Sunday, April 20, 2008

Apples and Oranges

Maybe my brain is still warming up, but I found this comparison in Greg Mankiw's latest New York Times column puzzling:

Over the last several decades, technology has kept up its pace, while educational advancement has slowed down. The numbers are striking. The cohort of workers born in 1950 had an average of 4.67 more years of schooling than the cohort born in 1900, representing an increase of 0.93 year in each decade. By contrast, the cohort born in 1975 had only 0.74 more years of schooling than that born in 1950, an increase of only 0.30 year a decade.
So workers born in 1950 have 4.67 more years of schooling than workers born in 1900, while workers born in 1975 have 5.41 more years of schooling than workers born in 1900. Why compare workers born in 1975 with workers born in 1950? His point is that the rate of educational attainment has slowed, and that's certainly true, but there are only so many years you can spend in school! Getting a college degree takes 4 years, so we can explain the difference between 1900 and 1950 by saying that the average worker born in 1900 had a high school degree or less, while the average worker born in 1950 had a college degree. If the rate of educational attainment kept up that pace, then workers born in 1975 would have roughly 2.33 more years of schooling than workers born in 1950 -- in other words, the average worker born in 1975 would have, or would be close to having, a Master's degree! Having a graduate degree is very helpful in some professions, but not all. (My 2 graduate degrees have been very helpful, but law is one of the most skill-intensive professions in the world.) Most workers, if not all, probably benefit from having a college degree. But do most workers benefit from having a graduate degree? I'd say no. Salesmen, for example, would probably benefit more from 2 years of work experience than from 2 years in grad school. So yes, the rate of educational attainment has slowed, but what's the optimal rate? Without knowing the optimal rate, just saying that the rate of educational attainment has slowed doesn't tell us anything.