the increasing penalty for not going to college

Sociologists and economists have long written about the college-non college wage gap. People who attended college, and especially college graduates, tend to make more money than those who did not. The way this gap is usually discussed is in terms of the “returns to a college degree” or the “college premium.” For example, Hout’s (2012) excellent Annual Review piece on the subject is titled “Social and Economic Returns to College Education in the United States.” There’s something about this framing that’s always bothered me.

Back in the early 20th century, very few men attended college (and fewer women). The rate of college attendance, and graduation, increased throughout the 20th century (albeit bumpily). At this point, more 25-29 years olds have at least attended some college than not, and about a third have finished a bachelor’s degree or more. College is no longer the exception that it used to be.

College is also not perceived as optional. My understanding is that survey researchers have found that almost all high schoolers want to go to college, or at least believe that doing so is important for success.* That high school graduates fail to go to college is not easily attributable to a lack of desire. College is not just numerically normal, it’s socially normative.

For both of these reasons, it seems like talking about the “returns to a college degree” can be misleading because it suggests that attending college is a choice, and that not attending is the default. That was much more true when we had these debates in the 1960s and 1970s (around the time of the birth of human capital theory, which likely contributed to the “choice” framing).

Perhaps worse yet, I think this framing – and especially the “increasing returns to a college degree” frame – suggests the wrong trend. Increasing returns to college sounds like a situation where the base wage for a high school graduate has been flat, while the wages of the college-educated have increased. Instead, what we see is the wages for those with high school degrees falling while wages for the college educated have stagnated. The Pew Research Center published a report that frames this story nicely as The Rising Cost of Not Going to College. This chart shows how all of the increase in the college-non college gap for young adults (25-32) since 1986 comes from declines at the bottom.

To sum up: The “increasing returns to college” story makes attending college sound like a reward for a good choice, not a structured fact about unequal educational access, and it suggests a world in which college incomes are rising and non-college incomes are falling, rather than a world where the bottom is falling out. “The increasing penalty for not going to college” is a bit clunky, but (to my ear) solves those problems.

What do you all think? How should we talk about college-non college wage gaps?

* Here’s an example of the sort of evidence I’m thinking of: “95 percent of ACT-tested students from low-income families said they wish to pursue some type of postsecondary education.” That’s only students who actually took the ACT, however. Better citations for population-level data would be appreciated!

EDIT: The RDSL dataset has a nice question that speaks to college aspirations. When asked, “How far would you like to go in school?”, only 4% of a random sample of young women (aged 18-19) responded finishing high school. 95% said at least a 2 year degree, and 80% a 4 year degree or more.

Author: Dan Hirschman

I am a sociologist interested in the use of numbers in organizations, markets, and policy. For more info, see here.

6 thoughts on “the increasing penalty for not going to college”

  1. I think that any discussion of the college/non-college wage gap must account for the fact that college has not been randomly distributed, so graphs such as the Pew Research graph that the post links to have little value in and of themselves because such graphs cannot differentiate (1) wage gaps due to earning a college degree from (2) wage gaps due to having characteristics correlated with earning a college degree.

    The Annual Review linked to in the post has a nice discussion that involves both the difficulty of causal inference in this area and the plausible claim that the benefits of high school are highly heterogeneous, with college being most important for students “in the middle” (p. 386). I would recommend that sort of nuance for the discussion.

    Even if we accept the mean annual earnings in the Pew graph as entirely reflecting the return to a college degree, the gap between a high school graduate and a person holding at least a bachelor’s degree is $17,500 for millennials. However, the gap in mid-career median salaries between sociology majors and chemical engineering majors is $48,800 per year. (See here).

    The logic of this post suggests that high school guidance counselors should talk about the sociology/chemical-engineering wage gap as “the penalty for majoring in sociology.” However, I hope that the counselors would discuss with students other factors besides salary that might make sociology attractive as a field of study for certain students.

    By the way, I think that sociology already has a term that can be used to label advantages that contribute to inequality: “privilege.”

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  2. My fear this that framing college as the default might unfairly reinforce the stigma around alternative paths such as taking up a trade. “Return on investment” suggests that college is one possible path among several while “penalty for not attending college” suggests that there is no alternative. This further pressures students who would feel more comfortable in a trade school or apprenticeship (I realize the perception that tech/voke schooling already exists independent of this framing) into attending college where they don’t want to be and don’t benefit.

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  3. With regard to terminology, I prefer the term “college premium.” Very neutral. But the “choice” aspect of college varies enormously. In some professions, it is literally a requirement to get a license. Some states even require cosmetologists to attend years of post-secondary schooling. In other fields, it is obviously a choice. The arts, for example. Business is another, especially if it is not connected to a licensed trade.

    The pressures are dual – the state makes it a requirement for many professions and employers use it as a de facto IQ/conformity test. The better discussions of education take this into account.

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  4. The other nice thing about framing this as “the increasing penalty for not going to college” is that it returns attention to deteriorating labor conditions for workers with less education. Not going to college shouldn’t doom you to poverty.

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  5. Without informal networks (which people who do not go to college or have family/friends for a hookup do not have), there is no way to get a resume noticed for even a lowest level white collar job.

    I must have applied to between 50-100 office jobs in Chicago when I moved here, before I went back to school, thinking I’d just work my way up and learn as a went like they say in the movies. The only thing I landed was a web hosting company run by a couple of 24 year olds who had the management skills of a sock hop and interviewed me for the wrong position, then hired me anyway.

    Between my own experience and the literature on sheepskin effect Bryan Caplan has been referencing a lot, and the Bourdieuian and Collinsian criticisms of colleges as credentialing cartels, I’m pretty convinced college is almost all club signal. Maybe I should have just lied and said I had a degree on the resume. Maybe an audit study, hmm…

    So anyway I agree with Dan et al. that “returns to a degree” or “returns to years of education” is misleading. It’s not a production input which accrues returns at the margin, even discontinuously per completed degree. It’s an anti-productive social exclusion device, methinks.

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