With
student debt growing by the day, a discussion is raging about how much college
degrees are actually worth. The Library of Economics and Liberty’s EconTalk podcast contributes to this
conversation in a discussion with George Mason University’s Bryan Caplan.
Caplan covers a number of subjects, focusing particularly on the oft-cited 83
percent wage premium for college grads, arguing that the number is vastly
overstated as it doesn’t take into account the large number of students who
attend college and don’t graduate or the fact that smarter students who
graduate college would have likely fared better in the job market even without
a degree. Instead, Caplan notes that the premium for students who attend but
don’t graduate is somewhere closer to 10 percent, which makes the prospect of
paying for college considerably dicier for those who aren’t sure they’ll
graduate.
More
generally, Caplan argues that the value of a college degree has little to do
with the content that students actually learn, and instead is based mostly on
the signal it sends to employers that a student is intelligent and hardworking.
Among other things, this has interesting implications for federal education
policy; if the value of a degree is mostly as a signal of preexisting
attributes, policies that attempt to send a greater share of students to school
will likely only result in increasing the work that talented students need to
do to stand out from the pack, without significantly increasing prospects for
less accomplished students. This also could spell trouble for MOOCs: If
employers see colleges primarily as a grueling test for students to prove their
determination rather than a learning experience, they may be less inclined to
take MOOCs seriously, regardless of the actual quality of the education.
While
we don’t fully agree with everything that is said, overall, this is an
extremely engaging listen and worth hearing in full.