What Colleges Sell

The recent college-admissions scandal has me, and probably many of you, thinking about the institutional power of elite colleges. It’s remarkable that even those we would consider society’s “winners” aren’t immune to their pull. Take for example Olivia Giannulli, who is from a wealthy family; has nearly 2 million YouTube followers; owns a successful cosmetics line (pre-scandal, anyway); and whose parents, Laurie Loughlin and Mossimo Giannulli, allegedly paid $500,000 to get her and her sister accepted to USC.

Why?

The standard line is that the point of college is to learn. Getting into a better school avails one of better information, which translates into more marketable skills—human capital accrual, in economics jargon. The many deficiencies of this view have birthed the somewhat-cynical “signaling theory”: the idea that college degrees serve mainly as signals to employers of positive, pre-existing characteristics like intelligence or attention to detail.

Signalling theory is powerfully convincing, but it doesn’t fully explain the insanity endemic to the elite college scene. There’s more going on at the individual, familial, and societal levels.

First the individual. If the human capital isn’t the point, social capital could be. The student bodies of elite schools are well curated for networking among the intelligent, the wealthy, and what we might call the “legacy crowd”—non-mutually exclusive groups that mutually benefit from this four-year mixer. Who you sit next to in class might matter more than what’s being taught.

Colleges, particularly those of renown, provide a sense of unabashed community that is in short supply elsewhere in American life. If you read universities’ marketing or speak with admissions staff, this is often a selling point. The idea that former classmates and fraternity brothers become a nepotistic social network post-graduation is intuitive, and probably a very compelling reason to attend a particular school.¹

What’s true for the individual is true for the family. Parents want the best for their children, and they know the kinds of doors attending the right school will open. But for parents, there are added elements at stake: self- and peer-appraisal.² That is, as educational attainment has become accepted not only as a means to but validation of social mobility, parents have come to define their success by the institutions their children attend. YouGov polling found that thirty-four percent of parents would pay a college prep organization to take a college admittance test on their child’s behalf. One in four would pay college officials to get their child into a good school.

I’d bet this is an understatement caused by social-desirability bias.³

Last up, and most interesting, is society at large. Even though most of us won’t attend a very prestigious university, if we attend one at all, the legitimacy of those institutions still rests on our perception. For us to be bought in, we need a culturally acceptable premise for the power enjoyed by Harvard, Yale, and the like—a role that can’t be filled by the networking and status-driven benefits I’ve described so far. This brings us full circle, back to the idea of higher education as a method of information conveyance.

Though the human capital accrual theory of education is probably bunk, most people’s belief in it feels sincere. In my view, this is the confluence of three phenomena: observed correlations between educational attainment and positive outcomes, our cultural commitments to self-sufficiency and equal opportunity, and a mostly unstated but potent desire to manufacture equality of outcomes.

Elite colleges sell these ideas back to us by marketing education as a transformative experience, an extrinsic asset to be wielded. In an unequal society, this is a particularly comforting message, because it implies:

The world works on meritocracy. High-status individuals not only are better than most, they became so through efforts the rest of us can replicate.
We can achieve equality of outcomes with sufficient resources. This has the added bonus of perpetuating the demand for high-end education.

The meritocratic, knowledge-driven higher education model is a product we’re all happy to buy because we like what it says about us. Its violation is disillusioning on a societal level, hence the disproportionate outrage created by scandal involving some 50 students.

Perhaps this is an opportunity to reexamine our relationship with and expectations of the upper echelons of higher education. If we find signaling theory compelling, and I personally do, shouldn’t a society committed to equality of opportunity and social mobility seek to marginalize, rather than fetishize, the institutional power of these universities?

Somewhat more darkly, we should ask ourselves if our belief in the transformative power of education might not be the product of our collective willing ignorance—a noble lie we tell ourselves to avoid confronting problems to which we have few or no solutions. If pre-existing traits—innate intelligence, social connections, wealth, and others—most accurately explain one’s success, what of the increasingly selective institutions that facilitate their convergence?

Footnotes:

Though I’ve heard plenty of anecdotal claims to this effect (including from an admissions officer during a grad school interview), I don’t have any hard proof. If one of you knows of a such a study, point me in the right direction.
I just wanted to note that this feels very in line with the general trend of wealthier people having fewer children but spending an enormous amount of resources to give them even very marginal advantages.
This is when people respond to polls in the ways they think are more likely to be viewed favorably by others. Basically, people under-report bad behavior (maybe using drugs or committing crimes) and over-report good behavior (like voting).

A Glance at College Attainment in NYC

I’m taking a couple days off from work this week. Unfortunately, it’s raining, so I’m inside playing around with some county-level education data in R, and I thought I’d throw up a quick blog post. The data set, which goes back to the 1970s, comes courtesy of the USDA and can be found here.

A quirk of New York City is that each of the five boroughs is also its own county. I took the opportunity to make some graphs illustrating how educational attainment has changed in the city and its boroughs over the past 50 years. There are a few interesting insights to be had here:

New York City’s college attainment rate closely mimics the country’s. Since 1970, the percentage of residents over the age of 25 in both groups who have attended at least some college has risen from just over 20% to just under 60%.

But between the boroughs, there’s quite a bit of diversity. Manhattan is the only borough to have ever had a higher than city-average rate of college attainment. What’s more, the gap between the Manhattan and the New York City average has only grown over time. That said, because it started out with a higher rate of college-educated residents, Manhattan has experienced the lowest rate of growth in this area. Here’s each borough compared with the city’s average over the last 50 years:

Perhaps unsurprisingly, given its reputation as a hotbed of gentrification, Brooklyn leads the way in terms of educational growth among its residents. In 1970, Brooklyn and the Bronx had similar rates of residents with at least some college (12 and 13 percent, respectively), compared with a US average of 21.3%. By 2016, however, the gap between the former had widened to 10.5%. Brooklyn has surpassed Queens and is closing in on the NYC average.

A more detailed look at the change in educational attainment in Brooklyn, which now has slightly more residents with than without some college experience:

Is College Worth It?

It’s a query that would have been unthinkable a generation or two ago. College was once – and in fairness, to a large extent, still is – viewed as a path to the middle class and a cultural rite of passage. But those assumptions are, on many fronts, being challenged. Radical changes on the cost and benefit sides of the equation have thrown the once axiomatic value of higher education into question.

Let’s talk about money first. It’s no secret that the price of a degree has climbed rapidly in recent decades. Between 1985 and 2015, the average cost of attending a four-year institution increased by 120 percent, according to data compiled by the National Center for Education Statistics, putting it in the neighborhood of $25,000 per year – a figure pushing 40 percent of the median income.

That increase has left students taking more and bigger loans to pay for their educations. According to ValuePenguin, a company that helps consumers understand financial decisions, between 2004 and 2014, the amount of student loan borrowers and their average balance size increased by 90 percent and 80 percent, respectively. Among the under-thirty crowd, 53 percent with a bachelor’s degree or higher now report carrying student debt.

Then there’s time to consider. Optimistically, a bachelor’s degree can be obtained after four years of study. For the minority of students who manage this increasingly rare feat, that’s still a hefty investment: time spent on campus can’t be spent doing other things, like work, travel, or even just enjoying the twilight of youth.

And for all the money and time students are sinking into their post-secondary educations, it’s not exactly clear they’re getting a good deal – whether gauged by future earnings or the measurable acquisition of knowledge. Consider the former: While there is a well acknowledged “college wage premium,” the forces powering it are up for debate. A Pew Research Center report from 2014 shows the growing disparity to be less a product of the rising value of a college diploma than the cratering value of a high school diploma. The same report notes that while the percentage of degree-holders aged 25-32 has soared since the Silent Generation, median earnings for full-time workers of that cohort have more or less stagnated across the same time period.

Meanwhile, some economists contend that to whatever extent the wage premium exists, it’s impossible to attribute to college education itself. Since the people most likely to be successful are also the most likely to go to college, we can’t know to what extent a diploma is a cause or consequence of what made them successful.

In fact, some believe the real purpose of formal education isn’t so much to learn as to display to employers that a degree-holder possess the attributes that correlate with success, a process known as signalling. As George Mason Professor of Economics (and noted higher-ed skeptic) Bryan Caplan has pointed out, much of what students learn, when they learn anything, isn’t relevant to the real world. Professor Caplan thinks students are wise to the true value of a degree, which could explain why almost no student ever audits a class, why students spend about 14 hours a week studying, and why two-thirds of students fail to leave university proficient in reading.

Having spent the last 550-ish words bashing graduates and calling into question the legitimacy of the financial returns on a degree, you might fairly ask if I’m saying college really isn’t worth your time and money. While I’d love to end it here and now with a hot take like that, the truth is it’s a really complicated, personal question, and I can’t give a definitive answer. What I can offer are some prompts that might help someone considering college to make that choice for themself, based on things I wish I’d known before heading off to school.

College graduates fare better on average by many metrics. Even if costs of attendance are rising, they still have to be weighed against the potential benefits. Income, unemployment, retirement benefits, and health care: those with a degree really do fare better. Even if we can’t be sure of the direction or extent this relationship is causal, one could reasonably conclude the benefits are worth the uncertainty.
Credentialism might not be fair, but it’s real. Plenty of employers use education level as a proxy for job performance. If the signalling theory really is accurate, the students who pursue a degree without bogging themselves down with pointless knowledge are acting rationally. As Professor Caplan points out in what seems a protracted, nerdy online feud with Bloomberg View’s Noah Smith, the decision to attend school isn’t made in a cultural vacuum. Sometimes, there are real benefits to conformity – in this case, getting a prospective employer to give you a shot at an interview. Despite my having never worked as a sociologist (alas!), my degree has probably opened more than a few doors for me.
What and where you study are important. Some degrees have markedly higher returns than others, and if money is part of the consideration (and I hope it would be), students owe it to themselves to research this stuff beforehand.
For the love of god, if you’re taking loans, know how compound interest works. A younger, more ignorant version of myself once thought I could pay my loans off in a few years. How did I reach this improbable conclusion? I conveniently ignored the fact that interest on my loans would compound. Debt can be a real bummer. It can keep you tethered to things you might prefer to change, say a job or location, and it makes saving a challenge.
Relatedly, be familiar with the economic concept of opportunity cost. In short, this just means that time and money spent doing one thing can’t do something else. To calculate the “economic cost” of college, students have to include the money they could have made by working for those four years. If we conservatively put this number at $25,000 per year, that means they should add $100,000 in lost wages to the other costs of attending college (less if they work during the school year and summer).
Alternatives to the traditional four-year path are emerging. Online classes, some of which are offering credentials of their own, are gaining popularity. If they’re able to gain enough repute among employers and other institutions, they might be able to provide a cheaper alternative for credentialing the masses. Community colleges are also presenting themselves as a viable option for those looking to save money, an option increasingly popular among middle class families.

There’s certainly more to consider, but I think the most important thing is that prospective students take time to consider the decision and not simply take it on faith that higher education is the right move for everyone. After all, we’re talking about a huge investment of time and money.

A different version of this article was published on Merion West.

What’s Up with U.S. Public Education?

*I wrote this a while ago, but didn’t publish. I was on vacation–sue me. I know the internet has the attention span of a five-year-old, and people aren’t really talking about DeVos anymore, but I’m hoping this is still interesting to someone.

The confirmation of Betsy DeVos as Secretary of Education was perhaps the hardest-won victory of President Trump’s nascent administration. Opposition to the DeVos ran deep enough to require Vice President Pence to cast a historic tie-breaking vote.

To hear it from those on the Left, DeVos is uniquely unqualified for the position. Her lack of personal experience with the public school system, coupled with her one-sided approach to education and purported ignorance of education policy make her unsuited to the position, they argue.

On the Right, the response has been to call into question the political motivations behind opposition to DeVos. Teachers’ unions, after all, are some of the biggest spenders in U.S. politics and their economic interests are threatened by the kind of reforms DeVos’ appointment might foreshadow.

It’s hard to know if either or both sides are being overly cynical. I don’t pretend to have any deep knowledge of DeVos or her new mantle. But one thing seems empirically true: the status quo of public education isn’t above reproach.

More Money, Same (Math, Science, Literacy) Problems

According to data from the National Center for Education Statistics (NCES), per pupil spending on public education has increased roughly 1.7% annually since 1980. Student performance, however, has largely stagnated over the same period by various metrics. To somewhat immodestly quote myself:

The statistics are damning: Literacy rates among 17-year-old Americans peaked in 1971. Standardized testing reveals that math scores peaked in 1986. Test scores show a lack of improvement in math, science, and reading, in which respectively 25%, 22%, and 37% of American students are proficient.

This kind of stagnation isn’t typical among other nations; the United States showed much smaller levels of inter-generational improvement than other OECD nations. Up until about 1975, Americans were scoring significantly higher in math and literacy than Americans born before them. Since 1975, scores have plateaued, even adjusting for race and foreign-born status of students. As [Gallup’s] study states, this implicates the entire US school system.

Test scores aren’t the only indicators of educational dysfunction. Fully 60% of first-year college students need to take remedial courses in either math or English (to be fair, you might attribute this in part to college admission policies). Companies are also reporting longer vacancies for STEM positions and increasingly are forced to delay projects or look outside the U.S. for workers.

To be clear, it’s not that US public schools are producing particularly terrible outcomes (though they’re admittedly middling among the developed world). The real problem is spending on public education is becoming increasingly inefficient; we’re putting more and more resources into it and receiving little or no additional benefit. This is a long-term trend that should be addressed immediately to avoid throwing good money after bad.

In fairness, I have to point out that speaking of public schools in national terms risks obscuring that some public schools–usually found in high-income neighborhoods–perform incredibly well. However, unequal educational outcomes are often considered a bug, rather than a feature, of the public school system, which charter schools have in some cases been able to address with varying degrees of success (though there are charges that this is only possible because charters are given greater latitude in selecting their students).

The Status Quo Is Hard on Teachers, Too

There is a perception among some that public school teachers are profiting hand over fist as a result of teachers’ unions, to the expense of students. But the truth is a little more complicated.

On one hand, strong teachers’ unions have engendered some policies that arguably favor educators over students. Teacher firing rates, for example, are extremely low. This is especially true for tenured teachers, of which an average of 0.2 are dismissed per district for poor performance annually, according to the National Center for Education Statistics.

This is made possible (at least in part) by what effectively amounts to state-sanctioned local monopolies on education. Constraints on demand impede normal market mechanisms from weeding out inefficient suppliers (at least, that’s the theory embraced by school choice advocates). This isn’t illogical, and it explains the somewhat rare rift between black parents and the Democratic party line on school choice.

Consider a thought experiment: Imagine families were forced to shop for food only in their own neighborhoods. What might we expect to happen to the quality of food consumed by people in poor areas? What if we put limits on the amount of new stores that could open?

In this light, it might be accurate to say that policies that require students to attend schools in their district prioritize the school system over the scholars.

On the other hand, a lot of teachers are being harmed by the current system–particularly the young and good ones.

Under current agreements, teacher compensation rates are in large part determined by longevity, both within the profession and teaching district. Young teachers–especially women teaching young children–are often underpaid relative to other professions.

screen-shot-2017-02-15-at-1-43-59-pm — Source: No Recovery, Gallup 2016

Additionally, collective bargaining agreements have led to pay compression (a narrowing of the pay gap between high and low performers) among teachers, which penalizes high performing teachers and benefits low performing teachers. Correspondingly, there has been a detectable decline in standardized test scores of new teachers since the 1960s.¹

The combination of longevity-driven pay and salary compression has made teaching a less attractive profession for the best candidates, who can earn more in other comparable fields. A 2014 survey by the American Federation of Teachers revealed merely 15% of teachers report high levels of enthusiasm about their profession, despite 89% feeling highly enthusiastic at the beginning of their careers.

What might we say about an education system that grows increasingly expensive without improvement for students or teachers? We might say that it needs work and we should be open to new ideas, in whatever form they might come. It might also be wise to proceed with caution; for better or worse, this is the system we have right now.

I don’t know if Mrs. DeVos’ agenda will result in improvements. The divergent problems of climbing spending and poor teacher incentive could prove difficult to address simultaneously, especially in the current political climate. But we should all remember the true goal of an education system–public, private, or somewhere in between–is to efficiently increase human capital. How that happens should be of secondary concern.

The study I cited found these results to be true only among female teachers. For some reason, scores of incoming male teachers improved slightly over this period. If anyone has any theories as to why this might be, I’d love to hear them.

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