University of Chicago economics professor Gary Becker,  recipient of the 1992 Nobel Prize, maintains a consistently interesting blog with the prolific law professor Richard Posner. Recently, Becker responded to a Posner post (on reasons to change our system of legal education) with an argument that "higher education is still a very good investment."

I submit that he is mistaken.

Becker notes that "some reputable individuals" contend that the advantages of a college education "are greatly overblown" but replies that evidence shows--"conclusively"-- that college is an even better deal today than it was a few decades ago. He doesn't link to that evidence but goes on to say that earnings for the average person with at least four years of college has increased from 40 percent higher than high school grads 30 years ago to 80 percent higher today.

That claim is not new. I've been hearing it for the last twelve years at least. If it were true, it would raise a great paradox. By many accounts, the learning that students do while in college has been steadily declining for decades, so how could it simultaneously be true that they are worth so much more in the labor market than in the past, when fewer Americans went to college but academic standards were higher?

I believe that there are two parts to the explanation of that apparent paradox.

First, the evidence that the high and growing gap between average earnings for college graduates and for non-graduates is based on data that goes back several decades, with full-time workers up to 64 years of age. The high earnings of individuals who earned their degrees back in the early 1970s pull the average far up, but their experience has little relevance to the likely results for anyone who is about to enter college and who will find a labor market awash in people holding college credentials.

Second, the phenomenon of credential inflation - that is, employers setting the college degree as a minimum educational attribute for job applicants - has had a significant impact on the earnings of workers who don't have a college degree. Many good career paths that used to be open to high school graduates are now closed to them, in insurance for example. The spread of credential inflation has been confining those without college degrees to a shrinking segment of the labor force where opportunities for climbing very high on the income ladder are rare.

Thus, it is not the case that college is necessarily a good human capital investment, but only appears so due to a statistical mirage.

Of course, some college students do gain greatly in human capital and most of them will fare very well in the labor market. Many others, however, will just coast along in college and after graduating (or dropping out), discover that the best work they can find is as a barista or a bellhop. Let's stop telling those young people that going to college is a very good investment. For many, it's not an investment at all, but merely an expensive waste of time.