Leonhardt contends that college is still a smart investment:
The pay gap between college graduates and everyone else reached a record high last year, according to the new data, which is based on an analysis of Labor Department statistics by the Economic Policy Institute in Washington. Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s. …
The much-discussed cost of college doesn’t change this fact. According to a paper by Mr. Autor published Thursday in the journal Science, the true cost of a college degree is about negative $500,000. That’s right: Over the long run, college is cheaper than free. Not going to college will cost you about half a million dollars.
Yglesias isn’t so sure:
Suppose I got someone to make a chart showing the incomes of prime-age BMW drivers versus average Americans.
It would reveal a large BMW earnings premium. I could even produce a chart showing that the children of BMW drivers grow up to earn more than the average American. But that wouldn’t be evidence that BMWs cause high wages, and that the BMW Earnings Premiums extends across multiple generations. It would be evidence that high-income people buy expensive cars and that there’s intergenerational transmission of socioeconomic status.
To understand whether college is “worth it” — or, more precisely, which colleges are worth it to which students — we would need some much more fine-grained data.
Leonhardt fends off this type of attack:
[T]he detailed research on the value of college comes to the same conclusion as the straightforward data comparing the pay of graduates and nongraduates. For the vast majority of people, college pays off. Correlation and causation, in this case, run in the same direction.
I’d argue that you do not need complicated academic research to demonstrate this point, either. Just look at market behavior. Virtually everyone with the resources to send children to college does so — including those who say they’re skeptical of its worth. And large numbers of low-income parents say that one of their highest goals in life is to send their children to college. In this case, the collective behavior of millions of people says as much about the value of education as any regression analysis.
Ben Casselman adds a caveat:
Most of the benefits of college come from graduating, not enrolling. Indeed, as Leonhardt pointed out, the wage premium for people with some college but no degree has been stagnant, even as debt levels have been rising. That means that people who start college but drop out may be worse off than people who never enrolled in the first place. Any attempt to answer the “Is college worth it?” question, therefore, has to grapple with not only the value of a degree, but the likelihood of obtaining one.
For many students, the odds aren’t good. Less than 60 percent of full-time students who are enrolled in college for the first time graduate within six years.