(cross-posted at www.my168hours.com)
A generation ago, a college degree was the ticket to a comfortable, upper-middle class existence. We believe, as a society, that more education means more income, and in general this is still true. The unemployment rate for college educated people is much lower than for people with less education.
But the returns on a college education have been declining for some time, even as costs have skyrocketed. A college degree is no longer a guarantee of a comfortable existence. Why is this?
Perhaps it is because more people are going to college -- and we cannot all, alas, earn more than average.
But the American Enterprise Institute released an interesting report this month claiming that part of the problem may be how college students spend their time. According to various time diary studies analyzed by researchers Philip Babcock and Mindy Marks, in 1961, students at 4-year colleges spent 24 hours per week studying. By 2003, this had fallen to 14 hours per week.
There could be many plausible explanations for this besides laziness. Perhaps students are working more to pay for school. Perhaps they have more family responsibilities. Perhaps, as the first in their families to go to college, they are facing other obstacles. Perhaps, as more Americans go to college, more people are attending schools that don't require as much study. Perhaps we are majoring in topics that require less study, or perhaps technology has made learning more efficient.
The authors look at each of these explanations, and find that most don't hold up. Students are working more, but even among students who are not employed, study hours have fallen. They have fallen among students whose fathers also went to college, and they have fallen within majors. They have fallen among students who attend the most selective colleges. While it is true that the Internet and word processing make writing papers easier, the bulk of the decline in study hours came prior to the 10 years before the 2003-2005 numbers. It really just appears that students are studying less.
Why? Given that students are paying so much more for college these days (in many cases shouldering staggering debts) you'd think they'd have more skin in the game. The authors posit that perhaps college has become a signaling device for employers -- the fact that you got a degree is more important in the job market than your actual grades. You can work hard in high school to get in, and then coast after that. Perhaps grade inflation contributes to this as well. If you know you'll get an A or a B in most classes, why put in more work, particularly if employers don't care about your grades?
These explanations make sense, but there's a problem with this trend because when you study less, you learn less. And the authors note that there's evidence that when you study less, you earn less too. Which would explain why the returns on a college education are declining.