Everything I Ever Needed to Know: The Middle School Premium

I recently wrote on the Census Bureau’s awaited annual update to its “Income, Poverty and Health Insurance Coverage” data for 2014. I editorialized on the decline in median earnings for 25-34 year-olds since the turn of the century. Today, I thought that rather than emphasize the negative, as I often do, I would point to the positive: For two decades, things have been getting better for people who don’t even finish the ninth grade. Way better.

Don’t laugh. This is serious social science.

Consider: If you think education increases earnings then you’d look at aggregate earnings of all persons (for the youth bracket, in this case) by education. You’d expect to see the aggregate earnings grow with an increasing proportion of the gains going to educated people. Instead you get this:

Aggregate Personal Earnings by Education (25-34, Both Sexes)

…Increasing proportions of the total going to the educated but no aggregate growth. This means average productivity isn’t improving; maybe the unenlightened are getting dumber or maybe educated workers aren’t really benefiting from more schooling.

How do you separate these factors when productivity and population (by education) are multiplied together and then added up to illustrate the aggregate above? In an unlikely parallel, Paul Krugman leads the way when trashing Jeb! Bush’s economic record as governor of Florida: Just compare the average aggregate growth rate to the average per capita growth rate. If the average per capita growth rate is higher than the average aggregate growth rate, then you’re looking at improving productivity rather than positive population shifts, which is bad.

We can do the same thing with education: average growth in aggregate earnings and average growth in per capita earnings.

Get ready…

Earnings Growth Rates by Education for 25-34 Year Olds (1991-, 2014 $)

Boom. Since 1991, the cumulative per capita growth rate for middle schoolers’ incomes has been 28 percent but for college grads (and above!) it’s been a scant 9 percent. In 42 years, both categories’ earnings will be identical.

Presumably, in about twenty-five years, young people will begin retarding their educations to avoid wasting their time learning ancillary subjects like geometry, science, literature, history, and—ungh—drama.

And if you thought law school scamblogs were bad, wait until you see Third Tier High School. Many a commode will be flushed that day, that’s for sure!

But aside from that massive finding, I direct your attention to the blue bars in the chart. As with Krugman’s argument on Jeb!’s governorship, they show exactly what we’ve feared all along: Any growth in college graduates’ productivity is overwhelmingly swamped by population shifts. In other words, more people are getting degrees, but overall they aren’t earning much more.

I wouldn’t read too much into the fact that dropping out of college is worse than not going in the first place. The stagnation of associate’s degree candidates, by contrast, is disturbing.

In truth, though, much of the growth in per capita earnings is probably attributable to college grads, so I wouldn’t completely discount them. However, most of that occurred in the 1990s. We’re in a very different place today.

Ponder that when your kids start the square-dancing unit in P.E.

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