In his first major address to Congress, President Barack Obama set a goal for the United States to become (again) the nation with the highest percentage of college graduates.
The Lumina Foundation is supporting programs to achieve the goal of having 60 percent of Americans graduate from college.
The idea that politicians or supposed policy experts can know what the optimal percentage of college graduates should be is completely mistaken.
Education is, or at least ought to be, a human capital investment. Like other investments, only the individual can possibly judge how much education and what kind of education is best given his or her circumstances. It makes no more sense to set a national goal for college graduation than it would to set national goals for car ownership, or health club membership or newspaper subscriptions.
For the person who has a strong interest in pursuing advanced studies, college may be an ideal investment, even at the very high cost of many schools. For a person who has little academic ability or interests, even the least costly college program is a waste of time and money. Just like the decisions to buy a car, join a health club or subscribe to a newspaper, pursuing a college education is a decision that must be made by each individual and there is no ideal national percentage.
Unfortunately, politicians and policy wonks often believe they can improve upon the people’s voluntary choices. They claim that too few people will go to college unless they encourage them with various subsidies. They often say that higher levels of education (that is, seat time in formal education) leads to increased skills and productivity, which in turn makes the nation more prosperous. Therefore raising the percentage of people who go to college will always be beneficial.
That idea is erroneous. More seat time, credits and degrees do not automatically translate into more productive people.
Don’t take my word for it. I recommend reading the 2002 book by British education professor Alison Wolf, Does Education Matter? Myths about Education and Economic Growth. The American educational establishment ignores this book because it exposes the myths about education and economic growth that lie at the core of most colleges’ and universities’ value propositions, especially when the time comes to request additional funding, tax exemptions and tuition aid. Wolf shows that governments attempt to speed up economic progress by spending more on formal education that ends up squandering resources.
One example Wolf gives of a poor educational system is Egypt, which “invested” heavily in higher education. This did not lead to rising economic output because little of the students’ learning at their universities coordinated with the skills and knowledge needed for entrepreneurship and improving efficiency in the Egyptian economy. Instead, it created a group of people with university degrees who expected high-paying jobs that did not, and could not, exist.
Formal education does not necessarily lead to knowledge and skills the individual can use productively.
What was true in Egypt is equally true with many American college graduates. Hordes of academically weak and disengaged kids have been lured into college with the idea that getting a degree — any degree, anywhere — means they’ll enjoy a hefty gain in salary. Unfortunately, many of them coast through without adding anything to their human capital. They may have a degree, but that and $3 will be enough to buy yourself a coffee at Starbucks, where they’re likely to end up working.
The housing bubble was caused by a political decision that it would be good for the nation to have an increasing percentage of people owning their own homes. That idea led to tremendous waste of resources and terrible losses for people who would have been better off if they had not been drawn into borrowing for a house.
Similarly, politicians have been promoting the idea that the more Americans who graduate from college, the better off the nation will be – but that idea is just as flawed as the housing notion. It has given us a glut of young Americans in the labor force who have college credentials (if they even graduated), substantial debts (whether or not they graduated) and few marketable skills.
The British have experienced the same thing we have: lots of young workers with college degrees who work at jobs traditionally done by non-college people.
We should stop aiming at percentages of college graduates and leave the matter of human capital investment up to unsubsidized individual choice.
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