By Derek Newton
Reposted from Forbes, with permission.
Get a college degree.
Sure, you’ll be bombarded with messages saying college costs too much. It doesn’t. Or that the cost of going to college is growing too fast. It’s actually not. Or that student debt is crippling. Nope. Or that a college degree doesn’t have value anymore. Rubbish.
Ignore every bit of that and go to college. Send your kids. Finish.
On every conceivable metric, examining every possible return, a college education is almost certain to be the best investment you’ll ever make. Looking only at finances, which is a flat and cold way to analyze college, people who earn a four year college degree make considerably more money than those who don’t have one — nearly a million dollars more over their earning lives on average.
That financial case for college isn’t really in debate.
But in the event anyone has lingering doubts, there’s a new working paper published by the National Bureau of Economic Research from scholars at Harvard, the University of Michigan and at a non-profit with a mission of increasing opportunities for those without college degrees. The primary focus of the new research is on the “opportunity gap” that exists between those two groups of workers – those with a bachelor’s degree and those without.
It finds that people in both groups have little trouble moving between and among jobs where the skill requirements are relatively equal from one job to another – if you’re a welder or an accountant, it’s not too hard to find a job doing the same thing somewhere else. But if you want to move into a job that requires a different skill, something you may not have done before, a position that pays more and comes with better benefits, that kind of upward mobility usually requires a college degree. Or rather, you’re far more likely to be able to make that kind of upward jump if you have one.
From the report, “workers with bachelor’s degrees have dramatically better access to higher-wage occupations.” Note that stale researchers scribbling notes about employment and wage data going back 50 years used the words “dramatically better.”
If you knew nothing else about the college proposition, that proven ability for upward mobility may clinch it for you. But that’s not the only data in the new report that jumps out. For the good of everyone, the report’s authors highlight a few other compelling data.
Here is a stunner. The research says, “it is only at age 55, when [those without a four year degree] already have 30 years of labor market experience, that they earn as much as their peers with college degrees did at age 25.”
In other words, if you try to make it without a degree, you’ll work for an average of 30 years before you earn as much as someone does on their first day out of college.
And here’s another interesting factoid from the new paper – the wage and upward mobility opportunities that come with a four year degree don’t appear, the authors say, to be tied to what someone learns in college. Instead, those rewards appear to be tied more directly to simply having completed the degree. This is to say that those who hire people for good jobs simply prefer hiring people with college degrees.
The paper says, “the [degree versus non-degree] opportunity gap appears to be the result of an intrinsic preference for the bachelor’s degree credential itself by employers.”
Let’s keep going. The report also says, “Whereas fewer than 40% of Americans currently have college degrees, 70% of new jobs created since the 2008 recession were in occupations that typically require a bachelor’s degree.”
And, “A majority of surveyed employers from industries as varied as health care, manufacturing, and retail acknowledge that they filter out qualified applicants who have the skills and work experience to be successful in jobs when they do not meet the four-year degree requirement.” That’s a tricky sentence to parse. But it says that companies ignore – filter out – applications from people without college degrees even if they have the “skills and work experience” to the job well.
These facts do put inappropriate and probably unsustainable pressure on colleges, incentivizing the commercialization and transactional nature of degree attainment. That is to say that if all people care about is having the degree, where you get it and how you get it don’t really matter. That’s not true at all and is the top reason no one should ever measure the value of college simply by career and labor market outcomes.
But if you do, if you wanted to, the information is equally clear and compelling. Go to college. Get the degree.