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

[picard]

The Washington Post has just published an article which summarizes a Georgetown Univ study on the long-term value of liberal arts education - a topic that has been a subject of debate among students, parents, policymakers, and subject of lively discussion in this fora as well.

https://www.washingtonpost.com/local/education/liberal-arts-education-waste-of-money-or-practical-investment-studys-conclusions-might-surprise-you/2020/01/13/5a197b14-3649-11ea-bb7b-265f4554af6d_story.html

Some highlights of the article:

... over the course of a career, a liberal arts education is remarkably practical, providing a median return on investment 40 years after enrollment that approaches $1 million .

The Georgetown study finds that the return on a liberal arts education is not typically immediate — at 10 years, the median return is $62,000 — but over the decades of a career, it is solid. Only doctoral universities with the two highest levels of research activity, well-known institutions such as Stanford University and the Massachusetts Institute of Technology, fared better in the school's estimated return on investment. The median 40-year return of $918,000 at liberal arts colleges is more than 25 percent higher than the median for all colleges, researchers found.

[Kron3007]

The problem with many studies like this is that it is not a random sampling and I don't know that you can draw this conclusion.  I have not read the original study, so perhaps they tried to account for this, but far too often they don't and/or the media twist the conclusions.  Regardless, it is a bit of a chicken and egg situation, is it that a liberal arts education has these benefits or is it that people who choose that path (and have family that support it) tend to be successful? 

[marshwiggle]

The problem with many studies like this is that it is not a random sampling and I don't know that you can draw this conclusion.  I have not read the original study, so perhaps they tried to account for this, but far too often they don't and/or the media twist the conclusions.  Regardless, it is a bit of a chicken and egg situation, is it that a liberal arts education has these benefits or is it that people who choose that path (and have family that support it) tend to be successful?

Furthermore, it is (at best) estimating the value of a degree obtained 4 decades ago. Since the work landscape and student population then were vastly different than now, it's not necessarily relevant to high school students today trying to figure out their future.

[Wahoo Redux]

The problem with many studies like this is that it is not a random sampling and I don't know that you can draw this conclusion.  I have not read the original study, so perhaps they tried to account for this, but far too often they don't and/or the media twist the conclusions.  Regardless, it is a bit of a chicken and egg situation, is it that a liberal arts education has these benefits or is it that people who choose that path (and have family that support it) tend to be successful?

Furthermore, it is (at best) estimating the value of a degree obtained 4 decades ago. Since the work landscape and student population then were vastly different than now, it's not necessarily relevant to high school students today trying to figure out their future.

How are the students of today vastly different?  Much if not most of North American life is very much the same as it was 40 years ago.

And, since we cannot know what the future holds, we kind of need to rely on data starting 40 years ago measured until today to gauge as best we can ROI...

...because, of course, ROI is all that is important about an education.

[Kron3007]

The problem with many studies like this is that it is not a random sampling and I don't know that you can draw this conclusion.  I have not read the original study, so perhaps they tried to account for this, but far too often they don't and/or the media twist the conclusions.  Regardless, it is a bit of a chicken and egg situation, is it that a liberal arts education has these benefits or is it that people who choose that path (and have family that support it) tend to be successful?

Furthermore, it is (at best) estimating the value of a degree obtained 4 decades ago. Since the work landscape and student population then were vastly different than now, it's not necessarily relevant to high school students today trying to figure out their future.

How are the students of today vastly different?  Much if not most of North American life is very much the same as it was 40 years ago.

And, since we cannot know what the future holds, we kind of need to rely on data starting 40 years ago measured until today to gauge as best we can ROI...

...because, of course, ROI is all that is important about an education.

Technology has changed a little in the last 40 years if I'm not mistaken.  The types of jobs you can get with various degrees has changed a lot in the last 40 years.  I would say a lot has changed that could impact these observations.

I see advantages of a liberal arts education, but I also see costs.     

[Wahoo Redux]

The problem with many studies like this is that it is not a random sampling and I don't know that you can draw this conclusion.  I have not read the original study, so perhaps they tried to account for this, but far too often they don't and/or the media twist the conclusions.  Regardless, it is a bit of a chicken and egg situation, is it that a liberal arts education has these benefits or is it that people who choose that path (and have family that support it) tend to be successful?

Furthermore, it is (at best) estimating the value of a degree obtained 4 decades ago. Since the work landscape and student population then were vastly different than now, it's not necessarily relevant to high school students today trying to figure out their future.

How are the students of today vastly different?  Much if not most of North American life is very much the same as it was 40 years ago.

And, since we cannot know what the future holds, we kind of need to rely on data starting 40 years ago measured until today to gauge as best we can ROI...

...because, of course, ROI is all that is important about an education.

Technology has changed a little in the last 40 years if I'm not mistaken.  The types of jobs you can get with various degrees has changed a lot in the last 40 years.  I would say a lot has changed that could impact these observations.

I see advantages of a liberal arts education, but I also see costs.   

Technology, sure.  I knew someone would say that.  We are slightly less agrarian, slightly more urban, and slightly more white-collar than 40 years ago; certainly technology had a part in that.

But, while there are new technology careers which appeal to a certain percentage of the populace, the computer and Internet are not, say, the car or air travel either.

And we still go to high school, go to college, get a job, get married, get a house and a mortgage, have children, yadda yadda and so on.  So sure, we have some new technology careers, most of North America is very much the same territory.

[secundem_artem]

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.

[jimbogumbo]

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.

But isn't everyone's chance of growing their net worth (except the top 1-2% or the Boomer's) decreasing rapidly?

[Kron3007]

The problem with many studies like this is that it is not a random sampling and I don't know that you can draw this conclusion.  I have not read the original study, so perhaps they tried to account for this, but far too often they don't and/or the media twist the conclusions.  Regardless, it is a bit of a chicken and egg situation, is it that a liberal arts education has these benefits or is it that people who choose that path (and have family that support it) tend to be successful?

Furthermore, it is (at best) estimating the value of a degree obtained 4 decades ago. Since the work landscape and student population then were vastly different than now, it's not necessarily relevant to high school students today trying to figure out their future.

How are the students of today vastly different?  Much if not most of North American life is very much the same as it was 40 years ago.

And, since we cannot know what the future holds, we kind of need to rely on data starting 40 years ago measured until today to gauge as best we can ROI...

...because, of course, ROI is all that is important about an education.

Technology has changed a little in the last 40 years if I'm not mistaken.  The types of jobs you can get with various degrees has changed a lot in the last 40 years.  I would say a lot has changed that could impact these observations.

I see advantages of a liberal arts education, but I also see costs.   

Technology, sure.  I knew someone would say that.  We are slightly less agrarian, slightly more urban, and slightly more white-collar than 40 years ago; certainly technology had a part in that.

But, while there are new technology careers which appeal to a certain percentage of the populace, the computer and Internet are not, say, the car or air travel either.

And we still go to high school, go to college, get a job, get married, get a house and a mortgage, have children, yadda yadda and so on.  So sure, we have some new technology careers, most of North America is very much the same territory.

Technology has a lot of impacts, and not just on the factors you mention. This isn't just a matter of new fields emerging, it is about technology impacting everyone's job and the skills they need. For example, the emergence of the internet impacts how we do everything and information that used to be difficult to find (and liberal arts grads may have had some of this knowledge) is now at everyone's fingertips.  This alone could impact the value of a broad education.  Perhaps this is not true, but the fact remains that we cannot assume that data taken from a different era would apply to current students entering university.  There used to be value to learning short hand, but that is no longer true...

Further, as mentioned the whole approach is flawed as people who select a liberal arts education are a subset of the population with a different outlook on education and life.  It's like finding that people who go to Harvard business school earn more money and assuming it is because of the quality of the course material when it is more likely due to networking and reputation.  It is quite possible that lesser business schools have equally good material/delivery but their grads earn leas.

[Wahoo Redux]

Technology makes us more connected and gives us greater access to information, it makes some things quicker, but with the exception of the new computer and digital media employment sectors not that much has actually changed. 

Think about it: lawyers are still lawyers but instead of using a law library they use Westlaw or some other database; their admin assistants type on PCs, not electric typewriters; and their clients quite possibly found them through the Internet---although it may have been advertising, word of mouth, or the regional Bar Association as in the olden days, but everything else is pretty much the same.  Students need to know MSWord, PowerPoint, Excel, and basic email functions; Photoshop and some program that allows them to design webpages are pluses (a small, new skill-set, in other words)----otherwise the jobs they do are very, very much like the jobs we did back in the 1980s, just updated to new technology.

We could say this about orchestra conductors, mechanics, stock brokers, professors, etc. The professional world where one wields one's college degree is still very much the same, even if it is somewhat more complicated.  I like to tell my students about going door-to-door and peddling my resume to irritated receptionists and then going into HR offices and looking for the cork-boards with job postings on little cards tacked to them; after that, however, the experiences students will have today are very much like the experiences I had back then---from the interview onward.  The world is simply not that much different than it was in 1980.  It's simply not. 

And as I posted, how else are we to gauge the ROI of a college degree but over the long haul?  Can we predict outcomes based on data that starts in the 1980s and extends until today?  Maybe.  Probably.  We don't know what the future holds.  We do know what the data presents to us now, presuming the methodology is solid, which is another debate.

[Caracal]

Technology has a lot of impacts, and not just on the factors you mention. This isn't just a matter of new fields emerging, it is about technology impacting everyone's job and the skills they need. For example, the emergence of the internet impacts how we do everything and information that used to be difficult to find (and liberal arts grads may have had some of this knowledge) is now at everyone's fingertips. 

Information actually hasn't become easier to find. Many things have become more broadly accessible (although people tend to overestimate the extent to which this is actually true) but that doesn't make it easier to actually extract the information you need from something. To take an example from my own work, it is convenient (and actually pretty unusual) that someone scanned a bunch of county records that are relevant to my research and put them on a website. However, they aren't indexed. If they weren't online, it isn't like I wouldn't know where to find them. The originals are in the state archives like the rest of the surviving county records. It saves me a trip, but not the actual work of trying to go through these things.

[Kron3007]

Technology makes us more connected and gives us greater access to information, it makes some things quicker, but with the exception of the new computer and digital media employment sectors not that much has actually changed. 

Think about it: lawyers are still lawyers but instead of using a law library they use Westlaw or some other database; their admin assistants type on PCs, not electric typewriters; and their clients quite possibly found them through the Internet---although it may have been advertising, word of mouth, or the regional Bar Association as in the olden days, but everything else is pretty much the same.  Students need to know MSWord, PowerPoint, Excel, and basic email functions; Photoshop and some program that allows them to design webpages are pluses (a small, new skill-set, in other words)----otherwise the jobs they do are very, very much like the jobs we did back in the 1980s, just updated to new technology.

We could say this about orchestra conductors, mechanics, stock brokers, professors, etc. The professional world where one wields one's college degree is still very much the same, even if it is somewhat more complicated.  I like to tell my students about going door-to-door and peddling my resume to irritated receptionists and then going into HR offices and looking for the cork-boards with job postings on little cards tacked to them; after that, however, the experiences students will have today are very much like the experiences I had back then---from the interview onward.  The world is simply not that much different than it was in 1980.  It's simply not. 

And as I posted, how else are we to gauge the ROI of a college degree but over the long haul?  Can we predict outcomes based on data that starts in the 1980s and extends until today?  Maybe.  Probably.  We don't know what the future holds.  We do know what the data presents to us now, presuming the methodology is solid, which is another debate.

Much is the same, but much has changed.  I suppose it depends on what you are doing.  It's also true that a BSc would open more doors in the 80s than it would today, which could also impact the value of any degree.  I'm not saying life is day and night different, but I can tell you for certain that doing a literature review now compared to when I was an undergrad is day and night.  In the 80s, running a simple regression would require punch cards and access to a central computer, now I can (and am expected to) do much more complex analyses from my office computer.  This alone has changes how we design experiments and look at data.  It is a pretty big shift in my world. 

I think the answer to calculating the ROI on a college education is that we shouldn't, or at least not to this level.  I have the same argument when people say that college grads in general make X amount more than non-college grads.  Correlation does not mean causation, and people who choose (and are able) to go to college tend to have a completely different outlook than those who dont and may have earned more regardless of this education.  Obviously there is likely a benefit to going to college, but you cant use this data to quantify it.     

[Kron3007]

Technology has a lot of impacts, and not just on the factors you mention. This isn't just a matter of new fields emerging, it is about technology impacting everyone's job and the skills they need. For example, the emergence of the internet impacts how we do everything and information that used to be difficult to find (and liberal arts grads may have had some of this knowledge) is now at everyone's fingertips. 

Information actually hasn't become easier to find. Many things have become more broadly accessible (although people tend to overestimate the extent to which this is actually true) but that doesn't make it easier to actually extract the information you need from something. To take an example from my own work, it is convenient (and actually pretty unusual) that someone scanned a bunch of county records that are relevant to my research and put them on a website. However, they aren't indexed. If they weren't online, it isn't like I wouldn't know where to find them. The originals are in the state archives like the rest of the surviving county records. It saves me a trip, but not the actual work of trying to go through these things.

Some hasn't, but a lot has.  I can quite easily look up an historical event and get a summary within 60 seconds, where this would have required  a trip to the library before.  If I forget the molecular structure of glutamine, I can reach in my pocket and ask.  If I need to do some statistics, I can do more from my laptop now than would have ever been possible on a central campus computer in the 80s. 

To say that information is not easier to find now is a very narrow view.

[spork]

Lawyers might still be lawyers but the ROI of law school has become appallingly low for many. Automation is also wreaking havoc with equity and bond trading, as well as numerous other professions. I don't need a human sales clerk at Filene's or Bloomingdale's to help me select a shirt I can buy off the internet. And I wonder if the number of librarian positions at universities has held steady now that people aren't combing through physical books and journals like they used to.

[Wahoo Redux]

I can tell you for certain that doing a literature review now compared to when I was an undergrad is day and night.  In the 80s, running a simple regression would require punch cards and access to a central computer, now I can (and am expected to) do much more complex analyses from my office computer.  This alone has changes how we design experiments and look at data.  It is a pretty big shift in my world. 

My point exactly.  You do exactly the same things you used to, just speed and information access have become much better.  We simply have more and better tools than we had before.

Not only does college force people into using these tools and these skills, but the overall skill-set that was taught 40 years ago is still applicable today.

I think the answer to calculating the ROI on a college education is that we shouldn't, or at least not to this level.  I have the same argument when people say that college grads in general make X amount more than non-college grads.  Correlation does not mean causation, and people who choose (and are able) to go to college tend to have a completely different outlook than those who dont and may have earned more regardless of this education.  Obviously there is likely a benefit to going to college, but you cant use this data to quantify it.   

Firstly, education is not simply about financial return on investment.

Secondly, why can't we use this information to quantify the benefits of going to college?  I hear that business about cultural capital, personal choice, family connections, etc. a lot---yet proof of these factors is itself pretty hard to quantify unless we can look into an alternate dimension to see our exact doubles in a mirror world without their college degrees.   

Thirdly, the numbers indicate tremendous value to a college education, as with this study.