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Comment by londons_explore | Hacker News Reader

> According to repeated analyses by economists at the Federal Reserve Bank of New York, a four-year degree generates an annual return of 14 percent over a 40-year career.

I fail to see how this statistic can be calculated in a scientifically rigorous way.

The only method would be to pick a pool of people, randomly divide the pool in two, and then force half to go to college, while you force the other half not to.

Any other approach suffers from sampling bias - the smart motivated ones find a way to go to college, while the rest stay home and stack shelves at walmart for a lifetime.

And now you're saying that being smart and motivated earns you more... Well no surprise there!

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One of the linked papers [1] describes several approaches to this problem (known as https://en.wikipedia.org/wiki/Causal_inference). They generally agree with the 10-15% ROI result.

For example:

- Regression discontinuity (find a college that accepts people who score >=X on a test, then compare people who scored X vs people who scored X-epsilon)

- Instrumental variables (find something that would nudge people to go to college, like living close to a college)

- Natural experiments (find an event that 'forced' many people to suddenly sign up, like 'avoiding the Vietnam war draft').

[1] Section 4 of https://sci-hub.se/https://doi.org/10.1146/annurev-economics...

Even that methodology is flawed. Walmart has a lot of store manager/assistant managers that do quite well with high school diplomas or GEDs. Smart motivated people also do well starting businesses or working in trades. The incessant narrative that a college degree as the path to prosperity is tired and worn and rightly perceived as bogus imo.

University is now a business, and the product is degrees and "college experience", the customers are students. The product has suffered; degrees are no longer rigorous. Teaching faculty have suffered; tenure tracks has disappeared in favor of adjunct part time faculty. Students suffer under mountains of debt. The only winners are the legions of administrators. Some schools have as many as 1 administrator per 1 student. It's absurd.

"Walmart has a lot of store manager/assistant managers that do quite well with high school diplomas or GEDs. Smart motivated people also do well starting businesses or working in trades. The incessant narrative that a college degree as the path to prosperity is tired and worn and rightly perceived as bogus imo."

I am both a graduate school and high school dropout. A motivated individual could replace university with a library and Internet connection. However, proving one's knowledge can be more difficult than acquiring it. A degree makes it easier to communicate and demonstrate skill.

Congratulations you’ve identified exactly the problem which concerns literally every economist who has ever worked on this question. Education Econ people work very hard to get around exactly your worry.

Education is not my field but there are ways to identify causal effects outside of experiments.

So: you are wrong when you say “the only way to do this is…”

> smart motivated ones find a way to go to college

the bigger sample bias is that wealthy people almost universally send their children to college and their children are always going to earn above average wages.

it is pretty obvious that people who graduate college are going to earn more because large numbers of high paying jobs require a college degree, but that is a bad thing.

jobs that require specific skills should have objective skills tests to qualify for the job. requiring a degree for a job should be prohibited by law because it is blatantly discriminatory.

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