In response, educators tried to show that certain measures of success were overwhelmingly correlated with college education. One estimate argued that college-educated men were 800 times more likely than their uneducated peers to appear in “Who’s Who,” for example.
In the 1910s, however, educators set us on the path to the present by putting a monetary value on college.
Northwestern University was one of the first to do so, in 1913, pegging the lifetime value of a college education at $25,000. Twelve years later, a dean at Boston University compiled statistics purporting to show that the average undergraduate would earn $72,000 more than his uneducated counterpart over the course of a lifetime.
Other estimates followed, most of them corroborating these figures. But skeptics remained unconvinced. The turning point came in 1928, when Walter Gifford, the president of American Telephone & Telegraph Co., decided to look into the question of whether college pays off, and he did so in a most unusual way.
Rather than simply comparing college graduates to high school graduates, he decided to test the conventional wisdom “that no matter how high a boy stands in college he will not have much, if any knowledge, immediately useful in business.”
Gifford directed subordinates to compile data on the salaries of college graduates in his workforce. Then he obtained information on their class rank in college. When he put the two data sets together, he found that class rank was overwhelmingly correlated with future earnings.
For example, someone graduating in the top 10th of their class had a 1 in 5 chance of earning a salary in the top 10 percent at AT&T. Someone in the bottom third of their class, by contrast, had less than a 1 in 20 chance of achieving similar success.
Gifford published his findings in Harper’s in 1928 under the title “Does Business Need Scholars?” The article spawned a host of subsequent studies. As one historian has observed, Gifford effectively paved the way for the idea that “the more education you have, the more money you make.”
The following year, Harold Clark, an economist at Teachers College, made the mistake of asserting that a college education would actually serve as a detriment to future earnings. This idea, which only a few years before was fairly widespread, was now deemed heresy.
The attacks came from colleges and universities, and from business. “Industrialists Defend Collegiate Education,” the New York Times announced in a headline for an article taking down Clark’s claims.