Angst for the educated
A university degree no longer confers financial security
Sep 3rd 2011 | from the print edition
MILLIONS of school-leavers in the rich world are about to bid a tearful goodbye to their parents and start a new life at university. Some are inspired by a pure love of learning. But most also believe that spending three or four years at university—and accumulating huge debts in the process—will boost their chances of landing a well-paid and secure job.
Their elders have always told them that education is the best way to equip themselves to thrive in a globalised world. Blue-collar workers will see their jobs offshored and automated, the familiar argument goes. School dropouts will have to cope with a life of cash-strapped insecurity. But the graduate elite will have the world at its feet. There is some evidence to support this view. A recent study from Georgetown University’s Centre on Education and the Workforce argues that “obtaining a post-secondary credential is almost always worth it.” Educational qualifications are tightly correlated with earnings: an American with a professional degree can expect to pocket $3.6m over a lifetime; one with merely a high-school diploma can expect only $1.3m. The gap between more- and less-educated earners may be widening. A study in 2002 found that someone with a bachelor’s degree could expect to earn 75% more over a lifetime than someone with only a high-school diploma. Today the premium is even higher.
But is the past a reliable guide to the future? Or are we at the beginning of a new phase in the relationship between jobs and education? There are good reasons for thinking that old patterns are about to change—and that the current recession-driven downturn in the demand for Western graduates will morph into something structural. The gale of creative destruction that has shaken so many blue-collar workers over the past few decades is beginning to shake the cognitive elite as well.