Visiting Economics Professor David Card Asks, "Is It Worth It to Go to College?"


David Card, Economics, UC, Berkeley
(photo DA)
With rapid increases in the cost of education, everyone seems to hold some kind of opinion on the actual dollar return for a college degree. Professor David Card of UC, Berkeley presented some astounding evidence that ought to please parents and high school guidance counselors everywhere. Yes, indeed, higher education does pay off in a big way.

The Department of Economics brought Card, a concise yet lively lecturer, to present the results of his many years of research as a labor economist both in Washington and at Princeton. Professor Card, whose research on the effects of minimum wage legislation in past years actually helped bring about the recent increase in that area, presented a well-laid-out barrage of information and statistics showing that there is a direct and predictable increase in income per year of college. Each year of higher education returns about an 11 percent gain in earned wages. The "return to education" (simply calculated as the percentage gained in wages per year of school) causes salaries for college graduates to rise sharply just after graduation and to continue to rise, creating an income gap between graduates and non-college graduates that has been increasing logarithmically every year since 1978, with no sign of leveling off. Not surprisingly, the gap is slightly wider for women. According to Card's work, college graduates in the thirty-one to forty age group will earn almost double what non-college graduates will earn and will be 41 percent more likely to have health insurance benefits. College graduateshave an even higher probability of being married. These advantages continue and increase significantly into the forties and fifties and then begin to taper off as college graduates go into business for themselves or retire.

Card clearly laid out the charts and figures that substantiate this "return to education," which remains constant throughout our various populations. Card addressed the idea that there is a built-in ability bias when comparing college graduates as a group to populations that decided against college or were unable to attend for various reasons. Arguing that people who graduate from college have more inherent ability than those who do not graduate, some have charged that the correlations are spurious to some degree. Card talked about various approaches to this problem, including the "natural experiment" approach that looked at populations who have ready access to colleges and research on twins who would presumably have the same "ability level." The findings from these studies have proven that the "ability bias" is not important.

Professor Card wryly observed that the "ability bias" factor was first suggested by economists with Ph.D.s, and that all evidence continues to indicate that differences in wages earned are systematically related to differences in education. Studies in other countries and even studies using twins, who would have very similar if not identical ability levels, show that education pays off at the same predicable rate for everyone.

This distinguished UC, Berkeley professor's research supports what may be seen as a radical point of view by some, namely that despite problems in the education system and social inequalities, all our work at creating a democratic form of higher education is working. This has to be excellent information for anyone concerned about the public perception of higher education in this country.

In a population where 75 to 80 percent of us get at least some higher education Professor Card's work vigorously indicates that finishing that degree pays a substantial return no matter who you happen to be in the years immediately after graduation and throughout a professional career.

BF


Achievements| Calendar| Commentary| Exhibitions| Sponsored Projects| Other Stories| Credits
Archives| Front Page| Publications Home Page