Higher Education Misconceived

CAMBRIDGE – Ever since economists revealed how much universities contribute to economic growth, politicians have paid close attention to higher education. In doing so, however, they often misconceive universities’ role in ways that undermine their policies.

For example, US President Barack Obama has repeatedly stressed the need to increase the percentage of young Americans earning a college degree. This is undoubtedly a worthwhile aim that can contribute to national prosperity and help young people realize the American Dream. Yet economists who have studied the relationship between education and economic growth confirm what common sense suggests: the number of college degrees is not nearly as important as how well students develop cognitive skills, such as critical thinking and problem-solving ability.

Failure to recognize this point can have significant consequences. As countries embrace mass higher education, the cost of maintaining universities increases dramatically relative to an elite system. Given that governments have many other programs to support – and that people resist higher taxes – finding the money to pay for such an effort becomes increasingly difficult. Universities must therefore try to provide a quality education to more students while spending as little money as possible.

Accomplishing all three objectives – quality, quantity, and cost efficiency – simultaneously is difficult, and the likelihood of compromise is great. With graduation rates and government spending easy to calculate, educational quality, which is difficult to measure, is likely to be the objective that slips. No one need know – and thus no one can be held accountable – when graduation rates rise but the hoped-for economic benefits fail to materialize.

A second misconception by policymakers is that the only important benefit from a college education is the opportunity that it gives graduates to find a middle-class job and contribute to economic growth and prosperity. But, while this contribution is important, it is not the only one that matters.

Apart from finding a first job, college graduates seem to adapt more easily than those with only a high school degree as the economy evolves and labor-market needs change. They also tend to vote at higher rates, engage in more civic activities, commit fewer crimes, educate their children better, and get sick less frequently by adopting healthier lifestyles.

Researchers estimate that these additional benefits are worth even more than the added lifetime income from a college degree. If policymakers overlook them, they run the risk of encouraging quicker, cheaper forms of education that will do far less to serve either students or society.