Tuesday, June 28, 2011

College as Suicide Gamble

On the subject of the dubious value of a college degree, Richard Posner writes:
...the more interesting question is whether Krugman is right to be pessimistic about the future returns to a college education. The market disagrees. If the market agreed with him, college enrollments would be plummeting because college is expensive, not only in tuition but also in opportunity costs—the income forgone by being in school. College enrollments continue to increase relative to population, and, more important from a market perspective, more and more high-school students express a desire to go to college, even though if Krugman is right their college education will not produce lifetime earnings increments sufficient to offset the cost of tuition and the cost of their forgone earnings during their college years. [Emphasis mine.]

Posner admits that the market could be wrong:

A high school student, and his parents, are hardly in a good position to predict the structure of the labor market in ten or twenty years. Most people base most of their expectations for the future on simple extrapolation from the recent past. Often that’s the best one can do in the presence of profound uncertainty.

Poor information and uncertainty may be part of it, but I think the Becker-Posner model of effective suicidality (truncated utility function) could apply here. It is not necessarily that young people predict that a college degree is a good investment; it is that life without a college degree, for many middle-class people, would be an unimaginable humiliation, on the level of social death. We bet on education to establish social belonging, and we are not sensitive to the serious bad consequences entailed by failure, because not taking the risk leaves us in a position worse than death. It's simply unthinkable.

In fact, the increasing prevalence of college education itself makes college ever more "required" for one's social belonging and self-respect. In effect, it raises Id (reduces utility for a given income) across the population (even for people whose utility functions are not truncated, which leads to misery at higher levels of income). Society as a whole is on a hedonic treadmill.

When I was a freshman at MIT, Noam Chomsky told a small group of us that college was where society was storing us to hide the fact that there wasn't enough meaningful work to go around.

11 comments:

  1. I really like the term effective suicidality used in this post and last - I've always wondered myself why far more people in the world weren't suicidal given their social status and options. Now I think that whether these people think suicidal thoughts or not is inconsequential - the suicidal behaviour that can be seen from their actions effectively solves the paradox.

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  2. I never did get to go to college/university but I drove myself half-mad trying to get there even though I doubted it would do me any good. I’ve met a few people who went through the process and some have admitted to me that they felt the same. I almost feel lucky that I escaped what some of them experienced.

    What-to-do-with-life is a problem that doesn't go away. I've jumped from one futile idea to another, suspecting the futility right from the start but having no other options. The "effective suicidality (truncated utility function)" really does strike a chord.

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  3. In my home country Ireland university education was made free around 20 years ago. The only entrance necessity was the attainment of a certain amount of points based on one's final school exams. Since then attending university has become almost as much a routine part of people's lives as attending secondary school. As a result, the utility value of a degree has diminished significantly, while still maintaining its social status amongst the upper and middle classes. Ridiculously (and a further sign of the dumbness of people generally) in the midst of Ireland's recent economic meltdown, people were baffled as to how such a crisis could envelop such a "well-educated" workforce. Now the governemnt are talking up the fact that most people have a third-level education in their attempt to resell the country as an attractive base to foreign investors. Furthermore, the government rewards the universities financially for every degree granted, so inevitably courses are dumbed down and just about everyone gets a degree. To use that delightful American phrase, go figure!

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  4. The Chomsky quote reminds me of the John Gray quote:

    >At the beginning of the twenty-first century, a new phase of the Industrial Revolution is under way that promises to make much of that population superfluous. We are approaching a time when almost all humans work to amuse other humans. In rich countries, that time has already arrived. ... A thriving economy of psychotherapists, designer religions and spiritual boutiques has sprung up... The function of this new economy, legal and illegal, is to entertain and distract a population which - though it is busier than ever before - secretly suspects that it is useless.

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  5. What-to-do-with-life is a problem that doesn't go away.

    Amen.

    Karl, your comment reads like an abstract for an incredibly interesting economics paper. Funny, reading your comment I was just thinking about how many brilliant Irish-born people I know - but they're all here in the US. Brain drain!

    I need to read more John Gray.

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  6. Gray:We are approaching a time when almost all humans work to amuse other humans. . .The function of this new economy, legal and illegal, is to entertain and distract a population which - though it is busier than ever before - secretly suspects that it is useless.


    Why is working to amuse others useless? TV is more important than food, after all, so if providing food is not useless, then isn't providing entertainment even less useless?

    I don't have the context to the Gray quote, so I won't assume that he agrees that the work is useless, but if the population indeed suspects it is useless, then this is simply an unforced error. Attitudes may change automatically as people get raised by parents who work in the service sector rather than in agriculture or manufacturing.

    And I don't think there's anything inherently more meaningful about building refrigerators than there is about making refrigerator magnet poetry.

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  7. @JasonSL

    I think it’s partly because criticism coming directly from the “customer” has a very personal aspect to it that hits hard and isn’t easily diffused. Workers can talk amongst themselves about a mean boss and in turn that will nurture workplace community. Talking about personal experiences of abusive customers can have some therapeutic value but it isn’t as concrete – there will always be a “me vs customer” component to it and it leaves room for second guessing one’s actions. "Us vs the boss” can at least enforce an opinion of self-worth because it isn’t just one person who has that opinion of the boss.

    I don’t think the sense of uselessness will disappear. Each generation will have to learn to deal with these subtle bits of nagging psychology as much as they have to learn to read & write. People do find ways to deal with it but I worry that some of these methods lend to the creation of delusions rather than constituting a genuine truimph.

    But as far as meaning goes in broad terms. True. Positive net utility is good whatever it is (as long as it all adds up to that). All power to poets of positive utility.

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  8. @Sister Y et al:

    The quote is from Gray's magnum opus Straw Dogs, an absolute must read for anyone tilting toward a pessimistic view of life. In the meantime Gray's book reviews are available at

    http://www.newstatesman.com/writers/john_gray

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  9. "if Krugman is right their college education will not produce lifetime earnings increments sufficient to offset the cost of tuition and the cost of their forgone earnings during their college years."

    It has to be considered that many if not most college students don't pay for their own education, and I would bet that the more expensive the school, the truer this is (a high proportion of students attending, say, Ivy League schools come from wealthy families; others are awarded academic need-based scholarships). So leaving out the hypothetical lost wages over four or so years -- which for most 18-year-olds don't amount to much -- it essentially comes down to a choice between a) having someone fund not only your education but your drinking and socializing for 50 months, or b) going straight to work in a lower-paying job.

    This admittedly leaves out the apocalyptic student-loan burden some college graduates saddle themselves with, believing in their naivete or self-delusion that they will make enough money to render eventually paying these off trivial. This isn't conscious or subconscious suicidality, it's ignorance and negligence. If we extend the notion of suidical behavior to ere mconsequences with no integration of intent, then every overweight person, smoker, and sunbather in the U.S. can be assumed to be suicidal. Of course, this is perhaps your whole point -- that it's hypocritical for people to pretend there's a great boundary between passively self-destructive folks and those society rushes to incarcerate in a mental institution.

    Love the blog, anyway.

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  10. Thanks. What I am arguing for is that we at every point consider both hypotheses (ignorance/stupidity AND effective suicidality/low value of current life circumstances), looking at the evidence, not just projected introspection, to determine which is operative.

    Also, sunbathing probably prevents more cancer deaths (through increased Vitamin D) than it causes, contrary to popular wisdom.

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