Representing economic research to the public is a difficult exercise; results can be subtle and come with a lot of qualifications. What’s more, the research tends not to come with guidelines for how to apply the results to real-world public debates — that’s a pundit’s job. Thus, it’s inevitable that pundits will sometimes make mistakes.
Tim Bartik, an economist at the Upjohn Institute for Employment Research, recently took journalism professor Ellen Ruppel Shell to task on Twitter for alleged misrepresentations of his research with colleague Brad Hershbein. Shell’s New York Times op-ed entitled “College may not be worth it anymore,” argued that the monetary returns to higher education are much lower for poor families than for middle-class or rich ones.
As Bartik points out, he and Hershbein found that the college earnings premium — the lifetime difference in earnings between those who get a bachelor’s degree and those who only finish high school — was substantial for people from all income backgrounds:
For people from families below 185 percent of the poverty line, a 71 percent earnings premium translated to a lifetime income boost of $335,000 — hardly something to sneer at, and much more than the cost of most college degrees. And interestingly, for people from families actually below the poverty line, Bartik and Hershbein found a very large premium of 179 percent, although their estimates are less precise.
Also, as Bartik notes, the class difference Shell cites doesn’t exist for black people, or for women. The researchers found that black people from low-income backgrounds who earn college degrees actually earn $408,000 more during the course of their lives than white college graduates from similar class backgrounds. So by downplaying the value of a college degree, Shell and others could be doing a great disservice to disadvantaged minorities.
Of course, the college wage premium doesn’t mean that getting a degree will automatically boost your income by the given amount. Some fraction of that extra income is probably just due to the talent and work ethic needed to graduate. And your major matters too — earnings are substantially higher for STEM, health-care and business majors than for arts and humanities majors. So Bartik and Hershbein’s research doesn’t provide a perfect answer to the question of “Should I go to college?” Still, for most people, it’s probably worth it — as long as you can graduate.
But Shell’s op-ed also touched on an important point that discussions of the college premium sometimes ignore — the college system may be increasing inequality. This can be seen in Bartik and Hershbein’s numbers for the lifetime incomes of graduates from various backgrounds:
For poor people, Bartik and Hershbein found a very large college earnings boost, so at the lower end of the distribution, college probably works to reduce inequality. But in dollar terms, people from the upper classes get the biggest boost of all — more than $1 million in extra lifetime earnings.
To the extent that this premium represents a causal effect, it means that college degrees actually increase the total income gap between the upper class and the middle class. Bartik and Hershbein found that the difference is largely driven by white male college graduates from well-off backgrounds:
College graduates who come from high-income families … particularly men and whites and those who get graduate degrees, have a much higher chance of accessing the top of the earnings distribution than otherwise similar individuals who come from poorer families.