The law says that a company cannot give an employment test unless it has been shown to be non-discriminatory in effect. That means it doesn't screen out people of color at a different effective rate than white people.
So, employers don't create their own tests or use standardized tests. Interviewers talk randomly about whatever they want, using personal judgment to decide if the candidate is "a good match". This is supposed to be less discriminatory!
If a new hire does not succeed, his degree from a "good school" provides protection for the manager who hired him.
Big Boss: I hear that Jim isn't working out. You hired him. How did that happen?
Little Boss: Jim had a degree from a good school. How could I know?
Disparate But Not Serious
05/18/07 - Wall St Journal by James Taranto
What most professional jobs require is basic intellectual aptitude. And what has changed since the 1970s is that the court has developed a body of law that prevents employers from directly screening for such aptitude.The landmark case was Griggs v. Duke Power Co. (1971). A black coal miner claimed discrimination because his employer required a high-school diploma and an intelligence test as prerequisites for promotion to a more skilled position. The court ruled 8-0 in the miner's favor. "Good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as 'built-in headwinds' for minority groups," Chief Justice Warren Burger wrote.
This became known as the "disparate impact" test, and it applies only in employment law. Colleges and universities remain free to use aptitude tests, and elite institutions in particular lean heavily on exams such as the SAT in deciding whom to admit. For a prospective employee, obtaining a college degree is a very expensive way of showing that he has, in effect, passed an IQ test.
Instead of facing an imperfect hiring exam, there is a court approved path through college that happens to cost $100,000 and 4 years of full-time study. Even then, the benefit for the applicant is unknown, except for a group of elite schools with even higher fees and great reputations.
In college at the University of Chicago, I talked to a graduate student in Physics. He had overheard some shocking comments between two professors.
Professor A: What is the quality of the new physics grad students?
Professor B: One or two look promising. The rest should find something that they are good at.
U.Chicago had a nationally recognized physics department. A student had to be dedicated to physics study and have high grades and recommendations to be admitted to the program. Yet, their professors thought most of them were in the wrong place and weren't good enough for careers in physics!
We would like to think that institutions within our society are valuable to us. I'm sad to report that they are in it for themselves. You can't assume that what you are getting is valuable and efficient just because you are buying their product.
A student thinks that his college degree is valuable to future employers. It is, but only as an indicator of his intelligence. His college professors don't train students for careers, and most businesses have the attitude "Forget what you learned in school. This is the real world."
Let's be smart enough to allow people and businesses to talk to each other using any criteria they want, especially for hiring. If a person meets discrimination at one employer, then there are other employers. If a person meets discrimination at ALL employers, then no court order is going to help. It certainly doesn't help to require paying $100,000 and 4 years to schools so the employers will not be sued for unintended discrimination. That is court-required discrimination against the non-rich.
How College Selection Affects Earnings
Stacy Dale - Mathematica Policy Research
Alan Kreuger - Princeton University - 02/16/11
Dale and Kreuger found a big boost to later earnings for students attending highly selective colleges in 1976 and 1989. They controlled for commonly observed factors such as high school GPA and SAT scores.
They further adjusted for student ability by considering the average SAT score of the colleges to which the students applied. This accounted for almost all of the variations in earnings. The remaining effect of college choice on earnings was close to zero.
Certain subgroups benefitted from a prestigious school. Dale and Kreuger considered black and Hispanic students, and those who had relatively less educated parents. Their boost to earnings remained large after the above adjustments.
This suggests to me that the value of highly selective schools is "signaling", as compared to attending less prestigious schools. The prestige of the school may remove some of the negative bias in hiring that affects minority students and those showing the cultural differences of being raised in a less educated household.
The College Scam
01/28/09 - TownHall.com by John Stossel
Do four years of college produce a wealthier life? Maybe the college is just there when people are reaching their potential. And what is the increase in earnings?
[edited] During the campaign, Barack Obama repeated the common statistic, "On average during your lifetime you will earn a million dollars more if you get a bachelor's degree."Rachele Percel borrowed to pay $24,000 a year to attend Rivier College. "I was told to take out the loans and get a degree in Human Development because when you graduate you're going to be able to get that good job and pay them off, no problem," she told me.
She failed to find a decent job for three years. Now, she holds a low-level desk job doing work she could have done straight out of high school, and she is $85,000 in debt. She says, "I definitely feel like it was a scam."
A recent survey asked thousands of students: Would you go to your college again? About 40% said no.
Dr. Marty Nemko is an education consultant and career counselor:
The bachelor's degree is America's most overrated product. The million dollar increase in earnings is a misleading statistic. It includes billionaire super-earners who raise the average.More importantly, many college kids would have been successful whether they went to college or not. You could take college-bound students and lock them in a closet for four years: they are going to earn more money. Those are the kids who already tend to be more intelligent, harder-working and more persistent.
Those in the bottom 40% of their high school class have a very small chance of graduating college. Colleges actively recruit those kids. Eight years later, many of them have no degree and lots of debt. They think of themselves as failures. It is immoral that the colleges do not disclose that!"
Universities still throw around that million dollar number. Arizona State recently used it to justify a tuition hike.
Charles Murray's recent book, "Real Education", argues that many students just aren't able to handle college work. Graduation statistics seem to bear him out.
For Most People, College Is a Waste of Time
8/13/08 - WSJ Opinion by Charles Murray, W.H. Brady Scholar at the American Enterprise Institute. This essay is adapted from his forthcoming book, "Real Education: Four Simple Truths for Bringing America's Schools Back to Reality" (Crown Forum).
Mr. Murray provides a plan to make colleges relevant again, because of these problems.
Advanced skills for people with brains really did get more valuable over the course of the 20th century, but the acquisition of those skills got conflated with the existing system of colleges, which had evolved the BA for completely different purposes.Outside a handful of majors -- engineering and some of the sciences -- a bachelor's degree tells an employer nothing except that the applicant has a certain amount of intellectual ability and perseverance. Even a degree in a vocational major like business administration can mean anything from a solid base of knowledge to four years of barely remembered gut courses.
Fred: My high grades and SAT scores got me into Big College. I'm on my way.Mike: After you pay $100,000 in tuition/expenses and lose four years of wages.
Fred: There will be some studying, but also parties and girls.
Mike: Too bad you couldn't present your grades and SATs to some company, earn while you learn, party in your own apartment, and buy a Ferrari with that $100,000.
11/13/11 - Carpe Diem by economist Mark J. Perry
George Will: [edited] There were 2,000+ personnel tests available to employers in 1964. But, an Illinois official ruled that these might be unfair to disadvantaged groups. Employers were burdened to prove that a test was a "business necessity" for a particular job if it had a "disparate impact" [ Black and White applicants did unequally on the test].Many employers feared endless litigation. They switched to requiring college degrees as indicators of intelligence and diligence. This was one reason college attendance increased from 5.8 million in 1970 to 17.5 million in 2005.
Peter Thiel: [edited] Higher education is a giant selection mechanism. 10% of the value of a college degree comes from learning, 50% from getting into a selective university, and 40% from graduating from a selective college known to employers.
It might be much more efficient if employers could use intelligence tests instead of expensive four-year college degrees that add very little educational value.
Advice Goddess: Ever Heard Of Community College?
08/25/08 - Amy Alkon posts about the pressure of going to a name college, and selfishness. Many commenters report what college was worth to them.
Technology is reducing college costs. Why is tuition going up?
11/2008 Washington Monthly by Kevin Carey [edited]
The average price of attending a public university, adjusted for inflation, more than doubled over the last two decades. The steepest increases came in the last five years.Colleges have become more efficient and productive through technology, and the cost of teaching is starting to decline. Almost none of those savings are passed along to students. Colleges are pocketing the difference, even as they raise tuition.
Virginia Tech is reputed to be a first-rate engineering school. Engineers need to learn math. But, budget cuts in the math department reduced the number of professors despite increasing numbers of math students. This kind of irrationality is typical in higher education, where departmental budgets often have little relationship to costs, revenues, and demand.
Colleges spend the money elsewhere. The Delta Project on Postsecondary Education Costs found that tuition and fee revenue per student at public research universities increased by 34 percent from 2000 to 2005, inflation adjusted. Spending per student declined on instruction and academic support.
This is not new; overcharging for introductory courses is standard in higher education. Colleges use the excess revenue from huge, inexpensive lecture hall classes to support other, money-losing activities. Freshmen have always been cash cows, and technology has made them more so.
Colleges are status-seeking institutions. Research and scholarship, Division I sports programs, new buildings, and high SATs are all components of status. Status seeking would be perfectly acceptable if a college’s reputation were based largely on teaching. Colleges would balance the competing interests of students, faculty, administrators, alumni, and the public. Self-interested institutions would prosper, and students would get a high-quality, reasonably priced education.
But status in higher education is not based on comparable measures of student learning, because such measures aren’t publicly available; lobbyists for colleges and universities have made sure the data is kept under wraps. It is effectively impossible to judge institutions by their outputs, by how much students learn. So, the pecking order is based on inputs like freshman SAT scores and tuition cost. Price has become a symbol of quality, instead of a component of quality. Colleges have many incentives to raise prices and none to lower them. Lower prices send a negative signal, often driving away students.
Rational comparison would still leave a niche for prestige universities, because there will always be rich people willing to pay for the status of elite colleges. Yale University now gives away complete sets of lecture course videos at open.yale.edu. Yet, more students than ever are ready to pay $50,000 per year for those same courses. Those students aren’t paying a premium for what they learn, they are paying for a piece of paper certifying that they learned it at Yale.
Down with the Four-Year College Degree!
12/03/08 - Cato-Unbound by Charles Murray (10/2008)
The link leads to more papers on the subject.
[edited] So what’s my beef with the current college system? Imagine that you have been asked to design America’s college education system from scratch. One of your colleagues submits the following proposal that is cruel and possibly insane, but it is the system that we have.• We will set up a single goal to represent educational success, which will take four years to achieve no matter what is being taught.
• We will attach an economic reward that often has nothing to do with what has been learned.
• We will urge large numbers of people to seek that goal, despite having insufficient ability, wait until they have spent a lot of time and money, and then deny it to them.
• We will stigmatize everyone who doesn’t meet the goal.
• We will call the goal a “BA.”
Why College Is A Waste Of Money
12/23/08 - EasyOpinions by Andrew Garland
(via Subprime Education by Mark Steyn)
A college student reports on the waste and dispair imposed by a college system that discards about half of the students who try for a degree.
[edited] My high school was a small charter school with the mission to send all of its students to college. Our course work supported an obsession for college preparation. Most kids had full-blown college fever by senior year.I'm now a sophomore at UMass Amherst. At least a few of the people from high school have already dropped out -- after blowing tens of thousands of dollars on tuition and fees at expensive, but not especially good, private colleges. They were great, smart people, but I knew that they lacked the focus, drive and maturity they would need to graduate.
This money came from parents, from federal Pell Grants, from the colleges, and from student loans that these kids will have to pay back while working low-wage jobs.
Why is law school so expensive?
01/13/10 - IdeoBlog by Larry Ribstein.
Via Cafe Hayek.
[edited] The current system forces everybody who wants to practice any kind of law into three-year, high-priced law schools. This will never produce competition. The cartel forces practical/doctrinal training to coexist uneasily with lawyer-scholars, and results in training that compromises the needs of all kinds of lawyers.Where is the argument as to why high-level training should be forced down the throats of everybody who wants to practice law?
Does U.S. News Make Law Schools More Expensive?
Frank J. Macchiarola and Michael C. Macchiarola
[edite] The accreditation process gives law schools a virtual monopoly on bar admission. The 200 ABA approved law schools exclude prospective attorneys who cannot afford the cost of a legal education as currently delivered.This exludes lower cost alternatives like on-line education, credit for accelerated coursework, a two-year curriculum, or clerkships and internships. In fact, the position of law schools as the preferred vehicle for entry into the legal profession is little more than one hundred years old.
The framework of ABA rules has prevented law schools from pursuing radical innovations without jeopardizing accreditation, reputation, or standing.
College Aid Is Corporate Welfare
05/21/12 - The Atlantic by Andrew G. Biggs (via Advice Goddess)
[edited]: Recent research suggests that colleges capture a significant portion of federal aid rather than lowering costs to students. Simply put, much of federal student aid is corporate welfare for colleges.Cellini and Goldin looked at for-profit colleges by eligibility for federal aid. Riegg and Goldin found that aid-eligible institutions charge 75% higher tuition across all states, samples, and specifications, even when controlling for the content and quality of courses. The higher tuition is about equal to average federal assistance. This suggests that institutions raise tuition to capture the maximum aid available.
Are for-profit colleges essentially different from non-profits? "For-profit" suggests greedy businessmen who raise tuition whenever possible. We might think that non-profit colleges would charge less out of altruism. But, they charge the same or more, offering more services over time to attract the best students with the best financial aid at ever higher prices.
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