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12/03/2006

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Jack

IF! as most of the thread indicates, higher education IS primarily voc tech, a BA and a pile of debt is a clumsy "signal" to a prospective employer, and I think that's often the case, it's time to reflect upon more efficient means of "signalling" and acting.

Many of the entry level jobs that require "a degree" seem only to require a level of competence in English, science or math that is available at HS levels, so "college" seems something like a crude and costly way of "sorting" for such abilities. Today little differentiation is made by the employer if an applicant shows up with a HS diploma even though the Advanced Placement or other front-runners could easily compete with many college grads.

So a win-win may be that of employers giving more consideration to good HS students with an apprentice-like job designed that college could be fitted in over a longer time around the job. With turnover so high in the US the "deal" for the employer would have to be made worthwhile with lower "apprentice" wages, with government kicking in a tax break (much of which the Feds would get back due to the "student" being a tax paying employee) while the benefit to the student would be that of both learning on the job as well as not being saddled with crippling debt.

Even in the sciences or rapidly changing technical areas such as bio-tech or IT I suspect that getting started on the job and learning more technical aspects may be more efficient that learning so much that will be obsolescent by the time of graduation.

Any thoughts? Jack

Haris

Elisheva
Obviously older students face a more difficult choice: given their education and experience, their labor is worth more, and they face a much higher opportunity cost. If a 22 year old with no experience goes to grad school, he misses three years of intro salary. Someone with experience obviously misses three years of a much higher salary. I don't think that a general policy is affected by this, since more experienced workers will always face a higher opportunity cost than inexperienced ones.

Corey

I think this whole discussion misses something in that it insists of economicizing education. This is what I was hinting at when I said "public good", which I now admit was a mistake. I should know by now not to use terms on here that appear in econ textbooks unless I want that meaning.

Anyway, I am also an older student, in my third year of borrowing $30K to go to law school instead of making $130K as an engineer and part-time investor. I gave up my car, live in an apartment, and although I have job lined up for next year, unless and until I go for and make partner, my income minus loan repayment won't be higher than if I had contined on in my engineering career. For all I know, my number might have come up at one of the startups I was working for and then I would be sitting on a boat off France reading Adorno rather than sitting in the cold with a Federal Courts textbook.

Anyway, long story short, I don't know and don't care if going to law school ever pays back. It was and is a fun and interesting experience. One that I am lucky to be able to take off and do. I feel more educated, I understand life and the world around me more, and I feel proud, rather like the time I ran a Marathon or proposed to my fiance. Graduate school improved my well-being, in an entirely non-economical sense.

Education is a reward unto itself in other words, and more people should be able to do it. That is why tuition should be cheaper. (And by the way, if lower prices indicate lower quality, then we are all better educated than Posner or Becker because we paid a lot more.) :)

When you economicalize something like learning, it cheapens (in the moral sense) the whole process. Now the tuition gets set according to the loan rate, which is set in reference to the default rate, which is set in reference to legislation and indirectly the earning power of graduates, but of course that is the average earning power, which disincents alternate career paths like public interest that pay less. And then we all run around like little robot zombies lining up to qualify for our assigned spot in the rotation, and human striving gets reduced to competition with other robots for a better certification leading to a better spot in the rotation.

Bah, its Christmastime, and the poorhouses are full of people for whom a law school education would be life changing. And I am blessed to have one, and I am going to try and help them. Peace and joy and best wishes to you all.

Haris

Corey
I agree with you about the benefits of education to a person, and I definitely agree that more people should have access to it. I wouldn't trade my time in college for anything, regardless of whether it ends up reflected in my paycheck or not. [Fortunately, it looks like it will. Go Tigers!] I disagree with you, however, in that I don't share your disdain for economics and its use in this context. The benefits we're talking about, the ones you call "non-economic," don't have to be excluded from economic analysis. Personal happiness or psychic rewards or "utility" or whatever inadequate word we want to use, when one weighs the costs and benefits of going to college, there is no reason not to take broadened horizons and a sense of achievement and other non-monetized units of "utility" into account. If your lifetime earnings are the same going to college or law school as they would be not going there, but going to college gives you those lifetime earnings along with an exciting and fun experience, you would obviously choose to go to college. As much as it pains you, that's economics.
The bigger question is whether federal subsidies of student loans are the best way to give access to most people to this education. Because federal loan guarantees allow students to borrow more, colleges have room to charge more in tuition - willingness to pay is constrained by ability to pay, after all. Higher tuitions invite more federal subsidies, and thus costs of college spiral upward while salaries of teachers and social workers don't. [That's due to other problems in those areas. Tenure being the worst of them all.] The question, then, is how to ensure that everyone who wants to go to college can do so but also that a sufficient number of college grads take the jobs we need them to take. Since reform of these other fields is unlikely [California tried to reform tenure laws...and failed] the way higher education is paid for should be the first step in stopping the disparity between costs and certain salaries. The simplest step would be to deny federal subsidies to students whose families can afford to pay for college. I have no idea what the next step should be.

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