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Comment by dahart | Hacker News Reader

> Working as a plumber, an electrician, or a carpenter can be quite lucrative

This narrative about wealthy trades people like plumbers and welders is not well supported by any data. The ones who do well are the ones who start businesses and hire people, so they become business owners, but most trades people don’t end up there and they obviously can’t all do it.

You should know that the U.S. Fed (St. Louis) published stats on higher education which shows that on average a 4 year degree doubles your income vs anything less. A graduate degree triples it. When I read that, I was blown away that the difference is that high on average. I would have thought maybe 10%, but double the earnings on average for all degree earners is so huge it’s something you can’t ignore.

https://research.stlouisfed.org/publications/page1-econ/2018...

https://www.theatlantic.com/education/archive/2019/09/weldin...

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> on average a 4 year degree doubles your income vs anything less

The data suggests that people who hold a 4-year degree have X ratio of income. That's two things: the people and the degree, not just the degree.

From a previous study, a related (but inexact) surprising outcome emerged: After adjusting for applicant scholastic aptitude, the additional benefit from attending an elite school is “generally indistinguishable from zero.” Excerpt from article*: In November 2002, the Quarterly Journal of Economics published a landmark paper** by the economists Stacy Dale and Alan Krueger that reached a startling conclusion. For most students, the salary boost from going to a super-selective school is “generally indistinguishable from zero” after adjusting for student characteristics, such as test scores. In other words, if Mike and Drew have the same SAT scores and apply to the same colleges, but Mike gets into Harvard and Drew doesn’t, they can still expect to earn the same income throughout their careers. Despite Harvard’s international fame and energetic alumni outreach, somebody like Mike would not experience an observable “Harvard effect.” Dale and Krueger even found that the average SAT scores of all the schools a student applies to is a more powerful predictor of success than the school that student actually attends.

* - https://www.theatlantic.com/ideas/archive/2018/12/does-it-ma...

** - https://www.nber.org/papers/w7322

> That's two things: the people and the degree, not just the degree.

Yes, true, it’s a valid point, but there’s really no debate over whether getting the degree is causal. And side note, the Fed’s data is for all Americans, not just a suggestive sample. The line between holding a degree and not is surprisingly clear. All the debate is over what the cause actually is. Specifically, to what degree the content of the education is responsible for better earnings vs whether simply holding a certificate, but not necessarily learning anything or gaining skills, is the reason for higher income. And I’m no expert here, I’ve only browsed a handful of them, but my understanding is that they more or less all conclude it’s a mixture.

And yes, selectivity of school has less effect than selective schools might have you believe, at the same time that just having a degree from a state university has more effect than some people suggest.

> there’s really no debate over whether getting the degree is causal

Is there no debate in the sense of "this is completely settled science that getting a degree causes a doubling of income on an aptitude-independent, statistically-sound, population-wide basis"? Or "it's not being debated because that debate is uncomfortable"? Or in some other sense of that phrase?

Your question is getting at the reasons for causality, and not necessarily whether there is a causality. The answer of course is complicated, in that school aptitude depends on family history of education and socio-economic status, and a wide variety of other factors. As far as I can tell, it is clear and widely agreed that just having a degree provides some degree of earnings benefits regardless of aptitude or history or social class (for reasons of selection and social signaling and other things). And there also seems to be widespread agreement that getting the degree yields skills that also translate into some degree of earnings benefits, statistically. Studies are trying to control for aptitude and measure how much education alone contributes -- and it’s not 100%. But nobody is arguing about whether having the degree puts one in the higher earnings camp.

My main point is: Observing a difference in income in the presence of a degree is evidence of correlation, but not of causation.

And mine is that the existence of causation has been established. The debate amongst researchers is over the weights of various causes, not whether it’s just a correlation.

Do you have any research you can point me to? I'd like to learn more about this proof of causality in doubling (genuinely).

One is the St Louis Fed study, which I found you and I have discussed briefly in the past. ;) https://www.stlouisfed.org/~/media/files/pdfs/hfs/is-college...

I’m only skimming quickly, this doesn’t fully back me up, but section III talks about some causal analysis, for example: “mediation tests causal relationships between variables. While the SCF is not longitudinal and thus a pure causal effect cannot be tested, we can be confident that reverse causality in the ordering of these variables is not possible.”

I have to be fair and note that there are also several comments about what is not causal as well as data that implies more causation than what their analysis reveals.

The references in this paper point to a couple of other papers that have “causal” in the title. Unfortunately I don’t have the time right now to read these again, but I recall seeing causal analysis during that previous discussion about the St. Louis Fed study, research that studied education outcomes and controlled for people with similar SES backgrounds, similar family history of education, etc., and found the apparent causal contributions of education.

BTW, there is absolutely a fuzzy gray line here. What I’m calling causation (social bias) may be what you’re calling correlation (education alone is not the entire causal reason for higher incomes - to your point that one cause is the people). Lest we get too stuck on terminology, I’m perfectly happy pointing out that the correlation is extremely high, and the statistical difference between with degree and without degree is surprisingly large.

Thanks. I will take a deeper look at the aspects of the Fed data which tend to indicate causality. There's zero question and I'm in complete agreement that the correlation between degree and income is extremely high.

For me, the key question here is where does "lots more people should attend four-year university" fall on the spectrum between "people should eat healthy food, exercise more, and refrain from smoking because the data shows that people who do that are healthier and live longer" (IMO causal for health) and "people should fly first-class because the data shows that people who do that are wealthier"? I suspect that college is at least 75% in the latter category. If it's 75% in the former, we should push for it. If it's 75% in the latter, maybe we shouldn't.

(I also could be unduly influenced by the SWE field wherein the same intelligent, qualified person who did or didn't attend college would still have very similar [excellent] career prospects with or without a framed piece of paper. In medicine and law, it's more causal.)

Yeah, totally, it’s a reasonable question and not necessarily clear, especially when there are political voices in this arena distributing some degree of misinformation.

Even though that older Fed article is warning that for some people the “wealth premium” of a college degree is waning, it does talk about the stability and causation of the “income premium” that people with degrees enjoy, and since some of the reasons identified for the income premium have to do with social signaling and employer selection bias (as in, many high paying jobs require a degree in the first place), I believe it lands much more closely to the causal eat healthy for a longer life correlation. The more recent Fed link I posted above agrees in the sense that they’ve concluded after many studies on this subject that taking loans in order to go to school is absolutely worth the cost, that the financial returns are very very likely to pay off. At least for now...

Have you seen any studies on it being a causal relationship between the education and the income doubling? Ie i'm curious if the people who complete a graduate are also inherently more likely to have higher earnings.

I'm in full support of education, so this isn't a backhanded reason to argue against education. The disclaimer seems necessary these days :(

Yes, there are such studies, quite a few IIRC (there have been some deep threads on this topic here on HN before, I’ll see if I can dig any up), and there definitely is some component of education providing higher earnings purely due to employer selection, and/or social selection & bias. So earnings are a mix of the education and skills learned, and of the social signaling that the certificate provides, plus other causes. I’m also in full support of education, but you’re right the disclaimer is absolutely necessary, and there are some components of misleading social narrative surrounding education, just like there are surrounding social mobility.

I think using the average wages is a bit unhelpful for an individual debating between going to college and going to a trade school. They should just compare the specific career paths they’re interested in. And not just wages, job availability is also crucially important. The earnings potential of a vocational school may not have a huge high end, but there are more than a couple college degrees programs with very little job prospects.

By all means, education is great, and people should seek knowledge even when it isn’t profitable. But let’s stop telling white lies to high school seniors about the disconnect between the goals of academics and the realities of the job market.

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