The education bubble, and bad statistics 

Few things cause writers to lose their critical faculties like the suggestion that college is overrated and often a waste of time and money. Jacob Weisberg at Slate, for instance, attacked Billionaire Peter Thiel for his "appalling plan to pay students to quit college." I read Weisberg's piece looking for his argument as to why this was "appalling," but instead all I got was more assertion that this is a "nasty idea."

And today, at the Atlantic, Adam Clark Estes takes on Thiel, too. Thiel says there's a higher-ed bubble. He says a college degree is over-valued. Estes points to "a well-timed study from Georgetown University's Center on Education and the Workforce" which he says indicates "Thiel's assumptions are way off base."

The study shows that people with college degrees get paid much more than people without college degrees, and that the pay premium typically exceeds the cost of college. But it's the height of sloppy thinking to say that college is then proven to "pay for itself."

Here's my hypothesis:

1) The following factors, in themselves, generally increase one's pay

A) Being smarter

B) Being from a wealthier, more connected family

C) Having good work habits/work ethic

D) Being white

E) Going to a high school with more wealthy people and more college graduates as parents and alumni

2) The following factors, in themselves, make it easier to get into and graduate college

A) Being smarter

B) Being from a wealthier, more connected family

C) Having good work habits/work ethic

D) Being white

E) Going to a high school with more wealthy people and more college graduates as parents and alumni

So, in other words, it's possible that any correlation between income and a college degree stems from both having a common cause, rather than a college degree, or the college education it implies, leading to higher income.

I think there's probably a mixture: common cause + value of education + value of college degree as a screening process + irrational discrimination in favor of college degrees. But in the G-Town study, I can't find any acknowlegement of the ambiguity.

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Timothy P. Carney

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