Education pays ...
bls.gov
bls.gov
All together, now: Correlation is not the same thing as causation.
The idea here is that upper management at certain companies effectively own the firm and distribute profit accordingly, while middle management usually advances in income by increasing empire.
Edit: variable name.
Show me the top 10% of earners, then give me the breakdown of how much traditional education those people consumed. Hustlers aren't getting by on their credentials.
Other than knocking off a few obvious outliers: Mssrs. Gates, Jobs, Ellison, and Zuckerberg, I believe.
One study on UNC-Chapel Hill graduates in the 1980s said that the best-paying major was geography. Why? Michael Jordan majored in geography.
Outliers on the other hand sometimes choose their own path. Sometimes they drop out of college because of financial problems, but still attend courses that interest them. Sometimes they choose to learn on the job, by making mistakes and fixing them, by screwing around disassembling stuff, by learning from mentors they admire, by trying out new things and so on and so forth.
Saying that Gates, Jobs, Zuckerberg are college dropouts really ignores that these people are/were more educated than the hordes of people coming out with master degrees. And this I think is the biggest problem with our educational system, the fact that these alternate paths aren't properly recognized.
Disclaimer: I'm also a college dropout, I regret it and intend to finish college, on the other hand I have a monthly revenue at least 3 times bigger than the software industry's medium salary in my city for senior developers.
What are you suggesting as a preferred measure of central tendency if not median? The usual suspects include arithmetic mean (strong outlier bias, especially for incomes), or mode (which has other problems).
Or are you suggesting that measures of central tendency are inappropriate for this sort of analysis altogether? In which case, what population/sampling moments would you use instead?
I'd suggest that 2 is false. For a policy analysis, you're interested in either total (mean) or typical (median) outcomes. Probably median. You might toss in some floor/ceiling limits as well (if a particular course of action has a highly bi-modal tendency, with one mode being particularly low, it's not so hot).
As to my own feelings on the matter: a good college education is really valuable. I've certainly met people who are brilliant and/or successful who haven't finished, or even in some cases attended college. One of the biggest problems (and it ultimately does become a problem) with the latter is what I call the "chip on the shoulder" issue: it's an awareness that the person has that they haven't been to college and a mix of compensation and confidence issues resulting.
Much of what you learn in college comes from the context: who you're exposed to, what you're exposed to, library access (much less significant today than 20 years ago, given the Internet and its resources, but there are still huge amounts of information not readily available online). You absolutely can experience much of this outside the academic environment, but you've got to work at it.
At the same time, there are many schools (and student bodies) which are uninspired, and programs which do a poor job of preparing students for the outside world. There were holes in my education. There was much that I learned in college which was self-directed, or incidental.
One of the bigger lessons was the degree to which you might want to discount some random professor/researcher's claim of something ;-)
P.S. This is not sour grapes. I have degrees in physics from Harvard (A.B.) and Caltech (M.S., Ph.D.), and I make well more than the median earnings for Ph.D.s.
P.P.S. I know the real reason these sorts of studies proliferate, but this comment is too small to contain it.
In this case, I see two possibilities. The Bureau of Labor Statistics author is too dumb to understand the fallacy. The second is that she does understand the fallacy, but thinks that at least some Americans won't. If the latter, what purpose would that serve?
Interesting.
Heavy focus on deep, large, long and high-quality education to their offspring is the most important reason, if not the only one, for elite people to stay in the elite. It is also the most rational explanation to why some people are often perceived as more successful than other, eg Chinese and Jewish.
It is easy to come up with counter examples of some guy who did not have the best traditional education cursus and did manage to be successful despite this. But exceptions are not the rule. The mainstream, average rule is that people in power have had good or excellent education.
So this little chart about "education pays" is just a confirmation, among others, to a well-known fact. It has a lot of shortcomings, and shortcuts (like using the income as a measure for success) but it is some value, at least as a reminder.
NB: I may seem hot on the topic. Yes, I am hot on this. Why? Maybe because I live in China, where I see everyday a lot of people who struggle extremely hard, save each yuan they can, in order to push their offspring to the best universities.
Not knocking the education component, education is always a good thing (whether it comes from school or some other avenue), but the perception of success you talk about is because it is still somewhat of an exclusive club; probably doubly so in developing nations. However, thanks to the pressure on students to go to college, that gap is continually shrinking and constantly devaluing the value of the degree.
If you buy a Ferrari, you are perceived as more successful than others. You are going to be afforded luxuries that others do not have, just because you are signalling that you are "better". If we did some studies, I bet we would even find that Ferrari ownership, like a degree, pays – through better contacts and opportunities to make money because of the signalling. But I don't see Ferrari owners out there telling everyone that they need to own a Ferrari. They understand the importance of being part of a select few.
If education pays, you would think you would want to keep that under wraps. Given that, it always feels like there are some insecurities at play every time the topic comes up.
Elites keep being elites by keeping others out. In the past that was done via extremely expensive education clubs.
So, in my experience, having a more advanced degree could only lead to higher income because of big companies with big HR departments, the government, and other clueless employers giving a pay differential.
I would love to see the numbers comparing someone with a PHD from Shit State, compared to a person with a BS from Princeton, compared to a person with a genius level IQ who dropped out of Berkley. Or a PHD in History vs a BS in Math.
I'm always suspicious of PHD's in industry. You don't get a PHD to go work for GE, you go work for GE when you have a piece of paper with PHD on it but can't get an academic position.
So, what I'm saying is, while education level may be correlated with income, it's not a cause, except where employers are clueless.
Ph.Ds. in industry create lots of amazing things: UNIX, 747s, airbags, wireless protocols, manufacturing robots, search engines, and logistics optimization systems are just a few that almost everyone depends on every single day (indirectly in some cases). These are not systems that can be designed without a large amount of focused domain knowledge, which is precisely what the Ph.D. entails.
Sure, there are some people with Ph.D.s who are impractical and unsuited for front-line "get things done" work. I can assure you that is an intrinsic personality trait and not something created by intensely focused study on interesting ideas, which is the defining characteristic of the doctorate.
I'd argue not. It all depends on the degree. College is a form of job training for people like engineers, in which case it has a high return on investment. However, many [if not most] degrees have no relevance to their college degrees.
As many as 63% of college graduates occupy jobs that don't require a college degree! (Uncited, lazy, sorry.)
So does college "pay"? Sure. Does it increase one's skills and productivity? Factoring the opportunity costs, it's hard to tell. I'm in the camp of people who argue that the returns to higher education are due to what's called a "sheepskin", or "signalling", effect in economics.
A BSN is an undergraduate professional degree so I'm not sure where it falls in that list.
Edit: Engineering and accounting are professional degress, computer science is not.
[NB I'm in the UK and while I know plenty lawyers/chartered engineers etc. I've never heard anyone talk about a "professional degree"].
Professional degrees are very specific and single focused. An MBA is just an MBA, no career requires it, but it is a nice to have. It is not considered a professional degree although many professionals do have it.
[*] and when I say required it is a felony to work in that field without the proper degree or license.
I know that in law in Scotland you need two academic qualifications (a law degree, and a postgrad diploma in legal practise) then two years training before you qualify as a solicitor. However, if you want to go to the bar you only need a law degree - but then you have to do a specialised training course and then devil for a year before you can be called.
What it says is that somebody who got a medical/law degree 20-30 years ago, did very well over the last 20-30 years.
It says nothing about whether somebody leaving school today will do better in 20-30 years having spent 10x as much as their parents generation on college - rather than becoming a plumber or electrician or founding a startup
If you compare the lifetime earnings of a rare graduate 30years ago with those of a new 'social studies' type grad today it will be a lot worse
People who floss their teeth have a 7 year higher life expectancy. Obviously, flossing your teeth doesn't increase it.
The second argument is a classical cause/effect thing. I can't imagine that tooth diseases increase heart diseases by 100%, but I can very easily imagine that people with certain habits (eating lots of cheap unhealthy food with much fat and sugar) suffer from both.
Then again I don't know anything about this field, if there is any research that confirms your arguments I'd be surprised but interested.