Education: more, please

There seems to be general agreement that secondary school graduates in most First World countries have attained a level of proficiency which an American acquires after two years of college. To the extent that this is so, we have to allow for some national skew in the terms of this debate. It may be worth noting that American community colleges, which share that two-year horizon, also have a strong occupational orientation.

I’m inclined to quibble with the idea that the pace of technological change implies that workers need to spend more of their youth in post-secondary or post-graduate education. My bias may stem from my experience as a B.A. in math winding up as an electrical engineer, and from my father and my brother (respectively psychology and biology majors) having similar career paths, and from having worked alongside several other creative engineers who got the bulk of their training on the job. It’s my impression that universities lag enough behind the cutting edge that the advantage of a year of study over a year of work isn’t necessarily decisive.

As the first world deindustrializes and manufacturing jobs disappear, it’s incontestable that good jobs for the less educated are already scarce and likely to become more so. We seem to be responding by turning the present generation into salespeople and cosmeticians. I’m of the party that thinks deindustrialization may be the problem.

That entrepreneurs tend to be relatively well-educated isn’t particularly surprising. You need money to make money, and there’s a strong correlation between wealth and educational attainment.

Pretty clearly, this is the result of technological change leads to a steady expansion in demand for skilled/educated labour at the expense of unskilled labour.

I don’t think this is true – in fact, I think the opposite is true. Technological change has sharply reduced the number of jobs that actualy demand a higher education. The whole point of technological advancement is to make life easier, not harder, and the whole point of division of labour is to keep the amount of specialised knowledge required by an individual worker as low as possible. Consider car mechanics – a subject my dad taught in high school. Thirty years ago, a car mechanic might not have had a university degree, but he had to have an extensive practical knowledge of automobile engineering in order to sucessfully diagnose and repair car problems. Now, car mechanics is very different. The tech has a manufacturer specific computer that diagnoses the problem and tells him which of a limited array of labeled parts needs to be removed and replaced. Quite a few trades have gone this way. Consider the role of a Toys-R-Us manager – my wife’s former employment. In the old days, a store manager had to keep extensive records of what was and wasn’t selling, and at least advise higher management of what to buy and ship, if not actually participate in the inventory process himself. They handled employment decisions, managed payroll and receipts, did much of their own marketing and took personal responsibility for much of the facility’s outcomes. Now, much of this handled by computers and supply and inventory decisions are made in Soviet style. (And, as a reader of Hayek might have expected, this doesn’t work very well.)

I do agree, though, that some of what motivates the demand for credentials is the inability to support the costs of training an unskilled worker, but I think that is not because work has smartened up, but that it has been dumbed down. Consider programming – modular, object oriented programming was devised so that coders could write sections of programmes without having to see the big picture. Specifications can be made shorter and simpler, so that coders don’t require the level of training needed to see an entire application though. A university diploma means you’re hopefully at least smart enough to read the spec do the tasks that a job might require without further extensive training.

The growth of medical employment might represent a contrary trend, but not because medical professionals require more education than in days past. The field is far more specialised than it once was. Rather, simply the growth of the medical profession with respect to other sources of employment might skew the overall picture in favour of higher demand for post-secondary education.

A university diploma means you’re hopefully at least smart enough to read the spec do the tasks that a job might require without further extensive training.

No, I really disagree here (although I do lack evidence). To me, the employers demands a diploma for two reasons (which are much the same):

a) Reduce the pool of applicants (to make life easier, presuming they have a large number of applicants);

b) If there is a large pool of people with a better qualification, why take the risk of hiring someone without a diploma, if you don’t have to? Obviously there are cases when this would obviously be a bad idea (e.g. someone has glowing references from Microsoft, and a case-iron reason for leaving them, but happens to have no diploma). However, I would guess that in most cases, you have 30 applicants, and there is really little to tell between them, so you discard the 10 without the diploma, as then you need only interview 20 and not 30.

This doesn’t fully explain that complaint one hears of older programmers with good experience, but no formal qualification, being overlooked for younger, qualified people. However, is this age-ism or cost-cutting?

John, I concede that I don’t really have an emperical evidence! HOWEVER, my specific complaint is really about the massive increase in undergraduate education in the UK in recent years. As far as I can tell from google quickly, participation was about 30% when Labour came to power, and it’s now touching 50% (vaguely). I would suggest that it’s really far too early to tell if wage premiums will hold up: recent evidence which I’ve seen in the THES suggests that in some “soft” subjects like Media Studies (;->) it does not (i.e. it adds no wage premium compared to others in that age group).

It will also be interesting to see, in the UK, if fees change student behaviour: you say “If degrees, on average, add less value than they cost…?” but in the UK, the cost has been pretty modest until very recently.

Actually, John, I’m not sure why:

why is there such a large wage premium for them, and why does the premium increase with experience (the opposite of what a screening model would predict)?

refutes my argument? I’m arguing that the, say, top 30% of jobs go to graduates because employers demand a degree: we would hence except there to be a correlation between a degree and a wage premium.

As for the experience issue: have you isolated the effect or career path? If a degree helps you get a leg-up early on, then won’t you progress up a career path at the same rate, but at a higher level, than a non-graduate? Is the stated effect then nothing more than the fact that the wage premium for position is non-linear (that is, the jump from manager to senior manager is higher than the jump between supervisor and manager, say?) Maybe that’s not what you mean though?

Again, self-employed people might simply be far more motivated than others, and hence more likely to overcome problems to get to university (again, in a historical situation where getting a degree is seen as “important”). I’m slightly distrustful of arguments like:

people planning on going into business for themselves would get a headstart by skipping it.

Do 18-year-olds really wake up, think “I’m going to be self-employed”, and then plan how best to do that? I doubt it: I would guess they are hard-working, innovative, motivated people who head to university (as everyone, pretty much, tells them this is a good idea). They then later form the idea of starting their own business…

I’m not sure if either of us is right anymore; I’m just trying to offer some other ways in which we would observe the emperical evidence which you cite!

John Q: “the wage premium for education hasn’t changed much”

I don’t have the links to post but my distinct recollection from pieces in The Economist of some years back and from a survey by Greenaway in the Oxford Review of Economic Policy is that in both the US and UK, especially the US, is that compared with the 1970s, there have been marked increases in the premia paid to graduates relative to non-graduates.

On the market evidence, there has been an increase in the relative scarcity of graduates in US and UK job markets over the last c. 30 years. This is consistent with the BBC reports of research into graduate pay I posted in Chris’s thread (# 84) and also with anecdotal accounts of employers who put more trust (faith?) in the significance of degrees over school-leaving exams as indicators of personal aptitude and ability, as well as the expected consequences of the shifts towards globalisation and the “knowledged-based” economy.

“There is a strong consensus among economists that formal education is an important
determinant of individual earnings as well as economic growth. The importance of formal
education has been magnified by recent economic trends underlying U.S. labor market
demand for skilled workers.”
http://www.house.gov/jec/educ.pdf

Bob B — I also don’t have a link, but John Goldthorpe has pretty compelling data showing a fall in the premium attaching to a degree since the 80’s — not dramatic, but very very noticeable (in UK). That’s what you would expect, I guess, given dramatic and rapid expansion of HE uptake.

Let me throw a bone to the libertarians. Some of the career paths in which credentialization seems most problematic are either forms of government work or government-regulated lines of work. I believe that some kind of credentialization dynamic may be at work in monopolistic and oligopolistic enterprises such as utilities, too.

By and large I think that the more competitive a market is, the more corners enterprises will cut regarding credentialization. Privatization actually is a pretty good test case for the credentialization debate. I really wouldn’t want my medical plan to hire uncredentialed MD’s, but I wouldn’t have minded if my son’s HS had hired English majors instead of Ed majors. (For the record, my son’s public school HS teachers, whatever their degree, were often excellent).

I am not terribly sympathetic to the libertarian point of view, but it should be on the table, and I’m surprised that it hasn’t shown up yet.

Some of that pressure is in the other direction–with the death of the US industrial database and the decline of unions, not to mention more stringent requirements on applicants for the military, it is no longer reasonable for a U.S. worker to expect that he can get a market-wage job, or enter the military, without completing high school or further training.

If lawyers, nurses and other professions similarly rely more on formal training and less on ‘sitting next to Sally’

Can’t speak to hurses, but lawyers are actually very much an example of credentialism. Law schools have only very recently started to lean towards teaching practical skills, rather than general background and legal theory. It’s expected that the practical skills are taught from ‘sitting next to Sally,’ i.e. through summer or part-time work as a law clerk, or on the job after graduation and passing the Bar (which is another ‘credential’ issue by itself). Very few states now allow a non-degreed person with real-world legal experience to sit for the bar examination. And ‘credentialism’ most certainly applies to law schools; it’s doubtful that one learns how to write contracts better at Berkeley than at Yale, but guess which one is considered a better choice for getting a job later on?

The two models of John and Chris are not exlusive of each other. So the argument is about the size of the component that credentialism or true education play in the premium value and exclusivity of a higher education. On the one hand, (in favor of Chris) is an example such as the replacement of striking air traffic controllers by Reagan. On the other hand (in favor of John) is the increase in education requirements far beyond a step where the type of exclusivity that Chris refers to has taken place. For example, training for medical subspecialties take years longer than training for generalists while the selection that Chris refers to takes place at the entrance to medical school.

There’s a bit of both and it’s difficult to tease apart the premium that employers place on the added knowledge and skill value vs. the type of individual or, as noted above, a proven ability to conform.

I would agree that in the United States, law is perhaps the best example of credentialism run amok – best symbolized by the mid-20th-century movement to rename the standard law degree the “J.D.,” or Juris Doctor, in place of “LL.B.,” Bachelor of Laws. God forbid that law be perceived as of lower academic status than medicine! At the same time, many states ended the ability of non-law-graduates to “read law” and pass the bar. Now, I believe that there may have been at least a colorable issue of quality – I recall seeing arguments that candidates who read law had lower bar success rates, and higher professional complaint rates, than their law-school-educated peers. I’m not persuaded that the differences were worth further gilding the guild, as it were, especially since I think most US lawyers would agree that at least 1/3 of law school education (i.e. the third year) is completely useless.

The more recent attempt by law schools to increase “practical” instruction, which mythago notes above, is unlikely to improve matters much. My law school, NYU, was at the vanguard of this movement back in the late 80s and early 90s, when with much fanfare and expense it launched its “Lawyering” program. “Lawyering” classes attempted to augment the traditional first-year course covering research, writing, and oral argument with a set of somewhat fuzzier skills – negotiation, client counseling, etc. I was, and remain, utterly unpersuaded that these latter units were and are of any use whatsoever, because the skills they covered simply cannot be taught effectively other than through practice. Lots of practice, actually, requiring far more time than a law school could reasonably give.

More unforgiveably, these units effectively reduced the time spent on research and writing, at the same time as the first truly post-literate cohort was moving through law school. The result of this sacrifice became clear late in my second year. I joined the senior editorial board of a journal, a position which required me to help wade through the writing tests that first-year students submitted in their applications for journal membership. I was appalled: students from the best undergraduate schools in America proved incapable of writing a simple persuasive essay in the form of a legal memo. Bad enough that these students had managed to get admitted – but worse that the Lawyering program twiddled around trying to teach client relations while what the students really needed was a sort of writing boot camp.

The sad reality? All of these students left NYU with a degree that gave them virtua carte blanche entry into the most prestigious firms in the US, making the equivalent of over $100K/year from the start. The reason these law firms extract so many billable hours out of their associates is that their work is almost worthless – takes a lot of it to make the salary even remotely economic.

I would much prefer a system that would eliminate the third year of law school and mandate a two to four year clerkship instead – performed with a court, a public prosecutor’s office, a public defender’s office, a legal aid society, etc. This would be the equivalent of a doctor’s clinical training, and would inculcate at least some form of public service, while decreasing the cost of legal education. Chance of it ever happening? Almost none.

Bob B, that’s not the argument though! The argument is that for many jobs, one does not *need* a degree in a practical sense, but the employers do demand a degree (for reasons elaborated elsewhere in these two threads). This makes an artifical barrier to entry into higher-paying jobs, one which is harder for those from poorer backgrounds to overcome. If this is true, then your statistics just back up the argument that “too many” degrees are a barrier to social mobility!

“The argument is that for many jobs, one does not need a degree in a practical sense, but the employers do demand a degree.”

If so, it needs to be explained why employers are mostly willing to pay on average a premium for employing graduates – except for arts graduates, that is – when they could readily recruit non-graduates, as and when non-graduates are capable of doing the job.

Are we to seriously believe employers generally do this out of an increasingly pervasive philanthropic inclination to encourage and support the beneficiaries of higher education despite the costs to businesses subject to mounting competitive pressures from globalisation?

FWIW I am more inclined to believe suggestions that where degree-level skills or aptitudes are not actually required for jobs, employers are prone to repose more trust in degrees as signals of personal ability and commitment than the results in school leaving exams – possibly because of recurring debates in Britain about grade inflation in school leaving exams and whether the GCSE exams (usually taken at 16) are “too easy”.

In Britain, there is a manifest public reluctance to address the implications of the fact that historically stay-on rates in full-time education after the age of 17 are low by comparison with our peer group of other affluent countries. As the UK’s then school standards minister put it a few years back:

“It must be one of the most stunning statistics that we are 20th out of 24 OECD countries for staying-on rates at 17.”
http://news.bbc.co.uk/1/hi/education/2238424.stm

Btw apologies for over-lapping posts.

Oh, blast, it appears to have eaten my post! Erm, I might re-type it in a few minutes…

The basic argument in my eaten post was this:

a) Employers do not perform 100% accurate searches for employees, as hiring people costs money (advertising, interviewing time, lost time because you want an employee *now* and not at some indefinate point in the future);

b) Hiring the wrong person can be costly: it makes sense to pay a premium to be sure someone is competant, rather than have them perform under-par;

c) Employers consistently over-rate degrees and under-rate lower qualifications, leading them to believe, for reasons (a) and (b), that it’s worth paying extra for a degree that’s not really needed (in the belief, say, that anyone with a degree is basically numerate and literate, and that anyone without is not).

Now, one would expect that someone without a degree, but with experience and references, should be equally attractive. I (as I said above) am not convinced that the statistics show this not to be the case (as you would really need to look at (unexperienced+degree) vs (experiences+no degree) applying for the same job, and not just aggregately over everyone).

It’s not just the matter of screening. College graduates come already housebroken; they already invested tens of thousands of dollars and years of their lives into this socio-economic system and they’re unlikely to rebel against it. IOW, they probably won’t be stealing small sums of money.

Again, there seem to be a lot of people complaining about “credentialism” the way people complain about “life”–without giving any serious consideration to the available alternatives. In the absence of (possibly superfluous) credentials, how will employers choose their employees? By lottery? By deep exploration of the contents of every applicant’s soul? By giving each applicant a two-week trial?

No, the alternatives to credentialism are nepotism, “old boys’ networks”, “connections”, and the rest–all of which are less efficient, less fair and less inclusive than credentialism.

In the 1980’s, the Canadian postal system (if I may engage in rampant anecdote-mongering) wrested from the postal union the right to control its hiring practices. It then instituted an elaborate barrage of formal tests for evaluating the hordes of applicants that responded to its occasional, highly prized (because extremely cushy and overpaid) job openings. These tests were really quite hard–they had to be, to weed out all but the very top applicants–and measured all sorts of skills that could only vaguely be correlated with postal work–memorization, manipulation and sorting of long lists of words and characters, and the like. The resulting employee pool thus ended up consisting largely of intelligent, talented people with low ambition, who could ace the tests, win their sinecures, and spend the rest of their lives in comfortable stasis. One could scarcely imagine a more flagrant case of pointless credentialism.

The union-controlled system that preceded it? An official policy of granting first right of refusal to relatives of current postal workers.

Dan, Okay, I would argue for the following (in a slightly UK specific sense): Abandon artifically increasing university places (i.e. the fact that undergrad intakes to many departments have, say, doubled over recent history, but the average ability of the student has declines) and ploy extra money and thought into raising school standards.

The hope is that employers would then be more willing to look at people with good high-school results, hence forcing less people to have to go to university and incuring the cost associated with that. I’m arguing for replacing a credentialism based upon an optional university education with a credentialism based upon complusory basic education.

No, the alternatives to credentialism are nepotism, “old boys’ networks”, “connections”, and the rest

False dilemma. The alternatives to meaningless credentials are meaningful credentials and work experience. (If an applicant has no college degree but spent ten years working at a high-level programming job at Microsoft, does the employer really have no idea of their skill set or reliability?)

I’m arguing for replacing a credentialism based upon an optional university education with a credentialism based upon complusory basic education.

I’m all in favor of restoring meaning to primary and secondary education credentials, which are today often pretty much meaningless. The key to doing so, of course, is to set and enforce rigorous standards in primary and secondary education–and I’m all for that, as well. Indeed, I doubt too many people who are serious about education would disagree with you. (Sadly, education theorists and ed-school academics are, for the most part, shockingly unserious about education.)

But I was under the impression that the discussion here was less about the time scale of the education system than about society’s goals in providing one, and its effectiveness at achieving those goals. Whether education contributes to social mobility, for example, or inhibits it–as Chris argues–via credentialism, seems to me to be a question that is independent of whether the education in question is a hard-won university degree or an equally-hard-won high school deploma.

Dan Simon—hiring by test is NOT credentialism. Asking people who can pass a test to take a series of college courses is credentialism.

Why on earth should it matter whether or not an employer outsources its job candidate testing to a university?

In the US most mailpersons start as mail sorters who are expected to work very fast. This test is very apropos to their work.

I’m given to understand that the level of performance required at the tasks in the tests was far in excess of what was actually needed for the job. That was the whole point–because the jobs were so desirable, a huge pool of applicants was available, the majority of whom were perfectly well-qualified to do the job. The alternatives were credentialism–awarding the job to the applicant whose test score was most extravagantly above the bar for excellent job performance–or cronyism.

The same holds, I would argue, for most jobs: there being no perfect way of ranking candidates for a job, credentialism at least has the advantage of relative objectivity. Sure, it tends to result in overqualification and credential inflation, but the alternative is still far worse.

Dan Simon—hiring by test is NOT credentialism. Asking people who can pass a test to take a series of college courses is credentialism.

Why on earth should it matter whether or not an employer outsources its job candidate testing to a university?

Dan, I’m starting to wonder whether I should take you seriously. I was talking about what people mean when they talk about credentialization. Not “why it should matter”. I was just defining a term and the issue. But the reasons why the difference should matter in terms of social mobility (and the recruitment of talent) are: first, that requiring a class provides a barrier to entry (financial and otherwise) which going by a test does not provide; second, as I have said, that often the classes required are irrelevant make-work; and third, that outsourcing to a university often is hand in glove with attempts by organized groups to restrict entry to a trade.

Perhaps the postal requirements were in excess of the actual requirement, but what you said was that the requirements were “only vaguely related” to the requirements of the job, which is completely false.

You really seem to have an obtuse talent for ignoring things you don’t have an answer for. I did mention an additional difficulty with credentialization, which is that it works to the disadvantage of people who were already doing the job before credentialization was required. In a case I knew of, the requirement of a BS degree ended up causing the hiring of a lot of lab assistants who often had no intention of staying on the job even long enough to learn how to do it.

My guess is that in Britain, many parents with school-aged children and almost all employers would gladly cheer on proposals for improving school standards rather than continuing to increase the percentage of young people going to university. The trouble is that even with the very best of intentions all round and disposing lots of taxpayers’ money, that is easier said than done as the following news reports demonstrate:

“Government claims that extra money for England’s schools has boosted GCSE results are not based on fact, MPs say. Real-terms spending rose by 31.6% from 1999 to 2003, while the proportion getting the equivalent of five good GCSEs went up five percentage points. In the previous four years, results rose by 4.4 points, while investment increased by just 3.4%, the Commons education select committee found.”
http://news.bbc.co.uk/1/hi/education/4151879.stm

“The higher-grade GCSE success rate in England appears to have reached a plateau, official figures suggest. Last year the proportion of pupils who achieved at least five GCSEs at grades A* to C – as opposed to other qualifications – was 50.2%.”
http://news.bbc.co.uk/1/hi/education/4202327.stm

“Government policies on education are failing to remedy the UK’s shortage of skilled workers, the director general of the Institute of Directors has said. Around 25,000 16-year-olds a year leave school with no GCSEs, Miles Templeman said in a speech to the Institute of Economic Affairs. He said the skills shortage last year left 135,000 vacancies unfilled.”
http://news.bbc.co.uk/1/hi/business/4200659.stm

Dan, the problem with tests vs. credentialization is that requiring class work imposes a financial burden and usually also a waiting period (since not all classes are available at all times; students frequently have to wait an extra year, and sometimes even two, for a single required class. The distinction between tests and credentialization is that academically-routed credentialization excludes people who have learned the material without paying off the schools.

In education and other practically-oriented programs, it’s often clear enough that the schools are selling access and credentials. One top of everything else, the gatekeepers (who often haven’t worked in the field for years, if ever) develop an arrogance based on their “research” and “methodology”.

Dan, the employers I was talking about were not voluntarily extending credentialization beyond hiring. Credentialization is institutionalized and enforced. The employers were forbidden to hire or promote certain employees who were capable of doing the work and who,m in some cases, had already been doing the work satisfactorily on an interim basis for some time.

I’ve known people who qualified for difficult uncredentialed fields (software) by self-study. In ermegent areas that’s the most common way.

I think that a university education do offer some advantages in the workforce beyond a piece of paper, though my evidence comes from anecdotes:

1) You learn how to do research. My mum, with a university degree, went into business with a friend who was a nurse, trained before that required a degree. My mum states that one difference she notices is that if she doesn’t know something, she generally thinks of doing some research into it, while her partner doesn’t think like that.

2) You make contacts in your area of expertise. This is not just a Oxford/Cambridge/Harvard thing. In NZ there are too few universities to work like that. But as a result of my degrees, I do know people doing things related to my work who I can then call up and ask questions. I do not think this would be so relevant for general office jobs however.

3)You get a broad base of information. One academic I know described it as “a set of tools with which you can jump into any foreign situation and make a complete fool of yourself”. Now, having worked for a number of years I know what he means. But even though I do regularly make a fool of myself, I can also suggest ideas from other areas that might be useful for a new problem that the job is facing.

I do not know how much this applies to arts graduates. And I do think it is a pity to see arts students at university who just sort of wandered into the degree since they got their best marks at school in English, but without any plans for what they will do with that degree in the job market and without the passion for the subject that makes spending 3 years and tens of thousands of dollars worthwhile for its own sake (even if uni is free you face the opportunity cost of the wages you could have earned).