I said I’d write some more about higher education today and this is it. The table below lists the percent of the population with college degrees, the gross state product, and labor productivity for six states not exactly taken at random.
| State | Percent with college degrees | GSP in Millions | Labor Productivity |
|---|---|---|---|
| California | 37.9% | 2,448,467 | 295.87 |
| Oregon | 37.6% | 228,120 | 333.33 |
| Washington | 40.9% | 448,404 | 234.49 |
| Iowa | 45.5% | 171,532 | 391.15 |
| Minnesota | 49.8% | 334,780 | 289.10 |
| Wisconsin | 41.3% | 300,699 | 369.08 |
Why did I pick those states? Because the three West Coast states I picked are frequently held up as examples of the future of the economy and I just happened to know that the Upper Midwest has a very strong tradition of higher education, bolstered by the large number of small public and private colleges in those states. Basically, lots of farmers send their kids to college in Iowa, Minnesota, and Wisconsin.
If this were a doctoral dissertation rather than a blog post I’d go to the trouble of listing all 50 states rather than just a 6 state sample. If there is a relationship between a state’s percentage of college educated individuals, its gross state product, or it labor productivity, it’s not an obvious straight-line one.
Labor productivity is defined as the gross state product divided by hours worked. I couldn’t find that reported by state so I calculated it myself. I’m going to admit right off that in calculating the labor productivity factors I’ve made all sorts of assumptions so it can’t be anything more than the crudest of approximations. But here’s the thing. If there were a relationship among any of those things, you’d expect to see something even in a crude approximation. In a vague analogy with the Michelson-Morley experiment, that table is significant because of what it fails to reveal rather than what it does.
If you’ve got some compelling proof beyond average incomes that higher education increases income, GDP, or labor productivity, show it. The income differentials between different sectors of the economy and different jobs within sectors are so enormous that averages tell us nothing. A couple of hundred MBAs who just happen to be CEOs of Fortune 500 companies skew the results of the tens of thousands of English majors working at minimum wage jobs too much.
Sources:
U. S. Department of Education
Overflow Data (based on Census Bureau Community Survey)
Bureau of Economic Analysis
Preaching to the choir as far as I’m concerned. I’ve never believed education equalled productivity.
But that’s not why I think the west coast is the future. We’re the future because we’re right about how society should function. We’re right about how life should be. We are the perfect blend of Steve Jobs and The Dude.
People want to be here. We will always be able to attract the best people from across the country and around the world. No one wants to go to Wisconsin, even people from Wisconsin don’t want to. Put it to any young engineer graduating top of his class: You want to live in Green Bay. . . or Hollywood? It’s a choice between Mordor and Rivendell.
Michael,
California does have great geography and a lot of benefits. But it’s also so expensive that many people opt to leave the state due to the cost of living. People may indeed want to be there, but not everyone can afford it.
“We’re the future because we’re right about how society should function. We’re right about how life should be………..”
And they wonder why they lost the election, and have to resort to strange theories about Boris Badinov.
Indeed. Darwinism in action? We aren’t just the pretty girl at the dance because we have sunshine (though not lately), we’re also attractive because we are where you go if you’re the best.
Guarneri:
Seriously, try reading something besides zero hedge. You’re sounding senile.