Unpacking degrees

Chris Dillow questions the purpose and value of a university degree (linked from Observational Epidemiology):

What is university for? I ask this old question because the utilitarian answer which was especially popular in the New Labour years – that the economy needs more graduates – might be becoming less plausible. A new paper by Paul Beaudry and colleagues says (pdf) there has been a “great reversal” in the demand for high cognitive skills in the US since around 2000, and the BLS forecasts that the fastest-growing occupations between now and 2020 will be mostly traditionally non-graduate ones, such as care assistants, fast food workers and truck drivers; Allister Heath thinks a similar thing might be true for the UK.

Nevertheless,we should ask: what function would universities serve in an economy where demand for higher cognitive skills is declining? There are many possibilities:

– A signaling device. A degree tells prospective employers that its holder is intelligent, hard-working and moderately conventional – all attractive qualities.

– Network effects. University teaches you to associate with the sort of people who might have good jobs in future, and might give you the contacts to get such jobs later.

– A lottery ticket.A degree doesn’t guarantee getting a good job. But without one, you have no chance.

– Flexibility. A graduate can stack shelves, and might be more attractive as a shelf-stacker than a non-graduate. Beaudry and colleagues decribe how the falling demand for graduates has caused graduates to displace non-graduates in less skilled jobs.

– Maturation & hidden unemployment. 21-year-olds are more employable than 18-year-olds, simply because they are three years less foolish. In this sense, university lets people pass time without showing up in the unemployment data.

– Consumption benefits. University is a less unpleasant way of spending three years than work. And it can provide a stock of consumption capital which improves the quality of our future leisure. By far the most important thing I learnt at Oxford was a love of Hank Williams and Leonard Cohen.

As the signaling function of the degree falls, we should consider how the signaling power of certificates, competencies, and other innovations may rise to overtake it. With specific knowledge and skills unbundled from each other, these markers may be more responsive to actual demand. More specific assessment metrics can help stakeholders better evaluate different programs of study, while more flexible learning paths can help students more efficiently pursue the knowledge and skills that will be most valuable to them.