New study on the long-term value of liberal arts education

[Wahoo Redux]

I'll make a related, even more specific analogy: a survey study indicates a correlation between a new, very expensive drug and health outcome. Yet the study fails to account for the fact that people wealthy enough to afford the drug (e.g., employed with health insurance benefits) generally receive better medical care and overall are healthier than average.

To summarize the findings from the report:

Here are some of the headings in the report:

• The ROIs at the most selective liberal arts institutions are very high. (emphasis added)
• High graduation rates are associated with high ROIs at liberal arts colleges.
• Liberal arts institutions with smaller shares of low-income students have higher ROIs.
• ROI is high for institutions that have a high share of STEM majors.
• Geography is an important factor in ROI. (It further states that "Colleges in regions where per capita earnings are greater have higher median ROIs than colleges in regions where per capita incomes are lower.")

I strongly urge eye protection before proceeding to my summary of the report's findings.


Summary:
High income students in areas with high income going to selective liberal arts colleges with a high percentage of STEM majors and high graduation rates have higher ROIs than low income students in areas of low income attending non-selective liberal arts colleges with a low percentage of STEM majors and low graduation rates.

I sincerley hope the eye protection prevented damage due to the blinding flash of the obvious.

Yes Marshy, everyone saw your cherry-picking talents earlier. 

[marshwiggle]

I'll make a related, even more specific analogy: a survey study indicates a correlation between a new, very expensive drug and health outcome. Yet the study fails to account for the fact that people wealthy enough to afford the drug (e.g., employed with health insurance benefits) generally receive better medical care and overall are healthier than average.

To summarize the findings from the report:

Here are some of the headings in the report:

• The ROIs at the most selective liberal arts institutions are very high. (emphasis added)
• High graduation rates are associated with high ROIs at liberal arts colleges.
• Liberal arts institutions with smaller shares of low-income students have higher ROIs.
• ROI is high for institutions that have a high share of STEM majors.
• Geography is an important factor in ROI. (It further states that "Colleges in regions where per capita earnings are greater have higher median ROIs than colleges in regions where per capita incomes are lower.")

I strongly urge eye protection before proceeding to my summary of the report's findings.


Summary:
High income students in areas with high income going to selective liberal arts colleges with a high percentage of STEM majors and high graduation rates have higher ROIs than low income students in areas of low income attending non-selective liberal arts colleges with a low percentage of STEM majors and low graduation rates.

I sincerley hope the eye protection prevented damage due to the blinding flash of the obvious.

Yes Marshy, everyone saw your cherry-picking talents earlier.

I don't see how listing the headings from the report is "cherry picking".

[Kron3007]

To draw this conclusion, the students would need to be randomly assigned to different types of education and then we could evaluate the outcomes [...] It is quite likely that this subset of people would have earned more than most regardless of the degree/program they enrolled in due to various factors   

I hear what you are saying.  However, one cannot do the kind of study you are suggesting.  As I posted earlier, we could fashion a control group if we had a mirror universe with which to experiment.

I also keep seeing the "It is quite likely" that this group of students would do about as well no matter what they studied in college----but this is a pretty unproven assertion. 

What we do have are numbers that indicate that the worst charges against a liberal arts education are simply untrue.

That's what this study shows us, if nothing else.

There is an odd resistance to any good news or factual correction regarding the lib arts.

I completely agree and as I said, I see advantages to a liberal arts education.  Perhaps not for everyone or every field, but definitely for some people.

It is just one of my pet peeves when media (and even more when researchers) reports on this type of study and make this leap.  It is far too common and is problematic on many levels.

[Golazo]

I think a lot of the analysis misses that a lot of the schools in report that led to the numbers in question are not at all prestigious top 100ish LACS:

Consider from the public side for example University of Wisconsin-Parkside, Shepherd University (WV), and Pennsylvania State University-Penn State Brandywine and from the private side  Georgetown College (KY) and Saint Mary's College (IN) (to take five colleges more or less at random based on where I was looking). All of these schools outperformed the average in number of categories, including medium size master-level schools, and the three I have some knowledge of  are not enrolling lots of students in lots of the highest income majors. These schools are not selective at all, and with the possible exception of the Penn State school, don't benefit from location effects. Saying its all about Williams et al is missing an important point.

[Wahoo Redux]

I think a lot of the analysis misses that a lot of the schools in report that led to the numbers in question are not at all prestigious top 100ish LACS:

Consider from the public side for example University of Wisconsin-Parkside, Shepherd University (WV), and Pennsylvania State University-Penn State Brandywine and from the private side  Georgetown College (KY) and Saint Mary's College (IN) (to take five colleges more or less at random based on where I was looking). All of these schools outperformed the average in number of categories, including medium size master-level schools, and the three I have some knowledge of  are not enrolling lots of students in lots of the highest income majors. These schools are not selective at all, and with the possible exception of the Penn State school, don't benefit from location effects. Saying its all about Williams et al is missing an important point.

This is why you were cherry-picking, Marshy.  The "headings" are not the substance of the report.

Some posters simply want to distort.  Some are highly intelligent and very experienced; some are neither of those things.  Why they have it in for the lib arts is a mystery. 

[spork]

This article

https://www.theatlantic.com/ideas/archive/2020/01/college-wealth-premium-collapsed/604579/

links to a paper published by the Federal Reserve Bank of St Louis.

Tl/DR version - there continues to be a premium for lifetime earnings for those with a college education.  They make more money.  But  the wealth premium has collapsed.  The overall wealth of college graduates has declined precipitously.  Recent graduates have been less able to buy into the housing market, and are more burdened with debt (educational and consumer debt).

So, college grads certainly MAKE more money.  But their chances of hanging on to it and growing their net worth is decreasing rapidly.

From the St. Louis Fed study: "Among families whose head is of any race or ethnicity born in the 1980s and holding a postgraduate degree, the wealth premium is also indistinguishable from zero."

I was born in the 1960s, but I'm reminded of the guy who renovated our kitchen, who was born in the early 1970s. He owns six multi-family rentals with his brother. His son, his partner for home remodeling jobs, will inherit the family business. None of them went to college. If I had stuck with federal government employment after college, I'd be retiring in a few years with a nice pension. But instead I spent six years to get a PhD, while effectively earning no income, not accumulating any wealth, and popping out with an inflation-adjusted starting salary that was less than what I had been making in my federal government job.

[Wahoo Redux]

Sorry buddy.  I too was born in the '60s.  Somehow I stumbled through my undergraduate years and then spent a miserable decade or so crunching imaginary numbers into databases and taking abuse from clients over the phone.  I would probably be making around $100K to $150K a year had I stayed the course, and I could probably have picked what part of the country I sought employment in. 

Fortunately I took a different route that led to a much better life overall----although I sure wish we could find work somewhere else. 

Different jobs have different paychecks.  It's part of the deal.

[ciao_yall]

This article

https://www.theatlantic.com/ideas/archive/2020/01/college-wealth-premium-collapsed/604579/

links to a paper published by the Federal Reserve Bank of St Louis.

Tl/DR version - there continues to be a premium for lifetime earnings for those with a college education.  They make more money.  But  the wealth premium has collapsed.  The overall wealth of college graduates has declined precipitously.  Recent graduates have been less able to buy into the housing market, and are more burdened with debt (educational and consumer debt).

So, college grads certainly MAKE more money.  But their chances of hanging on to it and growing their net worth is decreasing rapidly.

From the St. Louis Fed study: "Among families whose head is of any race or ethnicity born in the 1980s and holding a postgraduate degree, the wealth premium is also indistinguishable from zero."

I was born in the 1960s, but I'm reminded of the guy who renovated our kitchen, who was born in the early 1970s. He owns six multi-family rentals with his brother. His son, his partner for home remodeling jobs, will inherit the family business. None of them went to college. If I had stuck with federal government employment after college, I'd be retiring in a few years with a nice pension. But instead I spent six years to get a PhD, while effectively earning no income, not accumulating any wealth, and popping out with an inflation-adjusted starting salary that was less than what I had been making in my federal government job.

The point is that because you went to college, you had choices. Some made more money, some less.

My stepfather went to college, worked as an engineer for Hughes and started buying real estate in Southern California in the 1950's. Sometime in the 1970's he figured out he was making more in rent than his salary and decided to retire early. When he dropped dead of a heart attack on the tennis court in the 1980's his 3 kids inherited his property holdings.

I guess his kids were lucky that they had an income stream and didn't have to worry about going to college or getting a job.

[marshwiggle]

I think a lot of the analysis misses that a lot of the schools in report that led to the numbers in question are not at all prestigious top 100ish LACS:

Consider from the public side for example University of Wisconsin-Parkside, Shepherd University (WV), and Pennsylvania State University-Penn State Brandywine and from the private side  Georgetown College (KY) and Saint Mary's College (IN) (to take five colleges more or less at random based on where I was looking). All of these schools outperformed the average in number of categories, including medium size master-level schools, and the three I have some knowledge of  are not enrolling lots of students in lots of the highest income majors. These schools are not selective at all, and with the possible exception of the Penn State school, don't benefit from location effects. Saying its all about Williams et al is missing an important point.

This is why you were cherry-picking, Marshy.  The "headings" are not the substance of the report.

Some posters simply want to distort.  Some are highly intelligent and very experienced; some are neither of those things.  Why they have it in for the lib arts is a mystery.

FWIW, I don't have it in for the liberal arts. But I hate seeing statistics used to mislead people. (I'm probably like Kron in this.)

Research 101: When presenting results, anticipate the objections to your findings, and preempt them by showing evidence from your data that refute the objections.

Selection bias and signalling are THE obvious objections to a study like this, so any competent researchers should have come up with some evidence to show that it was the education that mattered. The fact that they didn't suggests to me that they were more concerned with producing marketing hype than actually establishing the value of education. (Again, I think I'm with Kron on the fact that there is value which could be established.)

For example: If they showed that, *holding all of those factors like income, geography, selectivity of institution, etc. constant, ROI increased with academic performance (i.e. A students had better ROI than B students who had better ROI than C students and so on), it would  be stronger evidence that the better education they received, the more it payed off.


(*The easiest way to hold those constant would be to compare within institutions, where the students are similar, from similar geographic areas, etc. You could even even use high school grades to compare students of similar academic ability coming in.)