Explaining the Higher Education Bubble

Here’s a novel explantion of the tremendous increase in the willingness to pay for higher education:

My hypothesis is that it is precisely the dumbing down of U.S. education over the last decades that explains the increase in willingness to pay for education. The mechanism is diminishing marginal returns to education.

Typical graduate business school education has indeed become less rigorous over time, as has typical college education. But typical high school education has declined in quality just as much. As a result, the human capital difference between a college and high-school graduate has increased, because the first increments of education are more valuable on the job market than the later ones. It used to be that everybody could read and understand something like Orwell’s Animal Farm, but the typical college graduates could also understand Milton or Spencer. Now, nobody grasps Milton but only the college grads can process Animal Farm, and for employers the See Spot Run–>Animal Farm jump is more valuable than the Animal Farm–>Milton jump.

That’s consistent with a point that I’ve made here from time to time: that what was expected of an eighth grade graduate a century ago was tremendously greater than what is expected now.

I would also propose a demographic explanation. The cohorts that follow the Baby Boomers are significantly smaller than the Boomers and, since they’re younger, less experienced. More higher education, certifications, etc. enables them to compete for the relatively few jobs that are being created with more experienced competitors.

Hat tip: Tyler Cowen

30 comments… add one
  • michael reynolds Link

    I don’t buy the assumption that high school is easier. My son’s learning more than I did at the equivalent grade. (Something as opposed to nothing.) His presentations and papers are certainly more challenging. The college I (briefly) attended was mostly a joke. So, I’m not seeing the basis for the ‘good old days’ assumption.

  • steve Link

    Let me paste what I wrote at Cowen’s site.

    “I have problems with the high school rigor assumption. When I went to high school, calculus was not even offered. I asked my wife, who went to Girl’s High in Philadelphia, probably the best high school then in the city, and they did not offer calculus either. Today, you pretty much dont get into any top school without having taken calculus. All of the local high schools offer a chance to take courses at local universities. Schools now offer multiple physics and chemistry courses. In my day, there was one of each. Need I add that kids today have much better computer skills than those in the 80s?

    Getting out of the sciences, history is taught much better. In my day, we memorized dates. Now, they read multiple sources and look at root causes for changes in history. As to English/literature courses, I hear these awful things, but I know that my kid read Animal Farm in 9th grade. His class read at least 6 Shakespeare works. To be fair, they also read some more modern stuff that I thought was schlock. Still in total, I dont see the great dumbing down.”

    I went to a large high school in southern Indiana. I was in advanced placement everything, but I played football, basketball and baseball, so I hung with the jocks a lot. No one read Milton. The smart kids actually read Shakespeare, everyone else used Cliff’s Notes. There were a lot of stupid kids then who were not interested in academics. I really dont know of any evidence that shows today’s kids being dumber than those 40 years ago. If you have any real data to support this, it should be presented.

    Caveat. I am highly influenced by my son’s experience and our time spent helping with speech and debate and coaching fro Scholastic Scrimmage, a local high school equivalent of the College Bowl.

    Steve

  • I pretty much agree with Steve. I would also like to see some data, but I suspect it doesn’t exist because I doubt there was any data from schools 100 years ago.

    What I do know is that my kids’ elementary experiences are so much better than mine, especially with respect to math. They’re actually taught concepts and how numbers relate to each other instead of the rote memorization I got.

  • Brett Link

    I agree with Steve and Andy that high schools offer a lot more for students willing to take the opportunities available. My high school had a ton of AP classes as well as some concurrent enrollment classes with the local community college and university.

    On the other hand, I think the absolute base minimum necessary to pass and graduate (as well as the willingness of public schools to fail students and force them to repeat classes) has gone down to the point where everybody graduates if they bother to show up enough times. That’s understandable, since virtually all the good jobs for high school drop-outs* have evaporated in the past couple of decades – it creates a ton of societal pressure not to flunk students unless they just don’t bother to show up for class at all.

    * I just know someone is going to jump in and say that they know someone who made it despite being a high-school drop-out. I’m talking about the “rule”, not the exceptions that prove it.

  • PD Shaw Link

    Literature is a problematic reference point. Fashions come and go. Other than an exceprt from Paradise Lost, I’ve never read Milton or Spencer. These are old white guys, and America prefers a little more relevance. I wonder if Animal Farm will retain its relevance? Is he suggesting the book is difficult, or that students lack a sense of the history of fascism and communism to appreciate it? I remember the cartoon version of Animal Farm being a frequent “movie treat” in grade school.

    I look forward to seeing what my kids read as they get into Middle School and High School.

  • michael reynolds Link

    Teaching methods are much improved over what we endured. My son (just completed 9th grade) and actually came away with serious opinions on and insights into Romeo and Juliet. They read the play, they watched several movie adaptations, they broke down timelines, (the play covers just four days) then they wrote papers. He was appalled that I didn’t know how many people died in R&J. (Six it seems, including Lady Montague.)

    He’s spending a month of summer now building a web site for the school’s paper and preparing for a science experiment next year when he will rigorously test condoms. (Yes, he’s a bit of a provocateur. Can’t imagine where he got that.) When I was in 9th grade I was sleeping through droning lectures and beating tests by glancing at the chapter headings in a textbook. School was a joke to me.

  • Icepick Link

    I don’t buy the assumption that high school is easier.

    There’s selection bias here. What kinds of efforts have you and steve made to ensure your children are in good HSs? Come put them in Maynard Evans High School here in the ‘hood and I don’t think you will be so effusive! It was cause for celebration when Evans finally got a grade of ‘C’ based on improved results, instead of the typical ‘D’s and ‘F’s.

  • Icepick Link

    Teaching methods are much improved over what we endured.

    They don’t use rods, staves and racks anymore? What do they use, electro-shock?

  • Drew Link

    There is a portion of me that is very sympathetic to what Steve and Michael are saying. I went to jack shit high school, and although I know some will disagree here, I seem to have done OK. I just think they are going too far.

    I, too, recall not getting exposed to certain subjects until later in the education stream. However, I think the point of departure is that exposure does not necessarily equal understanding or learning. and anyone who denys grade inflation is just not paying attention. Our daughter just graduated middle school with straight A’s …..oops, not quite, they made her take a sewing class. (a sewing class????) and she got a B plus. now she is very bright and hardworking. And she is mature beyond her age as she has complete disdain for those in the class just going through the motions. But no one gets an F. No one gets a D. In my day, when I had to walk 10 miles to school, up both ways, people flunked. So my point is that at the top, perhaps education standards have advanced. But a philosophy has emerged that no one can fail. So for the masses, remedial education is required. I don’t want to put words in his mouth, but I think that is where Dave is going.

    Moving on, I’ve noted that our daughter is entering what I called the second best high school in the state of IL. It’s called Benet Academy. You can look it up. Now the truth be told, such rankings are really just BS. Who knows who’s best? But by standardized test scores and college admission results, it certainly has to hit anyone’s top five list. It’s a Catholic school, but that’s not why we pushed this. Even though our public school district is a fine district, Benet is a no nonsense high level prep school. So I’m circling around to Dave’s point. We lost faith in the public schools, as good as our district is. And we wanted to press the gas peddle. Because at the end of the day I think Dave is fundamentally correct. We have inspected the curriculum from fresh to senior. We have looked at the reading lists. We have compared them to the public schools. And then of course you look at college acceptance. It’s a bit shocking. Men vs boys.

    So do I think the entire system today vs 30 years ago is broken? No. Do I think it’s diluted? Yes. Most importantly, at the top I think things are fine. But for the bottom, oh, 75%, I think Dave’s spot on. (and I guess Cowen)

  • PD Shaw Link

    @icepick, I think the question is whether a Maynard Evans High School existed back in the glory days the author is describing.

    I skimmed through the links the author includes to demonstrate lessening academic rigor, and they strike me as just as anecdotal as the comments in this thread, and just as equally valid. In one of them, the author laments that when he was high school, he read Silas Marner, and now they don’t. Really, Silas Marner? I’ve not read Silas Marner, and you know who else hasn’t? Abraham Freakin’ Lincoln, that’s who.

  • michael reynolds Link

    Ice:

    There’s selection bias here.

    That’s certainly true. But differences existed back in the day (whatever the hell era we’re talking about, I have no idea) and my parents did their best with limited means to get me in better rather than worse schools.

    Drew:

    Our daughter just graduated middle school with straight A’s …..oops, not quite, they made her take a sewing class. (a sewing class????) and she got a B plus.

    She’ll never get a job in a Haitian sweatshop with that kind of black mark on her record.

    PD:

    I was at a book event and heard Orson Scott Card give the keynote. He spent about half the speech attacking some of what’s taught in literature, singling out Nathaniel Hawthorne who he said was an awful writer. I feel the same way about Silas Marner — a book that went further to killing my interest in writing than any other single book. Yes, Ms. Eliot is a better writer than Mr. Hawthorne, but that’s no excuse for inflicting Silas Marner on young minds.

  • PD Shaw Link

    @michael, I think the underlying complaint here on literature is in the absence of a canon. By not insisting on a canon, the program lacks rigor because kids aren’t being forced to read outside their comfort zone. Its probably true that schools are more encouraging of kids choices directly or try to accomodate them. I tend to think a balance is in order. I didn’t see Shakespeare or Huckleberry Finn mentioned as books not read any more; that would perplex me.

  • Icepick Link

    I think the question is whether a Maynard Evans High School existed back in the glory days the author is describing.

    I’m sure there were. One would need to do some rather deep work to figure out what the truth was/is. Anecdotal evidence (mine and steve’s and Michael’s) doesn’t tell us much.

    my parents did their best with limited means to get me in better rather than worse schools.

    I’m sure. But I also doubt they had the resources you do, and almost certainly lacked the mobility. Where are you living now? Marin County? Pure SWPL-topia.

  • Drew Link

    It’s keeping us up at night, Michael.

    Can we count on you for appropriate subsidies?

  • steve Link

    @Ice- Our son went to the local high school. Judging by test scores, it is not exceptional, just a bit over average. We live in a rural area, with several developments of housing in the $400k-$500k range. We did not send him to the highly rated, local private school because we thought a high percentage of the kids we knew from there were snots. Have we personally tried to expand his education? Yes.

    @Drew- I think there is some merit in the idea that our top kids are as good, probably better educated than 30-40 years ago. I dont know about the rest as I dont think we have a lot of data to go by, and if our system is capable of turning out really good students, what happens at lower levels? I think a lot of this goes to the idea that we lead the world in education 30-50 years ago. When you look at our international test scores, we were at the bottom of the barrel in those years. OTOH, if you are familiar with the Putnam test, we have always done fairly well on that, and it has not changed.

    Steve

  • There’s more to know now than when I grew up.

    We can start with the map. My geography lesson included the USSR. And the others.

    Watson and Crick published the double helix the year I was born. I was studying genetics 18 years later. Now we can get our own genome evaluated for a couple hundred bucks.

    In 1990, I watched children in preschool use learning games on computers.

    Our children are in a different place. One day I’ll learn to text them.

  • Oops. Watson and Crick was 1953. Close enough.

  • michael reynolds Link

    Ice:

    Where are you living now? Marin County?

    I’ll admit something you can use against me some other time: I am losing awareness of my past and of the realities of the working class. I still understand it and still remember it, but it’s becoming less of a visceral thing and more of a memory. I’m catching myself being a rich-adjacent asshole and I don’t like it. It’s corrupting my awareness.

  • “Now, nobody grasps Milton but only the college grads can process Animal Farm, and for employers the See Spot Run–>Animal Farm jump is more valuable than the Animal Farm–>Milton jump.”

    The reason that high school and middle school kids are not processing Animal Farm (which is a simple allegory suitable for 8th-9th grade) is that the material is frequently presented without the students learning about the historical context from which it was drawn . You’d be surprised how well teaching history along with literature works – earlier generations who grew up during the Cold War did not need to be taught this so explicitly as most of Orwell’s references and allusions were embedded in the culture and kitchen-table talk of their elders about the news or recent past. Once they understand the context, not only is Animal Farm comprehensible, but so is 1984 or Darkness at Noon.

    There’s no reason an American kid born in 1997 would arrive in class knowing any more about Stalinism from daily life than they would about chariot-racing or homesteading.

  • michael reynolds Link

    They ought to be teaching Brave New World over Orwell. We’ve spent 60 years waiting for Orwell and ended up with Huxley.

  • We were required to write the comparison-contrast paper on Huxley and Orwell in the 11th grade. My last year, thank god. About 1974.

  • Icepick Link

    I’ll admit something you can use against me some other time: I am losing awareness of my past and of the realities of the working class.

    Just so long as you aren’t telling me how tough you’ve got it, or what it’s like to be a prole now, I don’t really care. If I had the money I certainly wouldn’t mind livinig in Marin County myself. (All the dope smoking wouldn’t be anything new. The grandmother in the family across the street sits out on the porch smoking dope most nights. When the wind is blowing in our direction the second hand smoke can choke.)

    My point with that is simply that you especially have a mobility (because of a combination of your income and aversion to staying in one place) that gives you great power in choosing the environment your children grow up in.

  • steve Link

    Late correction. My son reminded me that they read Animal Farm in 8th grade.

    Steve

  • We’ve spent 60 years waiting for Orwell and ended up with Huxley.

    I gather you haven’t checked your cookies lately. Big Brother is watching. But he’s watching for Google, Apple, and JPMorgan. Not to mention that friendly Nigerian from whom you’ve been receiving so much email lately.

  • I wonder how you’d go about deciding the question we’ve been discussing one way or another on an empirical basis. Test scores might be a start. Consider the renorming of the SAT that took place a while ago.

    You could do systematic analyses of curricula. Word counts in textbooks. On-time graduation rates. I wonder if there have been systematic studies of college preparedness of incoming freshmen.

    So far the best we’ve come up with are anecdotes.

  • PD Shaw Link

    I think the math is a little easier to see the changes.

    I learned my division and multiplication tables in Fourth Grade. My son just completed that same material at the end of Second Grade. They are starting earlier.

    Also, I’ve noticed that “comfort with algabreic concepts” like use of symbols are being introduced in grade school. I don’t think the idea of using variable X to help solve a problem was something I learned until 8th grade. Algebra is seen as having more broad uses.

    My high school did have calculus, but you really needed to test in the top 5% of math at the end of eighth grade (showing proficiency in Algebra after merely having taken a pre-algebra course) in order to be on track to take calculus your senior year. I did not.

  • Sam Link

    So far the best we’ve come up with are anecdotes.

    There are still schools just as rigorous as the “good old days”. If we only graduated 10% of people before, and 40% now, then comparing the median college graduate doesn’t seem like a useful measure. If you want to graduate 100% of people from college than the median college experience HAS to get dumbed down. What’s the quality of the top 20% of college students now?

  • Icepick Link

    Big Brother is watching. But he’s watching for Google, Apple, and JPMorgan.

    Yeah, but Orwell completely missed that Little Brother would be watching too.

    We could look at some of the big international tests that are done. Stuff like PISA might be a good place to start, although that will depend on how much they’ve changed the tests and methodologies over time. Still, that is probably a managable place to start.

  • Drew Link

    I’m catching myself being a rich-adjacent asshole and I don’t like it. It’s corrupting my awareness.

    Just drop the “asshole.”. This is psychological problem. There is nothing wrong with being successful. Everyone wants it. Those who can’t, or are not willing to do what it takes are envious. Stop with the faux guilt.

    Government- your favorite entity – is no answer. We give a shit pot to charity in various forms. If you think you have too much, do it. Further, you have a unique talent. Don’t you think you could spend time with younger people developing their nacient skills?

    For confidentiality reasons I can’t give specifics, but I do exactly that. One of the schools I attended has a bunch of young engineers, and an entrepreneurs program, but they don’t know jack squat about business planning, budgeting, how to make a pitch to a capital provider. But I do, and I help them.

    You can be an “angel” investor. I am.

    It goes on and on. If success brings you money and intellectual capital, stop with the “now I’m an asshole” bullshit. And don’t give it to some idiot government beaurocrat, do what made you successful and pull the next guy or gal up the ladder. It’s fallen out of popular favor, but that’s how it really works.

  • One metric to compare education, past and present, might be how remedial courses in English and Math are now almost de rigueur at universities, particularly state universities. Here’s a 2011 WaPo article by the Director for the Center for Higher Ed Policy Analysis at USC.

    Did most universities have remedial courses when you were in school? Georgetown U, where I went, had one, but all the students were foreign students, getting up to speed in English. That’s not the case now.

    I got addition in second grade, multiplication in third. That was in the mid-50s. My HS — a DoD school in Ankara, Turkey — offered Calculus as well as an Advanced Algebra that delved into set theory and topology. AP tests were just coming in for the SATs, but we didn’t have courses tailored for them. That was in the mid-60s. When I was a sophomore in HS, both ‘New Math’ and Ecology were the new things and we had brand new textbooks. I certainly benefited from them as the way they presented information worked well with the way my own mind worked.

Leave a Comment