Going to university is more important than ever for young people. But
the financial returns are falling.


88bf必发娱乐官网登入，IN A classroom in Seoul a throng of teenagers sit hunched over their
desks. In total silence, they flick through a past exam paper. Stacks of
brightly coloured textbooks are close to hand. Study begins at 8am and
ends at 4.30pm, but some will not go home until 10pm. Like hundreds of
thousands of South Koreans, they are preparing for the suneung, the
multiple-choice test that will largely determine whether they go to a
good university or a bad one, or to university at all.


Over the course of a single generation in South Korea, degrees have
become close to ubiquitous. Seventy per cent of pupils who graduate from
the country’s secondary schools now go straight to university, and a
similar share of 25- to 34-year-olds hold degrees, up from 37% in 2000.
Students scramble to gain admittance to the most prestigious
institutions, with exam preparation starting ever younger. Soughtafter
private nurseries in Seoul have long waiting lists.


South Korea is an extreme case. But other countries, too, have seen a
big rise in the share of young people with degrees. In the OECD club of
35 countries, 43% of 25- to 34-year-olds now have degrees. In America
the figure is 48%.


Between 1995 and 2014 government spending on higher education in the
OECD rose from 0.9% of GDP to 1.1%, while private spending rose from
1.2% to 1.5%. As government subsidies for tuition fees flow through to
institutions they have helped inflate costs. Since 1990 fees for
American students who do not get scholarships or bursaries have risen
twice as fast as overall inflation.

政策制定者理所当然的认为，让更加多的子弟上海高校学能激起经济进步，促进社会流动。那种守旧直观上很吸引人。受过卓绝教育的人当然更有不小可能率出现进步生产力的革新成果，科技(science and technology)提升也对工作建议了新须要，更几人供给更加好的教育看起来是有说服力的，而收获学位，是贫困家庭出身的智慧孩子注脚本身能力的1种大庭广众途径。

Policymakers regard it as obvious that sending more young people to
university will boost economic growth and social mobility. Both notions
are intuitively appealing. Better-educated people should surely be more
likely to come up with productivity-boosting innovations. As
technological change makes new demands of workers, it seems plausible
that more will need to be well-educated. And a degree is an obvious way
for bright youngsters from poor families to prove their abilities.


But comparisons between countries provide little evidence of these
links. Richer countries have more graduates, but that could be because
there is more money to spare, and less urgency to start earning. Rich
economies grow more slowly, but that is probably because they have fewer
easy ways to raise productivity, not because education depresses their


A truth universities acknowledged


The main piece of evidence cited by policymakers is the “graduate
premium”—the difference between the average earnings of someone with a
degree and someone with no more than a secondary-school education, after
accounting for fees and the income forgone while studying. This gap is
often expressed as the “return on investment”in higher education, or the
annualised boost to lifetime earnings from gaining a degree. Research by
the New York Federal Reserve shows that the return on investment in
higher education soared between 1980 and 2000 in America, before
levelling off at around 15% a year.  In other words, an investment equal
to the cost of tuition and earnings forgone while studying would have to
earn 15% annual interest before it matched the average value over a
working life of gaining a degree.

世界银行对一四二13个经济体的回报率进行了估量，尽管各种地点各不一样，但数值都很可观。文学家对数码解析发现，回报率与有学位的人占比以及收入范围关于。大不列颠及北爱尔兰联合王国、德意志联邦共和国和美利坚独资国的回报率周边，在撒哈拉以南非共和国（The Republic of South Africa）洲地区回报率在贰一%左右，那里大学生缺少，教育程度低的老工人收入很少。在斯堪的纳维亚，收入相对均等，陆分之二的成年人有学位，回报率在九%左右。

The World Bank has produced estimates of this return for 139 economies.
It varies from place to place, but is substantial everywhere. The
Economist’s analysis of the data finds that returns are linked to the
share of people with degrees, and the range of earnings. Returns in
Britain and Germany are similar to those in America.In sub-Saharan
Africa, where degrees are scarce and the least-educated workers earn
little, they are around 21% a year. In Scandinavia, where wages are less
unequal and two-fifths of adults have degrees, they are around 9%.


But as a guide to school-leavers considering going to university—and to
policymakers considering expanding access to higher education—the
graduate premium is flawed. Even within countries the average conceals
wide differences. Most students know that a degree in mathematics or
finance is likely to be more lucrative than one in music or social work.
What fewer realise is that the graduate premium overstates the financial
benefit of embarking on a degree if their school grades barely qualify
them for entry, no matter what they study.


In a comparison of the earnings of people with degrees and people
without them, those who start university but do not finish are lumped in
with those who never started, even though they, too, will have paid fees
and missed out on earnings. Their numbers are considerable. In America
40% of college students fail to graduate with four-year degrees within
six years of enrolling. Drop-out rates across the developed world
average around 30%. It is the students admitted with the lowest grades
who are least likely to graduate.


Including dropouts when calculating the returns to going to university
makes a big difference. In a new book, “The Case Against Education”,
Bryan Caplan of George Mason University argues that the low graduation
rates of marginal students, and the fact that, for a given level of
qualification, cleverer people tend to earn more, mean that the return
on a four-year degree in America ranges from 6.5% for excellent students
to just 1% for the weakest ones.


Part of that difference is because the weakest students attend the worst
universities, where drop-out rates are highest. When they make it into
better institutions, the returns may be higher. In a study published in
2014 Seth Zimmerman of the University of Chicago compared the earnings
of school-leavers in Florida whose grades were close to the minimum for
admission to a good state university. Those just above the cut-off were
much more likely than those just below to start courses in good
institutions. They graduated at a rate similar to that of the broader
student population. They went on to earn considerably more than those
just below the cut-off, and their return on investment was substantial.


注：依据维基百科，“positional good”are goods valued only by how they are
distributed among the population, not by how many goods there are in

Overstating the graduate premium is not the only reason policymakers
overestimate the wider benefits of increasing the share of young people
who go to university. The usual way to calculate the social returns of
higher education is to sum up all the graduate premiums and subtract any
public subsidies. But degrees are in part a way to access a “positional
good” that benefits one person at the expense of another. Part of the
premium comes from gaining an advantage over others in the competition
for a good job, rather than the acquisition of productivity-boosting
skills and knowledge. A complete calculation would include not just
gains to graduates, but losses to non-graduates.


Degrees are also signalling devices. The premium includes the
income-boosting effects of personal characteristics that are more likely
to be held by those with degrees, not because they acquired them at
university, but because they possessed them on admission.


As degrees have become more common,their importance as signalling
devices is rising. Recruiters, who pay none of the cost of jobseekers’
higher education, are increasingly able to demand degrees in order to
screen out the least motivated or competent. A recent study by Joseph
Fuller and Manjari Raman of Harvard Business School found that companies
routinely require applicants to have degrees, even though only a
minority of those already working in the role have them. This increases
the graduate premium—but by punishing non-graduates rather than boosting
the absolute returns to degrees.


Analysis by The Economist of American census data finds that between
1970 and 2015 the share of workers aged 25-64 with at least a bachelor’s
degree increased in 256 out of 265 occupations. Some of these are
intellectually demanding jobs that changed a lot over that period, such
as aerospace engineer or statistician. Others are non-graduate jobs such
as waiting tables. Sixteen percent of waiters now have
degrees—presumably, in most cases, because they could not find a
graduate job. But other jobs that are mostly done by graduates, such as
journalism, nursing and teaching in primary schools, used to require
only shorter training, often received while working. Today, having a
degree is usually an entry requirement.


The Economist has produced a measureof over-education by defining a
graduate job as one which was staffed mostly by degree-holders in 1970.
We find that just 35% of graduates work in such occupations today, down
from 51% 45 years ago. Judging by job titles alone, 26.5m workers in
America—two-thirds of those with degrees—are doing work that was mostly
done by nongraduates a half-century ago.


That calculation exaggerates the trend. Advances in technology have
doubtless made some of these jobs more demanding. But not all of them,
at least judging by pay. We find only a weak link between higher shares
of graduates in an occupation and higher salaries. For around half of
the occupations that employ higher shares of graduates now than a
half-century ago, real wages have fallen.


Andreas Schleicher, the head of education research at the OECD, reckons
that “countries have skills shortages, not degree shortages”. The way
universities have come to monopolise higher education, he says, is a
problem in part because universities do not suit all kinds of learners.
And university dropouts tend to see little in the way of financial
benefit from the part of their course that they have finished.


One promising development is that of“micro-credentials” or
“nano-degrees”—short vocational courses, often in computing and IT.
Udacity, an online education company, offers a variety, including one in
self-driving cars approved by Uber and Mercedes-Benz, and another on
digital marketing approved by Facebook and Google. EdX, a collaboration
between MIT, Harvard and other leading universities, offers similar
courses free. Students can take exams to prove their mastery of the
material for a few hundred dollars.


Boot campus


For now, such courses are mostly add-onsto degrees, rather than
replacements. Three-quarters of edX’s students already had a bachelor’s
degree upon enrolling.But the collaboration with sought-after employers
makes it more plausible that they could eventually become establishedas
a stand-alone testament to a job applicant’s worth.


In the meantime the decision not to goto university remains risky, even
though many graduates will end up doing work that used to be done by
non-graduates—or struggle to find a job at all. Around half of
unemployed South Koreans now have degrees. For them, the very concept of
a “graduate premium” may seem a mockery. Kim Hyang Suk, a recruiter in
South Korea, says that half the applicants for customer service jobs at
her firm are graduates, even though only a secondary-school education is

Kim Hyang

She would prefer school-leavers with experience, says Ms Kim, to
inexperienced graduates whom she will have to train. She is not looking
for swots, but people who are “engaging, good on the phone”. But when
few employers are this open-minded, most young people will want a
degree. It may not boost their earnings as much as they had hoped, but
without one, they will probably fare even worse.



