Observations on life

The value of university: Our first-ever college rankings | The Economist

If it's "free", it has to be good.

If it’s “free”, it has to be good.

Bernie Sander’s wants free college tuition as if college is a magic bullet to future success and higher income. Certainly a good education is important and college graduates do have advantages in employment and income, but the real magic is the drive, creativity, ambition, initiative and other qualities that go with success. The promise of free college or anything else should not be confused with future value absent the individual effort required to create that value. You may know people who graduated from the same school and took different paths and ended up in very different places.

The problem with free stuff promised by government is that many people don’t understand first that nothing is free and second that real success in anything is up to the individual. After you get your first job out of college, your education no longer matters; it’s all up to you and the results (not effort) you deliver.

Following is an interesting article which attempts to evaluate the economic value of many top colleges and universities in America. Take a look at the chart in the article. What is interesting is that many of the reported incomes could easily be earned by a highly skilled blue-collar worker.

Our first-ever college rankings

AMERICAN universities claim to hate the simplistic, reductive college rankings published by magazines like US News, which wield ever-growing influence over where students attend. Many have even called for an information boycott against the authors of such ratings. Among the well-founded criticisms of these popular league tables is that they do not measure how much universities help their students, but rather what type of students choose to attend each college. A well-known economics paper by Stacy Dale and Alan Krueger found that people who attended elite colleges do not make more money than do workers who were accepted to the same institutions but chose less selective ones instead—suggesting that former attendees and graduates of Harvard tend to be rich because they were already intelligent and hard-working before they entered college, not because of the education or opportunities the university provided.

On September 12th America’s Department of Education unveiled a “college scorecard” website containing a cornucopia of data about universities. The government generated the numbers by matching individuals’ student-loan applications to their subsequent tax returns, making it possible to compare pupils’ qualifications and demographic characteristics when they entered college with their salaries ten years later. That information offers the potential to disentangle student merit from university contributions, and thus to determine which colleges deliver the greatest return and why.

The Economist’s first-ever college rankings are based on a simple, if debatable, premise: the economic value of a university is equal to the gap between how much money its students subsequently earn, and how much they might have made had they studied elsewhere. Thanks to the scorecard, the first number is easily accessible. The second, however, can only be estimated. To calculate this figure, we ran the scorecard’s earnings data through a multiple regression analysis, a common method of measuring the relationships between variables.

Source: The value of university: Our first-ever college rankings | The Economist


Categories: Observations on life

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