Tagged: college grads

The Case for Making College Free

One hundred years ago, the US was in the early stages of its push to make high school universal and free. This policy was heavily criticized in Europe, where it was believed that high school was wasted on many – particularly on girls – and that most children should simply enter the workforce after 8th grade. The US did not relent, and high school graduation rates shot up from 5% in 1905 to reach 50% by 1940.

The experiment was a grand success. Economic historians attribute the superior expansion of the US economy in the 20th century to “the High School Movement,” which endowed the country with a far more educated labor force, allowing workers to learn new skills more easily, and thus move more readily between fields, as the US rapidly evolved into a complex, modern economy.

It took them awhile, but the rest of the world figured this out, and free, universal high school has become a commonplace. However many countries did not stop there, and now offer a free college education to qualifying students as well.

Following WW2, with the GI Bill, the US also started graduating many more young adults from college than any country in the world. But that competitive edge is rapidly disappearing. While the US is still at or near the top in college grads, a closer look at the data affords us a glance into the future. Among the older generation – men aged 55-65 – the US still has a far greater proportion of college grads than any country in the world. However among young people, particularly aged 25-35, the US has fallen behind many countries, and the trend lines are steep enough that the US may fall to the middle of the pack within a few decades.

The science of economics has improved much over the past 100 years. While the High School Movement required a giant leap of faith, economists today dont have to speculate on the value of a college education. It can be calculated by comparing the difference in wages between people with a college degree and people without one, controlling for as much as one can. The resulting value is the college wage premium. That premium is now higher in the US than in any developed country in the world, and the highest it’s been since the 1920s.

That enormous college wage premium is the voice of the labor market, shouting that it is so starved of highly-educated workers, that it is bidding their wages up to higher and higher levels. The message could not be any clearer: the US economy needs more college grads, needs them now, and will pay top dollar for them.

An excellent question to ask is why people arent responding to this signal and staying in school longer. The short answer is that education is one of those sectors that doesnt function very well within the free market system. That’s why governments, for centuries, have been in the education business. Public provision of pre-K and K-12 proceeds from the same logic as West Point and UCLA.

One can only wonder at how posterity will judge the US, which today has no federal public university system beyond its twenty-odd military schools. By comparison, many European countries have nationally-run and -funded public university systems. And so the Liberal Field Guide goes beyond President Obama’s call for free community colleges. The US Government should itself establish a system of Federal Universities, with a presence in all fifty states, and all major urban areas, and should offer a free four-year degree to any student meeting its admission standards.

 

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