This paper argues that since the year 2000, the demand for "cognitive" jobs has declined and that because of that, value of education is declining. I have not gone through the paper fully, just the intoduction and conclusion (I always read scientific papers this way, it's easier to wrap my head around the data in the meat if I know what the authors are trying to prove/disprove), but it has a wonderful quote: "having a BA is less about obtaining access to high paying managerial and technology jobs and more about beating out less educated workers for the Barista or clerical job" http://www.nber.org/papers/w18901.pdf If this paper really holds to scrutiny, does it mean that college education should now be worth less, when measured as present value of future earnings? Could this be the turning point of the Great American Education Bubble?
College is all about meeting people and making connections. We'll even build a big house for you and your fraternity brothers that looks just like our house. Don't want you living in some apartment getting the wrong ideas. Save the math jobs for the guys who don't have much to offer.
Without even reading the article, I have to agree. Some jobs such a medicine, law, engineering, etc will still require higher forms of education, but I do wonder what percentage this represents of all the people who go post secondary route. With so many jobs also being replaced by skilled foreign workers that will work for much less, this is yet another nail in the coffin. I do believe that getting a BA these days is a risk. First you have to pick a degree that can absolutely lead to a high quality job. (ie. doctor, dentist, lawyer, engineer). But next you have to account for the risk of not being at the top of your class and of not going to the right school. Just because you have the degree doesn't mean you will get the next. Next of course are all those degrees that sound good, but don't exactly lead to a specific job, but might be necessary, simply to weed out other candidates. Lastly are those degrees that really don't have too much application in the real world, but at least show you've done something for a few years after highschool. Of course if you don't do any higher form of education, then your prospects are even more grim, but the thought that getting a degree these days and having a good life is a pipe dream. Perhaps in 10 or 20 years, it will be those kids without degrees, and hence no debt, but willing to work hard as a plumber or manual laborer that will come out on top.
You can make good money now as a skilled tradesman, a good electrician can easily make more than his BA accredited brethren at 23 or 24, especially when you normalize that salaried job to an hourly rate. The price you pay is more cyclical feast or famine environment, more manual labor, and topping out at a lower number unless your entrepreneurial in which case I know some electricians who make as much as me.
Supply and demand. In the 1960's it was still relatively uncommon to get a 4 year degree. Today anyone can get one and the market is flooded with MBA's and other graduate degrees. One of the reasons you need to adjust your PV lower is because so many people end up pursuing things in life unrelated to their degree. Some out of necessity, others by choice.
The argument in the article is that the phenomenon is demand-based. It's not that there are way more college grads now then in the 90's but that there are fewer "cognitive" jobs that demand a college education to be done. My personal explanation is that automatisation is making for leveraging productivity of the top graduates without enrolling the lower end crowd. In essence, we are moving towards "winner take all" effect in most cognitive specialties (trading included).
That also makes sense (I didn't read the article, ) Let's look at the NFL. Teams are willing to over pay for a good quarterback yet we are not seeing the same year over year rate of increases for lineman. The lower tiers are slowing grinding higher while the upper tiers are going parabolic. I think the labor market has figured its better to overpay a rare superstar and automate the redundant jobs in the lower tier or pay as little as possible. To be honest, the middle section of corporate america was full of fat that was asking to be trimmed. One could make an argument for actually paying more for the bottom and getting rid of middle management completely.
Yes, indeed. There are two interesting implications to this - first is that income inequality is going up even further and second is that educational infrastructure is kind-of obsolete. Yeah, makes sense. To tell you a secret, I had to look that up (actually, I think after 30 years in this country I should know things like these). I think a lot of those jobs are becoming more leveraged too. For example, a buddy of mind was telling me that radiology is already being increasingly outsourced and will eventually be replaced by image recognition technology. I can only imagine what computer technologies have done to the legal profession where most of the grunt work is searching for precedents, preparing documents and such. I honestly think that both outsourcing and foreign labour are not the threats to worry about. Mid-level while collar jobs are just as threatened by automation as the blue collar jobs such as manufacturing.
This isn't really surprising. It would have happened even without "fewer cognitive" jobs. You subsidize something, you get more of it. In this case college graduates.
I guess college grads are good business for banks, since auto and home loans can be had for a mere pittance now. So if there are fewer cognitive jobs then are people going to become even stupider? I did not think it was possible.