Counterparties: The skills that pay fewer bills
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Nancy Folbre declared this week that the â€śgolden age of human capitalâ€ť behind us. As evidence, she points to the falling rate of return on a college degree, thanks to â€śdeclining state support, higher tuition and fees, increased inequality of access and the growing burden of debt.â€ť Further, she says, technology is making many relatively well-paying jobs obsolete as complex tasks are increasingly done by computers. But maybe that’s okay, Folbre writes. Education has an intrinsic value: itâ€™s good for society even if it isnâ€™t making us richer.
Paul Krugman notes the “skill” involved in being a skilled worker — what we now think of as a job needing a college degree — has evolved with each epoch of technological innovation. Five centuries ago, monks were highly skilled workers who copied books line by line. (Then the printing press happened). “The role of higher education as a creator of human capital came along quite late. And maybe, as Nancy Folbre says, this role is already waning,” says Krugman.
But a lower return on investment doesnâ€™t mean college is worthless. Adam Looney, a fellow at the Brookings Institution and the director of the Hamilton Project, came up with this graph last year showing the increasing difference in the employment rate and average incomes for those with and without college degrees:
The benefits of college even extend to those who donâ€™t graduate. Dylan Matthews recaps Looneyâ€™s most recent study, which finds that, on average, college dropouts makes $8,000 more per year than high-school graduates who never started college. The change in the employment rate for those with some college is also flat since the start of the recession; for those with no college at all employment rates have fallen 9%, notes Josh Brown. As Felix wrote last year, “the fact is that while this economy is undoubtedly tough for recent graduates, especially those with liberal-arts degrees, itâ€™s much, much tougher for people who donâ€™t have any degree at all.” — Shane Ferro
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