Thursday, October 15, 2009

The value of school

Here's one argument that most of the benefits from school are non-pecuniary (i.e., not money):

Experiences and skills acquired in school reverberate throughout life, not just through higher earnings. Schooling also affects the degree one enjoys work and the likelihood of being unemployed. It leads individuals to make better decisions about health, marriage, and parenting. It also improves patience, making individuals more goal-oriented and less likely to engage in risky behavior. Schooling improves trust and social interaction, and may offer substantial consumption value to some students. We discuss various mechanisms to explain how these relationships may occur independent of wealth effects, and present evidence that non-pecuniary returns to schooling are at least as large as pecuniary ones

Oreopoulos and Salvanes go on to make a back-of-the-envelope calculation of the size of the nonpecuniary effects. They suggest that

about three quarters of the schooling effect on selfreported life satisfaction is due to non‐pecuniary factors. A 12 percent increase in annual earnings would then imply that the total non‐pecuniary gains are equivalently worth another 16 percent increase in earnings (for a total of 28 percent).

Causation, or correlation? I wonder if College is the thing that leads people to grow more patient, goal oriented, happy, etc. (the virtues listed in this blog post), or rather that the people who attend college are intrinsically likely to develope these virtues. Nature vs. Nurture, anyone? I personally side with Nature a bit more, and thus I think that the marshmallow test (even at an early age, our characters are well set-in and define our future SAT scores, ect.) explains alot more than what actually occurs on Campus. I feel like we are on individual paths, and it is no coincidence that those who reach college are going to learn such virtues -- they were destined to (?)!
In response to Chris I'm going to with Nurture. I believe in personal experiences in determining individual differences in behavioral traits such as being a patient, happy, goal-oriented person; whether or not there are clear distinct character-shaping experiences such as the college experience, I think it's the combination of the opportunities given at college and the little things that end up counting the most.
I think it is not just the lousy job opportunities after college, it's the debt.
Not to mention that College grads are graduating and getting less money because passing the SAT and graduation do not prepare one for real life. The sad fact is majority of young college grads don't really know what they want to be when they grow up.
Of course it is important to highlight that schooling allows you (the student) to signal to others that you have certain "characteristics" and certain value, when it comes to be selected from a pool of people.
As one who feels like he's learned much less from school than from reading the paper, this sort of research bores me. Statistics are wonderful, but I'd prefer some more direct appeals to open up access to education for those who can use it (unlike myself perhaps).
I don't think that school makes a person. I think the person is already there and schooling may bring out there strengths or weaknesses. I know so many people who are smart, happy, patient, and goal oriented that never went to school. They are maybe just goal oriented in another fashion.
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