Is College Still Worth It? The New Calculus of Falling Returns [pdf] • Hacker News Board

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#121

Post by dahart » Sat, Dec 28, 2019, 5:49 AM UTC

> we find that controlling for the education of one’s parents reduces our estimates of college and postgraduate income and wealth premiums by 8 to 18 percent. Controlling also for measures of a respondent’s financial acumen—which may be partly innate—, our estimates of the value added by college and a postgraduate degree fall by 30 to 60 percent. Taken together, our results suggest that college and post-graduate education may be failing some recent graduates as a financial investment

There is no doubt in my mind that someone’s parents’ status and education, and someone’s financial acumen, are both leading to higher incomes and wealth.

Why does it make sense to “control” for these things? Doesn’t this lead to a distorted view, where large real differences in income between two people are factored away?

Sure, financial acumen might be partly innate, or correlated with IQ or family status, but some people surely gain financial acumen precisely by going to college? Sure, parent’s education is a great predictor or ‘own education’, but does that really imply the alternative- that when the professor’s kid is a high school dropout that the kid is better off than other dropouts? Is that supported by the data? Maybe yes, because daddy prof has more money to support his kid, but what happens with the dropout’s kids and future generations?

I’m not arguing that the premium isn’t going down, it’s true that tuition is out of control, but I’m not sure I understand how the methodology here isn’t painting a starker picture than reality. Discounting 50% for ‘acumen’ is a huge influence on the numbers, and when you don’t discount for parents and acumen, the reality is that people with college degrees are earning a lot more actual money.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#122

Post by djrobstep » Sat, Dec 28, 2019, 5:49 AM UTC

philwelch wrote: post #111

djrobstep wrote: post #69

Earlier quoted context omitted.

The rent thing is a bad argument against UBI, because you can make the same argument about any program that benefits the poor - even if all the UBI money goes back into rent, UBI would equalise housing spend along the way, from rich to poor and from worker to non-worker, vastly reducing poverty. Even for people not in poverty it would help even out their income over their life cycle - more money when they have kids,…

> even if all the UBI money goes back into rent, UBI would equalise housing spend along the way, from rich to poor and from worker to non-worker, vastly reducing poverty How would that be? If your rent goes up $1000 regardless of what you're paying now, someone who earns $0 and can't afford a $600 apartment now collects $1000 and can't afford a $1600 apartment while the guy who could afford the $600 apartment by earn…

For the poor person on $0, they can now afford to share a place or be less stress on their family financially.

For the person on the margin of affordability they can now afford an apartment.

Those on the highest incomes don't gain in a raw sense because they pay in more than they get, but still benefit from income smoothing.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#123

Post by dahart » Sat, Dec 28, 2019, 5:57 AM UTC

cm2012 wrote: post #119

dahart wrote: post #114

Earlier quoted context omitted.

IQ correllates somewhat with income and even more with school performance, so by “controlling for IQ”, the authors are intentionally flattening and hiding some of the income variation. They’re effectively discounting for the probability of going to college in the first place. That will, of course, hide differences in income due to going to college. The actual data shown in that reference seems to tell a different sto…

They account for that plus a lot of other factors in the 100k number. Basically the conclusion is, for people born from 1920 to 1980, college was net value add accounting for everything else, but not a huge one.

Yes, I know they account for that. Why does that make sense to account for IQ? That is explicitly discounting for college!

The 100k number is a fictional number, it’s trying to answer the question of assuming the same person didn’t go to college, is it possible to calculate the true value of college.

We could argue whether they actually calculated that number correctly, but what is absolutely true -- my point -- is that the actual people who had actual degrees actually earned a lot more than 100k extra over their lives, on average. The differences in wealth, illustrated by the data in that paper (see figure 1), are 2x-3x in annual income and accumulated savings much higher than 100k.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#124

Post by cm2012 » Sat, Dec 28, 2019, 6:00 AM UTC

dahart wrote: post #123

cm2012 wrote: post #119

Earlier quoted context omitted.

They account for that plus a lot of other factors in the 100k number. Basically the conclusion is, for people born from 1920 to 1980, college was net value add accounting for everything else, but not a huge one.

Yes, I know they account for that. Why does that make sense to account for IQ? That is explicitly discounting for college! The 100k number is a fictional number, it’s trying to answer the question of assuming the same person didn’t go to college, is it possible to calculate the true value of college. We could argue whether they actually calculated that number correctly, but what is absolutely true -- my point -- is t…

Yeah, but those people could have earned that much without going to college. If you just take the correlation between college and income, all it tells you is that colleges skim the top percent of society, which we knew already. The question we're trying to answer is that if you have the choice to go to college or not, should you?

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#125

Post by te_chris » Sat, Dec 28, 2019, 6:14 AM UTC

soperj wrote: post #104

seem_2211 wrote: post #12

I have a degree from a no-name university in New Zealand. I'd do it again for a few pragmatic reasons. 1: Lots of companies will reject you on sight without a degree. I don't think it's a good thing, but it is reality. 2: With a degree your ability to move overseas dramatically improves. I moved to America after graduating. I flat out couldn't have done that without a degree. Points based systems immigration systems…

What are you talking about? Otago is what dreams are made of!

Otaaaaaaaagoooooo! Wouldn’t change it for the world.

Local undergrad is way more sensible. If you want to be elite, kill it locally then do a masters at Oxbridge or whatever.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#126

Post by smnrchrds » Sat, Dec 28, 2019, 6:18 AM UTC

PaulDavisThe1st wrote: post #81

Hint to paper writers: you can put your figures inline instead of all at the end. What a dismal reading experience, skimming from pages of text to the end to see what the cited figure(s) actually show, then back to the text again. Who sanctions this sort of thing?

For digital publishing, sure. In academic publishing, for print, or if the same file is used for both digital and print copies, colour pages are often clustered together to reduce the production cost. If you have 20 pages of mostly black and white text each with a small colour figure, you have to print 20 colour pages. If you cluster them together, you can print 18 black and white pages and 2 colour pages instead.

This practice will go away as all publishing moves to digital formats. But as long as there is a print version for purchase as well, it will be more cost-efficient to organize papers like this.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#127

Post by dahart » Sat, Dec 28, 2019, 6:22 AM UTC

cm2012 wrote: post #124

dahart wrote: post #123

Earlier quoted context omitted.

Yes, I know they account for that. Why does that make sense to account for IQ? That is explicitly discounting for college! The 100k number is a fictional number, it’s trying to answer the question of assuming the same person didn’t go to college, is it possible to calculate the true value of college. We could argue whether they actually calculated that number correctly, but what is absolutely true -- my point -- is t…

Yeah, but those people could have earned that much without going to college. If you just take the correlation between college and income, all it tells you is that colleges skim the top percent of society, which we knew already. The question we're trying to answer is that if you have the choice to go to college or not, should you?

I believe I understand the question & goal, and maybe this is the right way to go about it, but I’m not sure. It somewhat strikes me as the wrong question -- people don’t choose college equally at all income & IQ levels, and some of the factors that (statistically) lead people into to choosing to go are already accumulating before they’re even born. As a result, the hypothetical solution that hides the factors that lead to that choice in the first place in the data might not be fairly or adequately answering the question of whether someone should invest in college, given the choice, right?

Under this model, you could have someone with a higher IQ and a degree earning more money than a non-degree holder, but have a ‘negative’ return. Does that accurately reflect the situation, should the advice be to skip college, even though the absolute financial returns might be positive?

And what does this answer tell someone who has a low IQ or a low socioeconomic status? How should they try to evaluate this choice? Does discounting high IQ and high family education give an accurate picture of the benefits of post-secondary education to poorer families?

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#128

Post by cipher_system » Sat, Dec 28, 2019, 6:30 AM UTC

amiga_500 wrote: post #51

seem_2211 wrote: post #44

Earlier quoted context omitted.

I went to university in a country with a Gini coefficient of .35, and now live in a country with a Gini coefficient of .39 (See OECD link below) The funny thing is, my student loan is one of the highest out of my American friend group† (although very normal amongst my NZ peers). Unlike the US, there was a lot less much in the way of financial aid/scholarships available, so sticker price was what people actually paid.…

Interesting. I knew NZ was pretty messed up but I didn't realise it was that bad. The friend bit is anecdata. Looks like NZ avg debt is $28k NZD [1] USA is $29 USD [2] So USA is 50% more expensive, on avg (NZDUSD 1.5). IMHO both are a disgrace, but that's another thing. 1: https://en.wikipedia.org/wiki/Student_loans_in_New_Zealand#S... 2: https://studentloanhero.com/student-loan-debt-statistics/

$29k is not that much is it? That is about what I ended up with for my degree in Sweden where higher education is free but you borrow for living expenses. I repay it with about $100 per month for 25 years.

Perhaps the biggest difference is the interest rate which is government backed and around maybe 1-2%. According to first result on Google the interest rates on US student loans seems to be around 6-8%.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#129

Post by burfog » Sat, Dec 28, 2019, 6:31 AM UTC

philwelch wrote: post #108

monoideism wrote: post #45

Earlier quoted context omitted.

I agree that a significant LVT would be extremely welcome. Perhaps even more so than UBI. I'm open to suggestions, but we've passed the point we were in from 1950 to 2000 where any mediocre person could work hard and be guaranteed a middle-class life. And that's wrong, not to mention very threatening to our democracy.

I'm sure that by some economic measurement, any mediocre person today could still work hard and earn enough to afford the same standard of living as the middle class of 1950. The main problem is that this isn't actually possible to pull off, since it costs 10x as much for things like housing and medicine that aren't necessarily 10x better. There just isn't the option to buy the crappy version from 70 years ago.

Medicine from 70 years ago can be superior to modern medicine. Which would you prefer if you couldn't breathe on your own, an iron lung or a tube jammed down your throat?

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#130

Post by jhoechtl » Sat, Dec 28, 2019, 6:31 AM UTC

seem_2211 wrote: post #12

I have a degree from a no-name university in New Zealand. I'd do it again for a few pragmatic reasons. 1: Lots of companies will reject you on sight without a degree. I don't think it's a good thing, but it is reality. 2: With a degree your ability to move overseas dramatically improves. I moved to America after graduating. I flat out couldn't have done that without a degree. Points based systems immigration systems…

What you are portraing is your exploitation of your countries education system for your own benefit. The NZ tax payer invested in yours for your future ROI into NZ and you put this ROI in your sack.