All Commentary
Monday, January 1, 2007

The More College Graduates the Better?

Higher Education Equals Credential Inflation

Many people assume the country would be better off with more college graduates.

It seems reasonable if not completely obvious. Nations where few people have much formal education tend to be poor, while nations where a lot of people have college and postgraduate degrees are generally quite wealthy. And within the United States it is indisputably true that on average individuals with college degrees earn considerably more than do those who went no further than high school. There sure seems to be a connection between formal education and economic success.

Based on that assumption, the recent, much-publicized national “Report Card” on higher education released by the National Center for Public Policy and Higher Education sounded a loud warning: “The inescapable fact is that the United States is underperforming in higher education.” The reason for that declaration is the statistical evidence that some other nations are “educating more people to higher levels.”

Especially disturbing to the writers of the “Report Card” is the fact that among young adults 25 to 34, the United States is only tied for seventh in the percentage holding an associate’s degree or higher, behind Canada, Japan, South Korea, Finland, Norway, Sweden, and Belgium. (Canada has 53 percent, the U.S. only 39 percent.) The “Report Card” leaps to the conclusion that “What is at risk is America’s future educational and economic leadership, if the nation’s younger population does not keep pace with the educational attainment levels of earlier generations and with the accelerating pace of higher education around the globe.” So we had better “invest” more to get more American students into and through college so they can meet the challenges of the “knowledge economy.”

I maintain that this is a case of crying “Wolf!” where there isn’t even a Chihuahua in sight.

The problem is that there isn’t any necessary connection between an individual’s educational credentials and his economic success; nor is there any connection at the national level. You can find individuals who dropped out of high school and make an excellent living in trades like construction work, and you can also find individuals who have college degrees who do lowly work like ushering in theatres. Internationally, you find nations that have “invested” heavily in higher education and seen their numbers of bachelor’s, master’s, and doctoral degree holders increase sharply but with no noticeable economic gain. Conversely, you can find nations where higher education has never been pushed, but where the standard of living is high. (A good contrast in that regard is between Egypt and Switzerland; the former has been putting lots of resources into education and its low per-capita GDP hasn’t budged, while the latter has the lowest college-participation rate of any advanced country but one of the world’s highest per-capita GDPs.)

But wait, some will say, the world is entering a “knowledge economy,” and surely that will put a premium on having highly educated workers. Furthermore, all good jobs will soon require a college degree—right?

Those pieces of the conventional wisdom are mistaken. Higher-level knowledge is doubtless becoming more important for some people, but the backbone of the U.S. economy will continue to consist of the same kinds of jobs as now. According to the U.S. Bureau of Labor  Statistics, the growth of demand for workers in jobs that call for no more than a high-school education will be strong. In fact, it is evident that many college grads currently wind up in “high school” jobs because a) there is such a glut of graduates and b) they managed to graduate without acquiring any important skill.

As for the idea that more and more jobs require a college degree, there is a kernel of truth to it. Employers have set a college-degree requirement for applicants for many more jobs than in the past. That, however, is rarely because the work has become so much more demanding that a smart high-school graduate couldn’t learn to do it. Instead, employers are using the degree requirement as a screening mechanism. With such a large pool of college graduates available, they can afford to shut out people who ended their formal education at high school. The degree requirement has nothing to do with skill or knowledge (usually, any degree suffices) but is merely a filter against the presumably harder-to-train high-school grads.

Professors James Engell and Anthony Dangerfield hit the nail on the head in their book Saving Higher Education in the Age of Money when they wrote, “[T]he United States has become the most rigidly credentialized society in the world. A B.A. is required for jobs that by no stretch of imagination need two years of full-time training, let alone four.” Relentlessly promoting higher education doesn’t give us a better-skilled workforce; it just gives us credential inflation.

The higher-education establishment would like people to believe that college students eagerly absorb a great amount of knowledge that they employ after graduation to greatly enhance their productivity in the “knowledge economy.” Yes, there are some students like that. But many others enter college with poor basic skills and leave without much improvement. The recent National Assessment of Adult Literacy, released about a year ago, found that just 31 percent of college graduates could be regarded as proficient readers. The decline in that number from the assessment done in 1992 is compelling evidence for something that many professors quietly admit, namely, that academic standards have been falling.

Debasing Credentials

They have been falling because many colleges and universities are content to enroll students with weak academic ability and little interest in educational pursuits. Having coasted through their K–12 schooling where, for the most part, teachers are imbued with the “progressive” notion that building students’ self-esteem is crucial, those kids reach college expecting the same thing. They expect high grades for minimal work and to get a college degree just for showing up. Because most schools are hungry for revenue, they try to keep such students content by relaxing standards so they won’t drop out or transfer. Thus the benefit of higher education for the best students is reduced to allow poor ones to obtain a debased credential.

Coming back to the alleged need to keep up with the Joneses educationally, if other countries benefit from increased rates of college participation, fine. The United States isn’t in a race with them where “leadership” is crucial. We ought to abandon the tribalistic mindset that sees success by others as a threat. More productive firms in, say, Finland or Belgium won’t imperil the American standard of living. Maybe the countries that are “leading” us haven’t yet reached the point of diminishing returns on higher education, but we certainly have.

American prosperity does not depend on educational central planning by the government that attempts to maximize the number of college-degree holders. Individuals, often aided by their employers, will make the optimal human-capital investments without any subsidization.

What our prosperity does depend on is freedom. The most prosperous nations are that way because the government interferes comparatively little in the economy. Anyone who really cares about enhancing our standard of living should advocate widespread deregulation and the shrinkage of government spending.

  • George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.