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January 11, 2012

Are Too Many People Going to College?

These are the opening statements of a luncheon debate co-sponsored by the Manhattan Institute's Center for the American University and the John William Pope Center for Higher Education Policy.  The debate, held January 11 in New York City, pitted George Leef, research director of the Pope Center, against Peter Sacks, economist and author of Tearing Down the Gates: Confronting the Class Divide in American Education.  The moderator was Howard Husock, Manhattan Institute's vice president for policy research.

George Leef.jpgYES--George Leef

In my time this afternoon, I hope to persuade you that the United States has greatly oversold higher education.

We have done that through heavy government subsidies and extravagant rhetoric from both politicians and higher education leaders that created the impression that high-paying jobs were waiting for anyone who completed a college degree.

Just as we caused a destructive, resource-wasting housing bubble by pushing the idea that home ownership was good for almost everyone, so have we caused a resource-wasting higher education bubble.  Large numbers of people have gone to college and obtained degrees costing a great deal of money and time, only to find that there aren't nearly enough of those good jobs to go around.

The analogy to the housing bubble isn't perfect, however.  At least the houses that were built were generally of good construction.

In our higher education bubble, many of the educations purchased by students are the equivalent of houses without roofs.  Many Americans today graduate with a college education in name only, having gained little or nothing in useful skills and knowledge.

It's common in public policy issues for the enthusiasts for some idea to exaggerate the benefits that will supposedly come from their favored policy while underestimating if not entirely overlooking the costs and new problems it will cause.  That was the case with the housing bubble and it's equally so with our great leap forward to get more and more people through college.

The first benefit of going to college is that it supposedly leads to higher lifetime earnings, since on average, those who have college degrees earn significantly more than do people who don't.

It is a mistake to assume that just because, on average, people who obtained college degrees in the past have enjoyed higher earnings, individuals who will get college degrees in the future will also enjoy the same "earnings premium."

We know that many college graduates have to accept jobs that don't call for any academic preparation whatsoever, and don't pay more just because the worker happens to have a degree.

Last year, the Center for College Affordability and Productivity released a paper documenting the large percentages of people who have bachelors degrees (or higher) working in jobs that most high schoolers could easily do: customer service reps, cashiers, taxi drivers, and so on.

Quoting from that report.  "More than one third of current working graduates are in jobs that do not require a degree and the proportion appears to be rising rapidly....60 percent of the increased college graduate population between 1992 and 2008 ended up in these lower skill jobs."

The labor market is glutted with people holding college credentials.  Just because a country "produces" a lot of college grads does not mean there will be commensurate jobs for them. 

A second common belief is that it's advantageous for a country to have a high rate of college completion because it improves economic competitiveness.  Conversely, a country that falls behind in this regard faces a dim economic future.

In an address to Congress in 2009, President Obama latched onto that idea, calling for a national goal of being first in the world in terms of college graduates by 2025.

The trouble with that notion is that there is no necessary connection between a nation's "educational attainment" level and the vitality of its economy.

In her book Does Education Matter?--Myths about education and economic growth, University of London professor Alison Wolf examined the supposed connection between education and economic growth.  She wrote, "Two naive beliefs have a distorting influence (on public policy) - the belief in a simple, direct relationship between the amount of education in a society and its future growth rate, and the belief that governments can fine-tune education expenditures to maximize that rate of growth. Neither is correct."

Wolf provided examples of nations that have "invested" heavily in higher education yet have listless economies (such as Egypt) and others that do little to promote higher education yet enjoy very productive and growing economies (such as Switzerland).

Conclusion: putting lots of people through college is neither a necessary nor a sufficient condition for rapid economic growth.

Now I'll mention two costs.

One cost of the expansion of college has been a corresponding decline in academic standards.

As college enrollments rose in the 70s, 80s, and 90s, K-12 standards were falling, with the result that an ever-increasing proportion of college students entered with weak academic skills and often an attitude that was indifferent toward learning.

In a 1997 article, Montana State English professor Paul Trout called them "disengaged" students and explained how they put downward pressure on academic rigor and upward pressure on grades - to keep them content and enrolled.

The National Assessment of Adult Literacy provides evidence of falling college standards.  In the 1992 study, only 40 percent of college graduates were assessed as "proficient" in prose literacy; by the 2003 study, that figure had fallen to just 31 percent.

And putting a quantitative peak on the mountain of anecdotal evidence that many students just coast along to their degrees, last year's book Academically Adrift showed that a large percentage of college students learn essentially nothing.

A second cost is credential inflation.  The more college grads in the labor force, the more employers require job applicants to have college credentials, even for jobs that call for no academic preparation.

James Engell and Anthony Dangerfield wrote in their book Saving Higher Education in the Era of Money, "The United States has become the most rigidly credentialized society in the world.  A BA is required for jobs that by no stretch of imagination require two years of full-time training, let alone four."

Credential inflation is hard on poor people who are prevented from competing for jobs they could do and hardest of all on poor people who spend money they need for other things on college credentials, only to wind up in low-pay jobs anyway.

I hope you'll now agree that we've oversold college.

***

Peter Sacks.bmpNO--Peter Sacks

Are too many people going to college?

This question seems simple but we can look at in through many lenses.  From what or whose perspective are there too many college goers?  From an individual's point of view at the present time?  From a societal perspective now and in the long run?  From a macroeconomic viewpoint?

First, let me make one thing clear.  It's argued that a substantial number of college-goers -- who should not be going to college -- would be better off seeking associate's degrees or other types of vocational credentials that would help them find good jobs.  This is the updated version of the old, "College isn't for everyone" argument. 

Okay, college isn't for everyone.  Besides striking me as a bit paternalistic, to make this claim as an argument that too many people are going to college isn't really an argument at all because nobody would disagree with the claim that college isn't for everyone.

No, the real argument here is whether we are over-investing in higher education leading to bachelor's degrees, and if so, how do we legitimately ration higher education opportunity.  How do we decide who "legitimately" deserves this privilege?

From whatever perspective one chooses, there are not too many people going to college.  In fact, the evidence strongly suggests that the United States is under-investing in higher education.  For the sake of economic development alone, there are actually too few people going to college.

Lately, a number of voices have suggested that too many high school graduates are going to college who shouldn't be going to college.  According to this argument, we are producing more college graduates than what the labor market can accommodate.  The result, it's claimed, is a flood of college-educated young people working at relatively low-level jobs. 

I believe that this argument of too much college-educated labor supply versus demand -- an alleged overmatch problem -- is not supported by the evidence.

We've all heard the stories of the elevator operator with a master's degree or the waiter with a Ph.D.  But the data suggests these stories are just that, the seemingly frequent, yet incidental, stories which defy our sensibilities about the purpose of higher education and whether it's worth the cost.  Even on this narrow aspect of the  supply and demand of labor, the evidence suggests that members of the college-educated workforce are either sufficiently educated or in fact undereducated for their jobs.

That is strike one for the too many going to college argument: Given the education and skill requirements of the U.S. economy now and in the future, this country is largely undereducated for the future.  We are producing too few BA degrees and advanced degrees relative to the skill sets employers actually need and will need.

A second aspect of our question today that is largely ignored in the college-no college debate is the macroeconomic value of higher education investments.
 
In fact, the evidence suggests than public investments in human capital, including higher education, yield long-term economic rates of return that far exceed most standard investments in technology or capital.  Such excess rates of return, above and beyond rates of return in alternative investments, suggest a massive amount of underinvestment in human capital and a dead loss of untold economic returns due to this underinvestment.  

That is strike two for the too many going to college argument: Too few people are going to college because current levels of public investment in human capital are woefully insufficient from a macroeconomic perspective. 

Finally, there is an even more vital aspect of this debate question that is rarely discussed in conversations on this issue.

To ask whether too many people are going to college begs another question: If too many people are going to college, then who are these people?  How should we as a society ration a more restricted level of educational opportunity?  If we actually did decide as a nation that too many people are going to college, then how should we fix this problem, and what are the far-reaching implications of this fix?  Are too many kids from wealthy families going to college?  Are there too many college-goers enrolled in social work?  Are too many lower middle class kids seeking higher education?  Whom exactly are we encouraging when they should not be encouraged?

While some critics are quick to say that we should reduce the numbers of college-goers, you can be sure that this point of view would rarely apply to their own sons and daughters.

I think most people in this room are smart enough to know that young people born to families of modest incomes and relatively low levels of education -- who already bear the brunt of the lack of college access -- will also bear the lion's share of the burden of any policy to roll back education opportunity.  

And there you have it: not just fewer people in general going to college but especially fewer people who can least afford to pay for college.

As the chosen ones, however, students from families who have the ability to pay for admissions slots at universities -- which, by the way, would dramatically shrink because of dwindling subsidies --  well these chosen few would become our new, self-perpetuating aristocracy.

At the dinner table, equal opportunity means that parents want their children to have opportunities they never had themselves.  After a few generations of striving, grandparents who had attained no more than a high school diploma now have grandchildren who are doctors, professors, and engineers.  Who in this room doesn't have stories like that in their families? 

Those stories should remind us of who we are and how we got here.  We have what we have because of sacrifices -- investments in human capital -- that past generations made, for us.  

As we speak, the American Dream is already on life support.  Adopt the notion that too many people are going to college, and we kill off the Dream for good.


Comments (6)

Carky Alleyn:

"As we speak, the American Dream is already on life support. Adopt the notion that too many people are going to college, and we kill off the Dream for good."

No, we do NOT kill off "The Dream" for good.

The American Dream exists independently of a college or university degree. There are many, many successful people who do NOT have a college degree.

And, besides, education is about not fulfilling the American Dream. It's about, or should be about, EDUCATION.

EB:

You are right that there's a need for better-educated people to fill needs in our economy. That a 4-year degree is the right or only way to fill that need is what many dispute. At the same time, when we push a very high proporation of HS grads into 4-year colleges on general principles the result that we get is a large cohort of students who drop out (and therefore don't get the alleged benefit of the 4-year degree) but who, while enrolled, are a damper on the quality of the education offered to all. And there is another cohort that graduates into jobs that don't require a degree for its knowledge/skills -- just a credential.

You're right to predict that upper-income children will be the last to forego college. Not sure what to do about that -- other than letting them pay full tuition so that some working class kids can get financial aid.

I appreciated elements of both of the positions articulated here. Both Leef and Sacks make valid points that I have personally observed in my three decades of hanging about in the world of higher education: as a student, faculty member, administrator, and now, educational consultant.

This makes me think that the most critical question isn't actually about the numbers of students headed off to college, but how our educational institutions can best serve both students and society. The problem, it seems to me, is that the model we have inherited from the past is no longer functional, and is yielding increasingly irrelevant outcomes.

We need more debates like these, and more voices need to be heard. Our educational system is badly in need of a paradigm shift.

Behind this debate is the question of whether we should have a national education policy or simply allow individuals to make their own choices about education.

Sacks is correct that we can look at the issue from different perspectives. The main perspectives are: does the economy need more college graduates and do individuals benefit from college? The evidence suggests that the answer to the first question is "no" and the answer to the second is "it depends on what you study."

I discuss this in more detail here:

http://cantheseboneslive.blogspot.com/2012/01/comment-on-too-many-people-in-college.html

Shake:

YES, too many people are going to college. And even the ones who probably should be going don't appear to be serious about it. Plus it takes years to deprogram for the brainwashing you're subjected to. In my case looking back as a 61 year old, never gonna be able to retire underachiever, I think college was a career and success limiting factor in my life.

Dan Embody:

My opinion is that whatever you decide as far as higher education, have a worthy goal. Too many people major in fields they are not suited for. In some cases, they don't even like what they major in. What employer will hire someone who is not suitable for his chosen major? Then use some common sense. If there is already an over supply of people in what you major in, what good is your degree?

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