Critics of higher education claim that todays college graduates know far less than those of forty years ago. At the same time, students of U.S. labor markets claim that a college degree is worth more than ever. Have American institutions of higher education discovered a modern philosophers stone Can students study less, party more, and watch their future wages turn to gold
The data used to impute the value of a college degree come from population surveys. After declining throughout the 1970s, estimates of the difference between the mean wages of college graduates and the mean wages of high school graduates increased by 15 to 30 percent in the 1980s. This stimulated endless moralizing about the wage gap. The increase was assumed to reflect the value of college skills. They had become more valuable because the new economy valued information workers. Other workers would be left behind. Politicians proposed an array of money pit programs to ensure college for everyone, tuition soared, and millions of parents applied for second mortgages on their homes.
The evidence supporting claims of increasing ignorance also mounted. Employers reported interviewing a higher fraction of the unprepared, and American businesses began spending unprecedented amounts of money on testing and training. In 1996, the National Association of Scholars surveyed the requirements for a baccalaureate in arts degree at the top 50 undergraduate institutions as ranked by U.S. News World Report. It found that todays undergraduates spend less time in class. In 1914 the instructional year averaged 204 days with class periods of 60 minutes each. In 1993 there were 156 days. Classes were 54 minutes each.
Todays undergraduates also learn less about less in less intellectually demanding courses. In 1914, 92% of the courses offered required a prerequisite. In 1993, only 59% did. In 1914, 80% of the institutions had history, mathematics and natural science requirements. By 1993, only 2% of the schools required history, 12% mathematics, and 34% courses in the natural sciences. Todays natural science courses include the Chemistry of Cooking and the Physics of Recreational Equipment.
Economists Jeff Grogger and Eric Eide wondered whether the college wage gap applied to everyone or just to certain majors. Entry level jobs in science and business have traditionally paid more than jobs in the social sciences or arts, and the 1980s saw a substantial change in the number of students enrolled in business and engineering majors. In 1978 about half of the male college graduates in Grogger and Eides sample majored in relatively high-skill fields such as business, engineering, or science. By 1987, two-thirds did. The question was whether the widely touted increase accrued to anyone who graduated from college or whether the shift in majors could account for the increase.
Majors do matter. Entry-level engineering majors earned about 15 percent more than high school graduates. Entry-level education and letters majors earned 13 percent less. From 1978-1986 male graduates in business, engineering, science and social science, saw their relative wages increase 9 to 12 percentage points a year. Those majoring in education and letters experienced no wage growth over the same period. In short, a substantial fraction of the college wage premium is due to the simple fact that student populations in the 1980s contained relatively larger fractions of majors who took entry level jobs paying higher wages.
What is college really worth In terms of lifetime wages, no one knows. The labor market is flexible, individual talent matters, and consumer wants ultimately determine everyones wages. A computer wizard may enjoy a high salary for the first few years out of school, only to be surpassed later in life by someone with a talent for sales.
Employers clearly reward people with good cognitive skills. College curricula used to require that graduates demonstrate them. That has changed. Now that students can slide by with slip-shod majors specializing in pornography, gender garbage, and postmodern claptrap, businesses spend billions on pre-employment tests. Some savvy employers emphasize grades in specific courses with known content. They know that work creates value, and they want people who have proven that they are willing and able to do it by working to improve their intellects while in college.
Students who study less and party more also miss the personal satisfaction that comes from mastering both a demanding body of knowledge and the method and process required to build it. The information age is characterized by rivers of cheap, unorganized data. Fishing important facts on essential topics from those rivers is easier if one knows something to begin with. So is making sense out of a life sure to be buffeted with new innovations for the next fifty years or so.
 Jeff Grogger and Eric Eide. Spring 1995. Changes in College Skills and the Rise in the College Wage Premium, Journal of Human Resources, 30, 2. Pp. 280-310.
Linda Gorman is a Senior Fellow at the Independence Institute, a free-market think tank in Golden, Colorado.
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