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|
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.