There have been many studies estimating the causal effect of an additional year of education on earnings, Gregory Clark and Christian Alexander Abildgaard Nielsen note:
The majority employ administrative changes in the minimum school-leaving age as the mechanism allowing identification. Here, we survey 79 such estimates. However, remarkably, while the majority of these studies find substantial gains from education, a number of well-grounded studies find no effect. The average return from these studies still implies substantial average gains from an extra year of education: an average of 8.2%. But the pattern of reported returns shows clear evidence of publication biases: omission of studies where the return was not statistically significantly above 0, and where the estimated return was negative. Correcting for these omitted studies, the implied average causal returns to an extra year of schooling will be only in the range 0%–3%.
This needs to be done by discipline. I suspect engineering, prelaw, et al. show good ROIs, whereas fakes like gender studies show strongly negative ROIs at every year of study.
It’s the Labor theory of value, applied to education. “I increased the amount of time I spent on my education, THUS IT MUST BE WORTH MORE.” They think that by saying horseshit theories with different words, that it makes the spell work better this time.
They can’t escape the prison of their Marxist canards.
There’s nothing new under the sun.
Phileas Frogg:
Adam Smith and David Ricardo’s labor theory of value is not ordinarily understood to posit that, if the same amount of labor is done in double the time, that, therefore, a commodity is worth twice as much, but rather that the value of commodities is based on the quantity of abstract labor embedded in their production. More crudely, a good or service must sell for at least its cost of production or be a loser.
Jim,
You’re right. I was speaking off the cuff about its colloquial use by Marxist, not it’s original formulation, which was poorly articulated on my part.
Good catch.
These studies need to (but almost never do) control for innate psychological attributes that are known to have a strong and causal effect on earnings: specifically IQ and the personality trait of Conscientiousness.
It is IMO almost certain that if IQ and Intelligence were used as controls, there would be no significant effect on earnings of extra years of schooling.
In other words, there’s a substantial literature to suggest that most of the differences in earnings that are not down to chance factors and sex/race group preferences; come from a combination of general intelligence and conscientiousness – and these are mostly innate.