The effect of education on income is like the effect of athletic practice on athletic prowess

Sunday, May 17th, 2026

In 2011, Bryan Caplan explains (in The Case Against Education), holders of advanced degrees made almost three times as much as high school dropouts:

Each step up the educational ladder seems to count. A high school diploma may sound unworthy of mention in our Information Age, but high school graduates out-earn dropouts by 30%.

[…]

Mainstream defenders of education tend to take the numbers at face value. Since college grads earn 73% more than high school grads, expect a 73% raise when you finish college. Contrarian detractors of education tend to take the numbers at no value. For all we know, college grads would have made 73% extra even if they never set foot on a college campus.

[…]

To properly measure the effect of education on earnings, to avoid what economists call “ability bias,” you must compare workers with equal ability but unequal education.

[…]

The typical high school dropout was a below-average high school student. Dropouts who wonder how much they would have earned if they’d stayed in school should not, therefore, compare themselves to average high school graduates. They should compare themselves to below-average high school graduates.

The typical college grad, similarly, was an above-average high school student. B.A.s who wonder what they owe to their college diploma should not compare themselves to average high school graduates. They should compare themselves to above-average high school graduates.

The effect of education on income is like the effect of athletic practice on athletic prowess. People who practice more play better. Professional athletes practice the most and play the best. This doesn’t mean I can be a professional football player if I practice enough.

[…]

To properly measure the benefit of football practice, to avoid ability bias, you shouldn’t compare me to pros who practice a lot. You should compare me to 165-pound 46-year-old nerds with bad knees who practice a lot.

[…]

First, IQ pays. Holding education constant, an extra point of IQ raises earnings by about 1%.

Second, holding IQ constant, the education premium shrinks but never vanishes. In 1999, a comprehensive review of earlier studies found that correcting for IQ reduces the education premium by an average of 18%. When researchers correct for scores on the Armed Forces Qualification Test (AFQT), an especially high-quality IQ test, the education premium typically declines by 20–30%. Correcting for mathematical ability may tilt the scales even more; the most prominent researchers to do so report a 40–50% decline in the education premium for men and a 30–40% decline for women.

[…]

The highest serious estimate finds the education premium falls 50% after correcting for students’ twelfth-grade math, reading, and vocabulary scores, self-perception, perceived teacher ranking, family background, and location.

[…]

Correcting for AFQT, self-esteem, and fatalism (belief about the importance of luck versus effort) reduces the education premium by a total of 30%. The sole study correcting for detailed personality tests finds the education premium falls 13%. The highest serious estimate says that once you correct for intelligence and background, correcting for attitudes (such as fear of failure, personal efficacy, and trust) and personal behavior (such as church attendance, television viewing, and cleanliness) further cuts the education premium by 37%.

[…]

Correcting for mathematical ability in the senior year of high school shaves 25–32% off the male college premium and 4–20% off the female college premium.

[…]

The mechanism is hard to nail down, but most researchers find correcting for family background reduces the education premium by 0–15%.

On reflection, though, correcting for family background probably “double-counts.” Both cognitive and noncognitive ability are moderately to highly hereditary, so you should correct for individual ability before you conclude family background overstates school’s payoff. This caveat matters. Rare studies that correct for intelligence and family background find that correcting for intelligence alone suffices.

[…]

For cognitive ability bias, 20% is a cautious estimate, and 30% is reasonable. For noncognitive ability bias, 5% is cautious, and 15% is reasonable.

[…]

On the reasonable assumption of 30% cognitive plus 15% noncognitive ability bias, dropping out of high school cuts income by almost 15%, a college degree boosts income by 40%, and a master’s degree boosts income by almost 70%.

Posted in Economics, Education, Policy | No Comments »

Gaikokumaniakku: “In 2003, the United States Department of Education gave about 18,000 randomly selected Americans the National Assessment of Adult Literacy (NAAL).” Of course, these must have been 18,000 randomly selected white Americans, to make a reasonable comparison with the historically white population of the majority of America, right? … right? The ghost of William Shockley is hovering silently over me and shaking his head from side to side in a manner I can only interpret as ominous.
Phileas Frogg: Every educational concern or observation in the modern world comes down to this: “Unless and until we finally accept that people are no more equal in their educability and intelligence than they are in their ability to sprint 100m, dunk a basketball or stand 7 feet tall, we will continue to waste limited time, energy, and resources on solving a problem without a solution: men are not equal.” God needs all sorts. And yet, every class of person projects their narrow measure of...
Jim: The labor market pays you for what you know now… The “labor market” is a centrally planned, authoritarianly organized corporate economy, a free market for employers as against employees, not a free market for employees as against employers. Fortunately, the Singularity is poised to render mutational load a thing of the past.
Isegoria: Caplan’s response would be that almost no one uses any of those skills, and those skills don’t generalize or transfer, at least not for most people most of the time.
Gaikokumaniakku: Geometry can be taught in many ways. Knowledge of proofs might be more useful than knowing the volume of a sphere. A bigger problem is that school is intended to reinforce the social order. If schools taught students how to resist cops and lawyers, government would find maintaining power to be more difficult. Another angle is skills versus facts. I probably don’t need to know the year in which Shakespeare wrote (a fact) but I certainly do benefit from understanding how Shakespeare...
Isegoria: Excellent example, Bob. I’m reminded, oddly enough, of how Musk calculated that on a good day he made a hundred command decisions as he walked the floor of his Tesla factory: “At least twenty percent are going to be wrong, and we’re going to alter them later,” he said. “But if I don’t make decisions, we die.”
Bob Sykes: I once had a family doctor who commented that doctors knew when to to add new prescriptions but not when to stop old ones.
Isegoria: Bryan Caplan is definitely allergic to shared culture. On the other hand, I don’t think our public schools have been working hard to assimilate everyone into our shared culture in a long, long time. I was just reading Charles Murray’s Coming Apart, and that is one of his main points: The main vehicle for nineteenth-century socialization was the reading textbook used in elementary school, the variants of which were modeled on the overwhelmingly most popular series, the McGuffey Readers. They...
Phileas Frogg: Caplan is one of the most hit/miss popular academics today. He goes from cogently and insightfully detailing the flaws and issues with a complex system or behavior, to proposing the most obviously asinine and unworkable solutions imaginable to anyone with practical experience in that field, to slipping a totally original and unlooked for consideration into the mix that gives you pause, all within the span of a small handful of pages, only to do it again a few pages later. Reading Caplan...
Bob Sykes: One argument in favor of Emily et al is social cohesion and group self-identification, national-building. Caplan seems to think humans are identical, interchangeable atoms, without history or culture. Or is he just furthering the usual sabotage of the surrounding, somewhat alien, culture in which he is embeddded
David Foster: “The great 20th-century composer Igor Stravinsky wrote, in The Poetics of Music, “You cannot create against a yielding medium.” Stravinsky’s innovations were nothing if not revolutionary, but he knew that he could not have produced them if he had not been constrained by the traditions of music and the mathematical strictures of tone. “Let me have something finite, definite,” he wrote. “My freedom will be so much the greater and more meaningful the...
Jim: “They were free to imagine and play and invent and write,” he said. “They were inventing one thing after another, after another, after another and for an engineer, what more can you ask for?” That’s the worst imaginable environment for engineers, who invariably need to be held down and whipped with soapful socks like Private Pyle at boot camp.
Jim: Yet maintaining the universalist, human-rights based legal infrastructure constructed after the Second World War takes priority over addressing these issues. The fact that this infrastructure was created for an entirely different world, where there was much less international migration, and where “asylum seeker” meant a political dissident from the Eastern Bloc, does not matter. If the post-WWII occupational court infrastructure were universalist, it would be possible for Englishmen to immigrate to...
Isegoria: That’s exactly the kind of thing he’s talking about, Phileas. I don’t want to share too many lengthy excerpts from a brand new book, but I’m happy to pique everyone’s interest.
Phileas Frogg: Looking forward to reading more excerpts, I thoroughly enjoyed, “The Sports Gene,” so much so that I went and bought a copy a few years ago. I expect some similarly provocative and interesting fodder from this one. On the topic of the book, whenever I was struggling to write a drum part for the band I played for in college, I would begin systematically taking pieces of my kit away until I developed something that worked, and then slowly add pieces back in. Limiting myself...
Jim: Phileas Frogg: Then we are substantially in agreement, our only meaningful divergence being that I reflexively view utility from the perspective of the world-controllers, as opposed to from the citizen-subjects. The major difference, then, is not moral righteousness or justice or other such thing, but the habitual understanding that the perpetuation of a system, any system, is owing, ultimately, to the perspective of its managers, formal or informal, that the purpose of a system is what it does…and...
Jim: Free men do not live subject to video surveillance or electronically locked buildings.
Bob Sykes: If you want a career in education, engineering, medicine, law, business, or the sciences, an accredited degree is mandatory. The days when you could just sit in the back of the room and listen ended long ago, even for state schools. At most schools, private and public, key cards of some sort are needed to get into most buildings, and surveillance cameras are everywhere.
Isegoria: Wow, times have changed! The recent Brown University shooting footage revealed that security cameras are common now, but the idea of locking a college down is really foreign to me.
Gaikokumaniakku: Historical perspective: Although the doctrine that the sea by its nature must be free to all was eventually upheld, most commentators did recognize that, as a practical matter, a coastal state needed to exercise some jurisdiction in the waters adjacent to its shores. Two different concepts developed—that the area of jurisdiction should be limited to cannon-shot range, and that the area should be a much greater belt of uniform width adjacent to the coast—and in the late 18th century these...

Isegoria

The effect of education on income is like the effect of athletic practice on athletic prowess

Leave a Reply

Search

Recent Comments

Categories