Higher education bubble battles

The above is a parody of higher education commercials that I found at instapundit.

The thing that bugs me about the video is that it exemplifies the fact that the red team is on a crusade against higher education these days for bad reasons, just like the blue team is on a crusade in favor of higher education for bad reasons.

The red team has two concerns: First, universities are chock full of people from the blue team who want to convert their little darlings. Second, they overgeneralize from anecdotes about students with high debt and no jobs to the idea that college no longer has a net financial payoff on average to those who undertake it due to the rise in tuition in recent years and the move, in the public sector, to make students bear more of the costs directly (something you might have thought red team folks would like). This latter view is simply inconsistent with the available evidence, which continues to find a substantially positive average treatment effect on the treated of going to university, particularly for completers.

The blue team also has two concerns. First, they view university as a factory for creating blue team members; thus, more is better. This is the flip side of the first concern of the red team. Second, the blue team confuses the average treatment effect on the treated with the average treatment effect, and so, quite incorrectly in my view, expects that the financial benefits of university for those not currently undertaking it would equal those of students who currently do. This might be true for a relatively small number of high-ability credit-constrained or ill-informed students, it is unlikely to be true in general.

The sad bit is that a more nuanced view would actually be, you know, helpful. First, there are some students who should go to college who do not, or who would likely benefit from going to much different colleges than they choose to go to. Focusing on finding and aiding such students is a topic of much current research and is very valuable. Second, the positive average treatment effect on the treated of university surely hides much in the way of heterogeneous treatment effects. Much of that heterogeneity in treatment effects results from choices that students and parents make in terms of effort level (and thus degree completion probability), choice of major, and so on. Most of the sad anecdotes one reads concern students and parents who made poor choices on these dimensions, choices they might have made differently if the policy focus shifted away from trying to move students into or out of the university sector and focused instead on helping them to make better choices regarding how to manage their university experience.