Jennie Brand (Cohort 2) The Wall Street Journal
Current crop of California college grads can't find jobs they want
Dollars for Diplomas - My print column this week examines the value of a college degree, which studies suggest is far less than the often reported figure of $1 million, but more than the cost of attending college – at least for the average student.
Many such estimates don’t account for tuition and lost wages, and don’t discount future earnings. The Organisation for Economic Co-operation and Development, an intergovernmental group, does, and finds that the net value of a U.S. college degree is about $325,000. However, the OECD doesn’t control for factors that differ between students who do and don’t attend college after high school. “We can’t control for it directly,” said Andreas Schleicher, head of the indicators and analysis division for the OECD’s Programme for International Student Assessment in Paris.
There is a low likelihood that the non-college goers are perfectly comparable to the college goers,” said Jennie E. Brand, associate professor of sociology at the University of California, Los Angeles, who has studied the value of college.
Another weakness is that the estimates don’t necessarily say much about how the value of college would be affected by a big influx to undergraduate programs. “All of these estimates are about, What if you add just one student?” said Mark Long, an economist at the University of Washington. “They’re not, What if you add 10%? That may dilute the labor market.”
“If we do vastly expand college-going then we will likely see the wages of college grads fall,” added Lawrence Mishel, an economist and president of the Economic Policy Institute, a progressive think tank in Washington, D.C.
However, Michael Mandel, chief economic strategist of the Washington, D.C.-based left-leaning Progressive Policy Institute think tank, said that is true only in a stagnant economy. “I view college graduates as both producing innovation and also being the beneficiaries of it,” Mandel said.
On the positive side of the ledger for universities is the finding of many studies that students on the fence about matriculating stand to benefit the most. “The return is probably higher for people at the margin of college attendance than for the best-prepared students,” said Sandy Baum, who studies college value for the College Board.
Also, while many studies base their estimates of college value from data gathered decades ago, the value may have risen since then. There is a big premium associated with graduating from college, and that premium has risen dramatically over the last 30 years or so,” said Jeffrey Grogger, an economist at the University of Chicago’s Harris School for public policy. “We see big improvements in returns to college, consistent with greater demand for skills in the labor market.”
Even Mark Schneider, something of a skeptic about estimates of college value he sees as inflated, said, “First, all the evidence we have is that going to college and earning a bachelor’s degree pays off — it’s one of the best investments a person can make.” He cautioned, though, that, except at the very top-name brand private colleges and universities, students don’t recover the higher costs associated with attending a private school.”
“Average returns are not that meaningful for education policy because it is unlikely to affect the average,” added Pedro Carneiro, an economist at University College London who has studied college value, “nor are they that meaningful for any given individual because he is unlikely to be exactly the average person.”
Or as Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, who has studied the varying value of different college majors, puts it, “The drive is to get a college degree. Well, not all college degrees are created equal.”