The college movement and its critics
IT IS NO secret that the average educational level of Americans has changed drastically over the last century. At the end of the 19th century, there were far fewer high school graduates, relative to the population, than there are college graduates today. Indeed, high school graduates were viewed in much the same light then as college graduates are now. In 1893, an influential committee on secondary schooling headed by Harvard president Charles Eliot wrote that the main function of secondary school was to “prepare for the duties of life that small proportion of all children in the country – a proportion small in number but very important to the welfare of the nation who show themselves able to profit by an education prolonged to the eighteenth year, and whose parents are able to support them while they remain so long at school.”‘
At the turn of the century, the median educational level of white males was eighth grade, and high school graduation was rare. It wasn’t till midcentury that a majority of young people completed high school. In 1950, for example, 53% of 25- to 29-yearolds were high school graduates, and 8% were college graduates. At the time, a high school diploma was generally regarded as the achievable standard required to get a good job and support a family.
Today, “some college” in either a twoor four-year school has become the norm. In 1997,57% of young people aged 25 to 29 had at least some college. Many consider a bachelor’s degree essential to economic success, and some foresee a day when four years of college will be the accepted standard for educational attainment, much as a high school diploma was in 1950.
Yet some observers believe that there is too much emphasis today on getting a college education. For example, William Goodling (R-Pa.), who chaired the education committee in the U.S. House of Representatives, has remarked: “We’re overselling college: the four-year traditional conception of a college education.” Similarly, Robert Reich, former secretary of labor, has argued that “too many families cling to the mythology that their child can be a success only if he or she has a college degree.” Others expressing such reservations include Washington policy experts Samuel Halperin, Jack Jennings, and Diane Stark Rentner; professors Kenneth Gray and Edwin Herr of Pennsylvania State University; and journalists Richard Harwood of the Washington Post and Rochelle Stanfield of the National Journal. James Rosenbaum, a sociologist at Northwestern University, argues that “college for all” has become the norm in high schools, though many students are not prepared even for two-year colleges. We call the widespread expectation that almost everyone will attend college “the college movement.”
The critics of the college movement make a number of key points:
Within the last several decades, people have come to expect that most or all high school graduates should go to college.
Many young people who do not have the ability or the educational preparation to perform well in four-year colleges are being encouraged to enroll anyway, and colleges have increasingly admitted students whose chances of doing well are slim.
Because many college students are not well prepared, graduation rates have become unacceptably low.
Many four-year college noncompleters do poorly in the labor market and might have been better off enrolling in two-year colleges or in occupational programs.
Many college students are burdened with accumulated debt from loans that could have been avoided or minimized by a choice of other educational and training options. This debt is especially burdensome for the noncompleters.
Many college graduates are not doing well in the labor market, either. Often, graduates find themselves in low-paying service jobs and other lines of work not traditionally associated with a college education.
What does empirical research say about these propositions put forward by the critics of the college movement? In a synthesis conducted for the National Library of Education, U.S. Naval Academy economist Eric Fredland and I examined these arguments, poring over studies conducted in the last several decades. Here’s what we found.
The Growth of College Expectations
Have people come to expect that most or all high school graduates should go to college? The answer is “yes,” if by “college” we mean either a two-year or fouryear institution. There is almost unanimity among young people on this point. Rochelle Stanfield notes that 96% of teenagers polled by Public Agenda said that going to college was important.2 Similarly, data from the National Center for Education Statistics (NCES) show that in 1992, 95% of high school seniors expected to get at least some college-level education. NCES also found that 69% of seniors expected to graduate from a four-year school. However, the closer these expectations come to actual behavior, the lower the percentages are. In 1992, some 54% of seniors planned to attend a four-year college the following fall, but just 39% actually enrolled.3
Since the 1970s, four-year college expectations have increased relative to outcomes. Between 1972 and 1992, the proportion of high school seniors who expected to complete college rose from 50% to 69%. Over approximately the same period (1973-93), the percentage of high school graduates actually completing college increased only slightly (from 24% to 27%). Furthermore, the gap between the college plans of high school seniors for the following fall and their actual enrollments grew from 2% in 1971 to 15% in 1992.
The causes of this increase in unrealistic expectations are not clear, but there are some plausible theories. James Rosen-, baum and his colleagues think that changes in guidance counseling have inflated college expectations.4 They note that in the 1960s counselors acted as gatekeepers, restricting the flow of high school graduates into college. However, criticism of this role and the expansion of open-access community colleges led counselors to change their approach. In interviews in the Chicago area, Rosenbaum and his associates found that counselors do not like giving low-achieving students bad news about their future prospects, do not think they have the authority to do so, and instead advocate “college for all.” This mindset has had negafive consequences, Rosenbaum believes. Counselors tout community college as a “second chance” for students who have not performed well in high school, pointing out that community college graduates can enroll in four-year colleges. However, the prospect of easy entry into “college” removes one incentive to work hard in high school, and low-achieving high school graduates who enter community college tend to drop out.
Kenneth Gray and Edwin Herr also think that guidance counselors are responsible for heightened and unrealistic college expectations. They found that, in 1982, 32% of the seniors in the High School and Beyond study said that their counselors urged them to go to college.5 In 1992, more than twice as many seniors in the National Educational Longitudinal Survey – 66% said that their counselors urged them to do so. Even among seniors in the bottom half of the academic rankings, 57% said their counselors recommended college.
Changes in Ability Levels
The critics that Eric Fredland and I reviewed believe that, because of the general societal enthusiasm for college, many young people who do not have the ability or educational preparation to perform well in four-year colleges nevertheless enroll in them. What do the data actually tell us about the qualifications of four-year college students and how their abilities have changed over time?
In general, there is not much evidence to support the critics’ contention that the college movement has swept large numbers of unqualified young people into fouryear schools. One NCES study found that 11% of college students were not qualified to attend and that another 13% had the minimal qualifications.6 We don’t know whether these proportions are larger or smaller than in the past. However, using scores from the ACT college entrance test, we found that the measured abilities of college freshmen fell from the mid-1960s to about 1980; after that, they increased and slightly exceeded their previous high. Other data show a similar pattern. By these measures, at least, even though enrollments have increased, college students today are at least as able as they were four decades ago.
Changes in College Completion Rates
Another part of the argument against the college movement is that completion rates in four-year colleges are lower than they used to be. We examined completion rates of four-year college entrants in 14 studies and found a modest decline – from 4 to 7 percentage points – over fixed periods of time between the mid- 1970s and the mid-1990s. However, some of this change was attributable to the fact that students today tend to stretch out their college experience more than they used to. Many graduate after six years or more, rather than in the four- or five-year periods typically used in these studies.
While the decline in completion rates has been relatively small, the proportion of college students who fail to complete is large. We estimate that almost half of four-year college entrants – more than half a million students per year – leave without getting degrees.
Outcomes for Noncompleters
Critics of the college movement argue that many college noncompleters do poorly in the labor market and would have been better off entering community colleges and occupational programs. We examined economic and other outcomes for college entrams who do not graduate and compared their performance with that of bachelor’s degree holders and noncompleters from two-year colleges.
Economic outcomes. Reviewing eight controlled studies, we compared the economic value (in earnings) of a year spent at a four-year college with that of a year at a two-year institution for those students who leave without graduating.
We found that, in general, four-year college students who left after acquiring one year of credits could expect to receive earnings lower than or equal to those of similar two-year college students with the same number of credits.
One study found that four-year college noncompleters who earned a year’s worth of vocational credits had relatively high earnings. A second found that even six months of vocational training in government, military, or off-the-job programs yielded short-term wage benefits equivalent to those of a year or two of college. However, other studies showed complex outcomes of postsecondary vocational training that varied by study and (inconsistently) by gender and type of program.
Clearly, the critics of the college movement have a point in questioning the economic value to noncompleters of attending a four-year college. From an economic standpoint, two-year college is a good alternative, and postsecondary vocational training seems to hold promise, if programs are carefully selected.
Cognitive skills and student debts. Fouryear college noncompleters might have done well to consider attending two-year colleges for other reasons, as well. Studies by Ernest Pascarella, Patrick Terenzini, and others have shown that a year at a community college produces about the same gains in cognitive skills as a year at a fouryear college? Furthermore, an NCES study shows that noncompleters from four-year institutions are much more likely than their counterparts in two-year institutions to leave school with some debt.’ While the repayments are not large, this difference nevertheless adds weight to the critics’ argument that four-year college noncompleters might have been better off attending community colleges.
Outcomes for College Graduates
Even college graduates are not getting the expected payoff from college, according to critics of the college movement. They argue that many graduates find themselves in low-paying service jobs and other lines of work not traditionally associated with a college education. To assess this argument, we examined the changing occupational distribution of college graduates and their earnings, premiums, and rates of return on investment in college.
Occupational change. Have college graduates increasingly had to take jobs previously held by high school graduates and dropouts, as some critics contend? Researchers have defined “college-level” or “noncollege-level” jobs in a variety of ways. Some NCES surveys leave the definition up to the respondent. Other studies, such as those by Daniel Hecker and by John Tyler and associates, define them according to occupational categories from the Census Bureau.’ Still others, such as a study by Frederic Pryor and David Schaffer, define them in terms of the education level of the jobs’ incumbents.”
Regardless of definition, the data from these studies show an increase in the proportion of college graduates in non-college-level jobs in the 1970s and into the 1980s – but, in all but one category, they show no additional increase after the mid1980s. Indeed, by the mid-1990s, the percentage of college graduates holding noncollege-level jobs had begun to decline for younger men and women, though they had not returned to their 1970 levels. The singular exception is that the proportion of older male graduates holding non-college-level jobs continued to increase, perhaps because of corporate restructuring and a lack of up-to-date technical skills.
The change in types of jobs held by college graduates over the past quarter century has been real, but not dramatic. Based on Pryor and Schaffer’s data, Eric Fredland and I found that, between 1970 and 1994, there was a net shift of about 15% of college graduates from college-level jobs (mean education level of workers at or above 14.6 years) into lower-level jobs. Most of this shift (more than two-thirds of the 15%) was into what might be called “community-college-level” jobs (12.1 to 14.5 years of education). By 1994, about one in 10 college graduates were in jobs in which the mean educational level was a high school diploma or less. The rest were in collegelevel or “community-college-level” jobs.
Pryor and Schaffer also found that college graduates in lower-level jobs had adult literacy scores that were much higher than the average for those jobs. Furthermore, all the studies we examined found that college graduates earned more than high school graduates at the same occupational level and that their earnings advantage increased over time. It’s clear that there has been a shift in the distribution of college graduates across occupations over the last several decades, but it’s not clear that great numbers of graduates are wasting their time in jobs that do not require their skills – i.e., that they are “overeducated” or “underemployed.” If they were, why would employers be willing to pay them more than high school graduates at the same job level? And why would this premium be increasing over time? The college graduates’ higher literacy skills, higher pay, and increasing earnings advantage in non-college-level jobs suggest that the skill levels required by some of these jobs have risen over the years, in effect turning them into college-level jobs or nearly college-level jobs.
Economic benefits. We also assessed the economic benefits of a college education, focusing on graduates’ earnings in several forms – real earnings (adjusted for inflation), college premiums (earnings compared to those of high school graduates), and internal rates of return (earnings compared to the cost of college).
Many studies show that the average real earnings of all groups rose in the 1960s, peaked in 1973, and then fell markedly. The earnings of college graduates bottomed out in 1981 and started rising; by the late 1990s they had almost returned to their 1973 high. The earnings of high school graduates continued to fall after 1981, finally turning around only in the mid-1990s. However, as of the late 1990s, the earnings of high school graduates were still about 10% below their 1973 highs. The earnings of high school dropouts also improved slightly in the last half of the decade, but they still ended the century about 20% lower than they had been in 1973.
While earnings tell us about purchasing power, college premiums indicate how much more (in percentage terms) college graduates earn than their high school counterparts. If they earned the same or less, there would not be much economic incentive to attend college. We examined 19 studies of college premiums. The best data show that premiums were high in the late 1960s and early 1970s but fell to lows in the late 1970s. Thereafter, they increased sharply. In the late 1980s the rate of increase slowed, but the premiums remained well above their previous highs.
The decline in the college premium in the 1970s engendered a lengthy debate about the value of a college education. Critics such as Richard Freeman and Boris Blai argued that an oversupply of college graduates had reduced the value of a college education and was creating dissatisfaction in the workforce.”
In retrospect, the declining college premiums of the 1970s were a temporary deviation from a pattern of long-term increases. There was indeed an oversupply of college graduates at the time, caused in part by the disparity between heightened expectations of economic returns from college and by the realities of an economy in recession. The oversupply itself was also caused in part by a temporary non-market incentive. Draft deferments for college students during the Vietnam War boosted college attendance by young men and drove up the supply of graduates. The deferments ended in 1973. Allowing for four years of college attendance and several years in the labor market, the end of deferments is consistent with the upturn in college premiums after 1979.
What accounts for the growth in the college premium? Our review of the literature on economic inequality (which focuses on explaining changes in the college premium) found three main reasons. First, the growth of technology has increased the demand for college-level skills relative to that for high school-level skills. Second, the emergence of global competition – especially competition from low-wage workers in other countries – also tends to increase economic inequality. However, this appears to be a less important factor. Third, changes in institutional interventions in the economy – such as the decline of labor unions and a shrinking minimum wage – also play a role in the growth of college premiums, though not a large one.
While college premiums indicate how much college graduates earn relative to high school graduates, they don’t necessarily tell us whether college is a good investment. To know that, we need to assess the benefits of a college degree in relation to the costs. The internal rate of return (IROR) does this. Typically, the IROR of a college degree is the difference between the additional dollar cost and the additional earnings benefit of college (over those of high school completion), expressed as a percentage of the cost.
Across 17 studies, we found that the average private rate of return was about 12%, after controlling for inflation. This compares favorably with the rate of return on stocks, viewed over a 50-year period, which was about 11% in nominal terms. However, inflation rates averaged around 5% or 6% a year, thus reducing the real yield of stocks to 5% or 6%.
Internal rates of return, like premiums, are based on earnings. They don’t take account of other sources of income, such as fringe benefits, interest and dividends, rents, and so on. Several estimates suggest that the monetary value of all the benefits of a college degree is at least twice the value of the internal rate of return. So college looks like a very good investment – at least for those who graduate.
The critics of the college movement are correct on some major points. The great majority of high school seniors do expect to go to “college,” though far fewer enroll in four-year schools, and still fewer graduate. Almost half of those who enter college each year – more than half a million – leave without graduating, and their labor market performance is unimpressive. On the other hand, there has been no longterm decline in the measured ability of college students and no serious drop in completion rates. Most important, though, college graduates are doing very well in the labor market.
These findings have implications for prospective and current college students. First, it seems obvious that high school graduates enrolling in four-year colleges should do everything in their power to complete their bachelor’s degrees.
Second, low-achieving high school graduates who are thinking of enrolling in a fouryear college, especially to pursue a liberal arts major, would be well advised to consider enrolling in a community college. A typical low-achieving graduate who chose a community college would slightly reduce his or her (already low) chances of ever getting a bachelor’s degree but would probably realize the same cognitive gains and the same or greater earnings at less cost and with less debt than if he or she chose a four-year college and didn’t graduate. Another option might be to enroll in a carefully selected postsecondary vocational program.
Third, high school guidance counselors should give more realistic advice to lowachieving high school graduates. Rather than advocate “college for all,” they should be explicit about a student’s options after high school and the likely consequences of a given selection. Attending a community college for a year or more will probably pay off in a modest way; earning an associate’s degree will probably yield greater benefits. Vocational training may be worthwhile, but careful attention must be paid to the type, quality, and cost of the program and to the labor market. Whatever option they choose, students should understand that there is no free pass to a good postsecondary education. As a ruled working hard in high school improves achievement, higher achievement levels improve the quality and duration of postsecondary education, and the quality and duration of postsecondary education improve economic and other outcomes.
Throughout most of the 20th century, the growth of technology – including new equipment and more efficient ways of producing goods and services – has increased the demand for skills. In general, the nation has responded to this growth in demand by adding more years of education. We must ask ourselves how long this process can continue. Will most workers a century from now have doctoral degrees? It’s possible, but there are reasons for thinking that future educational responses to the growing demand will be more diverse.
Adding years of education becomes increasingly expensive as individuals forgo more and more earnings in order to attend school. Adult continuing education and training offer one alternative by providing new work skills without the need to forgo earnings. Efforts to pack more learning and skill development into elementary and secondary schooling also offer a promising alternative. For example, Advanced Placement (AP) tests and the related AP courses enable students to earn college credits while still in high school. Some students graduate from college in three years rather than four in part by accumulating AP credits. Finally, we know that solid educational foundations improve future educational outcomes. Investments in early childhood and elementary education may increase learning efficiency later on, thereby enabling students to learn more in less time and with less effort.
Copyright Phi Delta Kappa Mar 2001
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