Rethinking the Rise of Inequality

Eduardo Porter:

Many Americans have come to doubt the proposition that college delivers a path to prosperity.

In a poll conducted last month by the College Board and National Journal, 46 percent of respondents -- including more than half of 18- to 29-year-olds -- said a college degree was not needed to be successful. Only 40 percent of Americans think college is a good investment, according to a 2011 poll by the Pew Research Center.

On a pure dollars-and-cents basis, the doubters are wrong. Despite a weak job market for recent graduates, workers with a bachelor's degree still earn almost twice as much as high school graduates. College might be more expensive than ever, but a degree is worth about $365,000 over a lifetime, after defraying all the direct and indirect costs of going to school. This is a higher payoff than in any other advanced nation, according to the Organization for Economic Cooperation and Development.

Still, the growing skepticism about the value of a degree has fed into a deeper unease among some economists about the ironclad trust that policy makers, alongside many academics, have vested in higher education as the weapon of choice to battle widening income disparities and improve the prospects of the middle class in the United States.

It has given new vigor to a critique, mostly by thinkers on the left of the political spectrum, that challenges the idea that educational disparities are a main driver of economic inequality.

"It is absolutely clear that educational wage differentials have not driven wage inequality over the last 15 years," said Lawrence Mishel, who heads the Economic Policy Institute, a liberal-leaning center for economic policy analysis. "Wage inequality has grown a lot over the last 15 years and the educational wage premium has changed little."

Posted by Jim Zellmer at November 14, 2013 12:35 AM
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