The diminishing returns of a college degree

This guest post comes from Pop at Pop Economics.

"In a society of Einsteins, Einsteins take out the garbage, scrub floors, and wash dishes." That was a recent sentence written by George Mason economist Bryan Caplan.

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He was talking about eugenics, but the quote got me to thinking about the college education and its recent role as a punching bag in the blogosphere and press. If everyone in America got a bachelor's degree, college grads would have to take out the garbage, scrub floors, and wash dishes. You can't outsource your janitorial staff to India.

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How close are we to that? "Is a college degree worth the cost?" is a question that returns every time the fall semester starts. But this time around, the skepticism has gotten especially strong. A survey found that only 64% of Americans think a college education is a good investment, down from 80% in 2009. That's laughably low.

Meanwhile, the stats on how college grads are doing vs. high school grads and dropouts seem crystal clear.

In August, the unemployment rate for people with a B.A. and higher was 4.6% -- almost six points lower than that of high school grads and 10 points lower than that of dropouts. The median income of people with bachelor's degrees is 75% higher than that of high school graduates, according to the U.S. Census Bureau. Professor Richard Florida recently found a strong correlation between educational attainment and happiness. (Not necessarily causation, but still something to think about.)

How do you walk away from those facts still thinking that maybe a college degree isn't worth it?

But the cost is so high

Many commenters have pointed to the ever-steepening cost of college. In the last decade, it has risen at about 5% per year, much faster than in the previous two decades.

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Then your typical commenter writes something about opportunity cost ("He could be a plumber making $60k!"), compound interest ("Invest that $100k for college in a low-cost mutual fund and you'll be a millionaire by 40!"), and anecdotes about M.A. grads working in Starbucks, and voila! Suddenly, college looks like a poor deal.

But is it really as bad as it seems? The College Board reports that, on average, students pay only 67% of that sticker price. In some Ivy League schools (plus Stanford), parents who make under a reasonably high salary don't have to pay anything.

Is the cost increasing? Yes. But the best schools are increasingly competing for the best students (in part, because they become the most generous alumni). That will hopefully continue to have a dampening effect on actual costs and might trickle down to lower-tier schools.

But the jobs of the future need technical skills, not a broad-based curriculum, you might say.

Periodically, the Bureau of Labor Statistics tries to estimate what will be the most in-demand jobs in the future. Of the 10 jobs it thinks will grow the fastest through 2018, only two require a bachelor's degree or above (accountants and college professors). Most (like customer-service reps and food preparers) need only on-the-job training.

A great example of this is nursing. You don't need a B.S. to be a nurse. In some cases, you can get by with an associate degree or three-year vocational program, which will include the areas of biology specifically relevant to your future job.

Let's put aside the issue of whether you want any of those fastest-growing jobs. How accurate do those jobs-of-the-future estimates actually end up being? It depends on your definition of "accurate." In a look back at their 1988-to-2000 employment projections, BLS economists found that they were way too optimistic about some professions and not optimistic enough about others.

The number of human service assistants grew at a rate triple what they predicted. Meanwhile, computer technicians didn't add nearly as many jobs as thought. They were right that we'd have more computers, but improving technology meant they broke down less frequently.

But even more than that, you can't predict job growth for a job that doesn't exist yet. How many PR social network specialists would the BLS have predicted in 1995, before mainstream social networks existed?

What a broad-based college degree gets you is flexibility. Go to a plumbing school, and you'll come out a plumber. You'll be a great fit for plumbing positions. But if that field ever suffers or you find you don't enjoy the work, it will be much harder to change professions than if you graduated with a B.A. in history.

Right now, only about 30% of Americans have a bachelor's degree. So let's not get ahead of ourselves. But in a world where everyone has a B.A., a college diploma becomes even more essential, not something you can just skip altogether.

More from Pop Economics and MSN Money:

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• When to take a lower-paying job
• Don't pay sticker price for college
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