Leonhardt’s answer, however, raises a bigger question, which he leaves unexamined: if college is such a good investment, why aren’t more people making it?
In the included in the article is a graph showing the ratio of average hourly pay of people with college experience compared to those with a high school degree. Leonhardt concludes from this data that “from almost any individual’s perspective, college is a no-brainer.”
However, John counters that with these returns there should be an increase in college graduates. This has not been seen. To help explain this discrepancy, he responds with “two quick reasons why college may be, in practice, less of a ‘no-brainer.’”
First, as Heather Boushey and I (and, more recently, MIT economist Frank Levy and colleagues) have argued, not everyone who goes to college receives the average financial return. A non-trivial portion of college graduates earn less than the average otherwise comparable high school graduate. (In the current issue of Science, which the Upshot piece refers to, David Autor makes this same point: “Although the average college graduate earns substantially more than the average high school graduate, the least successful college graduates may earn substantially less than the median among high school graduates, and the most successful high school graduates may earn substantially more than the median among college graduates.”)
Second, as Heather and I also argued (and as Ben Casselman notes in a post today at 538), the big financial returns to college depends heavily on finishing your degree, but more than 40 percent of those who start college for the first time don’t finish within six years. Those who don’t finish have little to weigh against their lost earnings, lost years of labor-market experience, direct outlays in tuition and fees, as well as any student debt they might have acquired.
Read more here: http://bit.ly/1pyeiU3