To take a simple example, imagine a student from a low income family who is a terrific athlete. After graduation, he earns millions of dollars per year as an athlete, although the degree is irrelevant.
A better test would be to look at the recruiters that come to a campus. The same recruiters do not come to Chico that go to Stanford.
Doug Henwood wrote:
> Michael Perelman wrote:
>
> >Doug, certainly the averages have increased, but have degrees from lower
> >ranking colleges seen much of an increase in value. Many of our graduates
> >are doing jobs that high school students might have done a few decades
> >ago.
>
> That's almost true by definition, since the share of the labor force
> with college degrees has grown a lot over the decades. There's a lot
> to the Bowles/Gintis argument that college grads earn more not
> because of their great skills, but because the credential is a sign
> to employers that the worker is a good soldier.
>
> Then there's this (I haven't read the full paper, just this abstract):
>
> >Estimating the Payoff to Attending a More Selective College: An
> >Application of Selection on Observables and Unobservables
> >Stacy Berg Dale, Alan B. Krueger
> >
> >
> >NBER Working Paper No. W7322
> >Issued in August 1999
> >
> >
> >---- Abstract -----
> >
> >
> >There are many estimates of the effect of college quality on
> >students' subsequent earnings. One difficulty interpreting past
> >estimates, however, is that elite colleges admit students, in part,
> >based on characteristics that are related to their earnings
> >capacity. Since some of these characteristics are unobserved by
> >researchers who later estimate wage equations, it is difficult to
> >parse out the effect of attending a selective college from the
> >students' pre-college characteristics. This paper uses information
> >on the set of colleges at which students were accepted and rejected
> >to remove the effect of unobserved characteristics that influence
> >college admission. Specifically, we match students in the newly
> >colleted College and Beyond (C&B) Data Set who were admitted to and
> >rejected from a similar set of institutions, and estimate fixed
> >effects models. As another approach to adjust for selection bias, we
> >control for the average SAT score of the schools to which students
> >applied using both the C&B and National Longitudinal Survey of the
> >High School Class of 1972. We find that students who attended more
> >selective colleges do not earn more than other students who were
> >accepted and rejected by comparable schools but attended less
> >selective colleges. However, the average tuition charged by the
> >school is significantly related to the students' subsequent
> >earnings. Indeed, we find a substantial internal rate of return from
> >attending a more costly college. Lastly, the payoff to attending an
> >elite college appears to be greater for students from more
> >disadvantaged family backgrounds.
-- Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu