Question
What is the ROI on the average 4-year degree from a US college?
Answer
Am adding this link for additional context.
http://www.theatlantic.com/busin...
Dan Zhang's numbers are for a 30-year ROI. They look believable for the last 30 years, though the spread across majors is going to be huge. Stanford engineering vs. Stanford Art History is a bigger gap than Stanford engineering and (say) Cornell engineering about nine ranks down.
In the next 30 years though, this picture is going to slowly turn into nonsense. The average may still be positive ROI for top schools, but I suspect the median will start to plummet. The top 10% of grads will go on to a charmed life in the remaining stable career paths, but the majority will be in for a round of Russian roulette. There just isn't enough ongoing economic growth for this lot to participate in. Which means only those who acquire some entrepreneurial skills, which schools can't really teach cost-effectively IMO, can beat the odds by creating their own local economic growth rather than being limited to participating in broader growth. Basically without a rising tide, all boats cannot float. Only the shallow-keeled ones. Education debt is like a deep keel.
The ROI will remain positive for vocational education in growth areas that cannot be moved to China, but liberal arts, science and engineering (which is really like a liberal art these days, intellectually), will be hit hard. In America at least, law and medicine, the two big higher-end vocational type paths will remain positive ROI.
But it will take a long time for people to get this. We're too used to looking at averages under bell-curve assumptions to parse a world run by other distributions where medians tell a very different story.
http://www.theatlantic.com/busin...
Dan Zhang's numbers are for a 30-year ROI. They look believable for the last 30 years, though the spread across majors is going to be huge. Stanford engineering vs. Stanford Art History is a bigger gap than Stanford engineering and (say) Cornell engineering about nine ranks down.
In the next 30 years though, this picture is going to slowly turn into nonsense. The average may still be positive ROI for top schools, but I suspect the median will start to plummet. The top 10% of grads will go on to a charmed life in the remaining stable career paths, but the majority will be in for a round of Russian roulette. There just isn't enough ongoing economic growth for this lot to participate in. Which means only those who acquire some entrepreneurial skills, which schools can't really teach cost-effectively IMO, can beat the odds by creating their own local economic growth rather than being limited to participating in broader growth. Basically without a rising tide, all boats cannot float. Only the shallow-keeled ones. Education debt is like a deep keel.
The ROI will remain positive for vocational education in growth areas that cannot be moved to China, but liberal arts, science and engineering (which is really like a liberal art these days, intellectually), will be hit hard. In America at least, law and medicine, the two big higher-end vocational type paths will remain positive ROI.
But it will take a long time for people to get this. We're too used to looking at averages under bell-curve assumptions to parse a world run by other distributions where medians tell a very different story.