every job in our economy. But as I said before, it is understandable to me that college grads are the least likely to be let go during an economic downturn, and I think that this will be even more true with the passage of time.

Posted by: Patrick_M | August 11, 2010 6:47 PM | Report abuse

There are a few things that those of you who have high school and junior high school age children should know.

First of all, don't get overly distressed over the sticker price of a college education. Particularly at private universities, the sticker price is reserved for DRKs. (dumb rich kids....no, I'm not kidding you)

I've got three kids, two of whom have completed post graduate degrees and are very gainfully employed, and the youngest will begin a graduate program in a few weeks after two years in industry.

The best wisdom that I have to impart is this. If your child is one of the unusual ones who is passionate, at the tender age of 18, to pursue a specific career or field, then send him or her to the best school you can possibly afford in that field. And don't let the sticker price deter you. It'll likely cost less than you think.

If, on the other hand, your child is a more typical 18 year old, don't waste money on an expensive private school. Most especially don't be the parent of that girl who accumulated a quarter of a million dollars in student loan debt on a degree in Women's Studies from Columbia. Send him/her to good old state U and community college and save your money for post graduate education once he/she discovers something to be passionate about.

Posted by: bgmma50 | August 11, 2010 8:30 PM | Report abuse

Here is a really good article about what's really going on behind university tuition, with a short reference to the role of the DRK.

Posted by: bgmma50 | August 11, 2010 8:42 PM | Report abuse

HERE

Posted by: bgmma50 | August 11, 2010 8:49 PM | Report abuse

http://www.washingtonmonthly.com/features/2008/0811.carey.html


Posted by: bgmma50 | August 11, 2010 8:50 PM | Report abuse

You're a truly magnificent idiot, Klein.

Benefits of a college degree in one graph? Why not also call it "benefits of being older than the next guy in on graph?"

Posted by: pcannady | August 12, 2010 7:12 AM | Report abuse

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