Harvard Class of 1982 35th Reunion :: Science Center B :: Saturday, May 27, 2018, 10:45-12:00 noon
- Seth Lloyd, MIT: Moderator
- Brad DeLong, U.C. Berkeley
- Ivonne Garcia, Kenyon
- Noel Michele Holbrook, Harvard
- William Sakas, CUNY
- Carol Steiker, Harvard
In the spring of our freshman year, then-young economics professor Richard Freeman came to Ec 10 to tell us that going to Harvard would not make us rich.
He was wrong.
Up until 1980 America was winning, and Richard Freeman expected it to keep on winning, the race between education and technology: Thus there were ample numbers of people to take the increasing number of jobs requiring formal education for first class performance. Thus the amount the market paid you extra for taking a college requiring rather than a high school requiring job was modest: 30% or so--not enough to make up for the income you would've earned, had you taken the tuition you would not have spent and the extra wages you would have made from working, and put them into some reasonable investment.
But after 1980 America began to lose the race between education and technology.
The expansion of American higher education slowed massively. Higher education for native-born males simply froze in its tracks. As a result, in the world in which we have worked for the past 35 years employers have been betting up the relative price of college graduates: Rather than making 30% more than our counterparts who went straight into the job market after high school did, we have on average received double.
The freezing and of the relative numbers of native born American males taking advantage of hire education as demand, supply, and heterogeneity components.
On the demand-side, states withdrew tuition subsidies. Public college ceased to be free. Those whose parents were not rich worried about their student loans: what if they didn't succeed and finish and could not get one of those high paying jobs? How were they going to pay back their loans? Americans almost surely over worry about this. But people are who they are, and not who economic theory dictates they should rationally be.
On the supply side, states stopped building campuses. Getting the courses you wanted and needed at public universities became iffy: five or six years rather than four.
And on the heterogeneity side, our colleges are designed for those who take to print literacy and to Arabic mathematics like ducks to water--if you do not have that, or are not trained to have that, learning the way we are taught to teach becomes much more difficult. We economists see this every semester, as even Ec 10 requires great facility in reading, in arithmetic, in algebra, and in algebraic geometry. The extra slice of the population that we would have been sending to higher education in a better counterfactual world in which America had not lost the race between education and technology would have been less well prepared and less suited to benefit.
What is the balance between these supply, demand, and heterogeneity considerations? That, we say, is a research problem.
How important is all this? I would say that about 1/3 of the problem is with America that have developed over the past 35 years--1/3 of the ways in which I see America today falling far short of what I confidently helped America would be by now--are due to our losing the race between education and technology.
Let me make one final point: Over the past generation, Harvard has not helped. We had 1600 in our class. Last week's graduating class was essentially the same size. Worldwide, between five and ten times as many people are well-qualified to join my niece as freshmen this fall. In our class there were perhaps four times as many people well-qualified to attend as Harvard admitted. Today there are between twenty and forty. Yet Presidents Bok, Pusey, and Rudenstine seemed to have little interest in helping America and the world in the race between education and technology. Contrast that with the University of California, which, under Chancellor and President Clark Kerr and California Governor Pat Brown, set in motion the plan to clone itself across the state and increase enrollment tenfold.
If you are thinking about giving money to help America win this race with education and technology, I would not recommend Harvard. U.C. Berkeley, Columbia, and MIT for moving people whose parents' were in the bottom quintile into the top 1%. And for overall bottom fifth to top fifth mobility? CUNY. U.T.-Pan American. TCI. SUNY Stonybrook. Pace. and Cal State-LA. That is what Yagan, Turner, Saez, Friedman, and Chetty say… https://www.equality-of-opportunity.org/papers/coll_mrc_paper.pdf.