College for All Some How Many?

I spent yesterday morning participating in a panel discussion (video here) at the Center for American Progress, responding to a couple of new papers they've commissioned about higher educaiton. The first, by Sara Goldrick-Rab and Josipa Roksa, makes a comprehensive case for expanding the federal higher education agenda beyond the current monolithic focus on student financial aid. The paper is very good. As I told the audience, if you're a Hill staffer, journalist, think tank person, whomever, you could pretty much just stick this paper in your desk drawer and fake your way as a higher education policy expert for months if not years by periodicially referring to its analysis of how things are and recommendations for how they should change.

The second paper, by MIT economist Paul Osterman, is titled College for All? The Labor Market for College-Educated Workers. (Matt Yglesias weighs on this at his new CAP address here). It's also well worth reading. My biggest quibble is actually with the title. This question comes up often, sometimes slightly rephrased as "Is College for Everyone?" or "Should Everyone Go to College?," and it's a silly formulation because the answer is, obviously, no. If you put it this way, people immediately think of their idiot third cousin or that guy from high school who liked to drink grain alcohol and tie M-80s to the backs of squirrels, and they rightly say "Of course not, and anyone who thinks otherwise is being utopian and dumb."

The real question (and the one Osterman actually addresses) is how many people should go to college, and is that number, compared to current college-going and degree completion rates, too small, too large, or about right? Osterman frames the discussion around the college wage premium (the average difference between wages for people who have college degrees and those who don't). This number has been bubbling up with increasing frequency in policy debates, because it hasn't changed much over the last seven years. That's a break with historical trends; from the early 1970s to 2000, the premium grew steadily and substantially, particularly for people with advanced (post-baccalaureate) degrees.

The flate wage premium is being used as evidence in some very significant intra-progressive policy debates. As economist Tony Carnevale put it (he was the other respondent on the panel, societies provide citizens with economic security in three basic ways. One is by the government owning and/or taxing the hell out of production and using those resources to provide cradle-to-grave income and services. The second is making employment the focus of security through strong labor arrangements i.e. unions and guilds. The third is by subsidizing education and credentialling so citizens can earn enough money to take care of themselves. Most societies have some combination of these; the decision is which to emphasize and to what degree.

Historically the United States has bet on door #3, education. And as the wage premium steadily increased even as more students went to college--as the price of college-educated labor rose even as the supply rose too--this looked like a good choice. The stagnant wage premium is causing some people to suggest that this strategy has run its course, the economy has absorbed all the college-educated workers it can, and that the credentialism inherent to degree-granting is actually hurting less educated workers. Since socialism doesn't seem like a realistic option, we therefore need to shift our policy priorities toward more robust labor-focused reforms.

Osterman doesn't take a position on this debate per se, but he does conclude that there are plenty of good reasons to continue investing in more higher education attainment, both from a societal cost/benefit standpoint and for individual students in terms of expected economic returns (as well as not-insubstantial non-economic benefits), for themselves and their children. Carnevale concurred. (He thinks the evidence is even stronger than Osterman allows.)

To be clear, this isn't an argument against supporting organized labor. As Larry Mishel and Richard Rothstein said, "Hotel jobs that pay $20 an hour, with health and pension benefits (rather than $10 an hour without benefits), typically do so because of union organization, not because maids earned bachelor's degrees." But it does mean that progressives shouldn't get caught in a false choice between more, better education and more, better jobs.