Non-Random Readings: Calculating the Value of College

From this week’s New Yorker and just in time for the September board meeting comes a timely review of the arguments made on behalf of (and against) various theories of the value of a college degree, which in one writer’s estimation lead to a conclusion similar to the one we’ve been trying to make in various ways since 2010:

Perhaps the strongest argument for caring about higher education is that it can increase social mobility, regardless of whether the human-capital theory or the signalling theory is correct. A recent study by researchers at the Federal Reserve Bank of San Francisco showed that children who are born into households in the poorest fifth of the income distribution are six times as likely to reach the top fifth if they graduate from college. Providing access to college for more kids from deprived backgrounds helps nurture talents that might otherwise go to waste, and it’s the right thing to do. (Of course, if college attendance were practically universal, having a degree would send a weaker signal to employers.) But increasing the number of graduates seems unlikely to reverse the over-all decline of high-paying jobs, and it won’t resolve the income-inequality problem, either. As the economist Lawrence Summers and two colleagues showed in a recent simulation, even if we magically summoned up college degrees for a tenth of all the working-age American men who don’t have them—by historical standards, a big boost in college-graduation rates—we’d scarcely change the existing concentration of income at the very top of the earnings distribution, where C.E.O.s and hedge-fund managers live.

Being more realistic about the role that college degrees play would help families and politicians make better choices. It could also help us appreciate the actual merits of a traditional broad-based education, often called a liberal-arts education, rather than trying to reduce everything to an economic cost-benefit analysis. “To be clear, the idea is not that there will be a big financial payoff to a liberal arts degree,” Cappelli writes. “It is that there is no guarantee of a payoff from very practical, work-based degrees either, yet that is all those degrees promise. For liberal arts, the claim is different and seems more accurate, that it will enrich your life and provide lessons that extend beyond any individual job. There are centuries of experience providing support for that notion.” 

Read the rest to see how he got there…

More on the Value of Liberal Arts

A timely piece from Inside Higher Ed this week, which relates well to some recent discussions here and there (and elsewhere):

There are numerous headlines about “the death of liberal arts,” and countless stories about student debt lead with the anecdote of the unemployed literature major. Questions about preparing an informed citizenry don’t make headlines.

“There’s a lot of negative press out there about how there’s no value in college, you’re not going to get a job, there’s no value in an English degree,” said Georgia Nugent, president of Kenyon College, a liberal arts college in Ohio.

But it appears that a more concerted effort to make the case for the liberal arts is emerging. In recent weeks, several groups including the Phi Beta Kappa Society and the Council of Independent Colleges have announced efforts to promote the liberal arts…

The major challenge that all these new efforts must confront, however, is why – despite copious data and anecdotes that support the fact that students with liberal arts educations have skills that employers say they’re looking for, earn more over the course of their lives, are more likely to get promotions, and are generally happier and better citizens – their message has not been getting through.

It also includes this quote, which sums up the position of some of us nicely:

“If we as a society lose our understanding of the value of liberal arts in America, then we have lost something crucial to the success of our country,” said Nugent, who is chairing the CIC’s initiative.
And if you make it to the end, you’ll see a(nother) nod to Thomas Jefferson, too.

About value…

Thought this was an interesting take on the concept of “value”

Advertising adds value to a product by changing our perception, rather than the product itself. Rory Sutherland makes the daring assertion that a change in perceived value can be just as satisfying as what we consider “real” value.

Not sure how I feel about what he is saying or how it might relate to our own discussions of value, but I thought it was fun to watch, if a bit flip – very different from what I typically think about.