But there’s also a methodological issue. Do the data support your implication of ‘social engineering’? If so by whom?

Or do they support the notion that education is a public good taken up more effectively by some groups than others, and if so for what reasons (consider Coleman and others on this)?

If the city provides a basketball court on my New York city block I’m not going to use it – but if they help sustain a public library, I may well. In contrast the young man who famously interned at JP Morgan in London lat month and wrote a report on how he and his peers use ‘media’ would probably not respond in the same way.

Is this social engineering or freedom of choice?

It’s about the money, as always. All elite jobs require a college education. Hebrews and white females are the winners of thirty years of race gender bias and quotas. All other groups are the losers. Quotas and subsidies do work. Government picks winners and losers. Winners love it. Losers hate it.

I don’t have NBER access – but I learn from Wright’s review in the JEH that this is seriously interesting stuff. The Goldin-Katz hypothesis of a major historical break, if valid, is of major importance.

Re your earlier comment on distance learning and its value:

Bernard, R. M., Abrami, P. C., Lou, Y., Borokhovski, E., Wade, A., Wozney, L., et al. (2004). How Does Distance Education Compare with Classroom Instruction? A Meta-Analysis of the Empirical Literature. Review of Educational Research, 74(3, Autumn), 379-439.

As for measuring the premium, these data are from the Katz and Goldin book. If you have NBER access you can download chapters directly.

http://www.nber.org/papers/w12984

Incidentally, premium over what? Those without a degree? In what kind of job market?

But seriously, all this stuff about supply and demand curves presupposes a product whose value is not too problematic. Surely the interesting thing about education – from an economic point of view – is that its value proves highly variable across disciplines, and curiously wobbly and likely to change without notice within them.

Perhaps it’s more of a gamble than an investment.

When I went to college, science was the thing (I became an engineer). But science went off the boil years ago. I gave up on science too and went into banking and consulting, skipping the MBA bit. But many of my peers and juniors did not skip, helping boost the BSchool intake.

We seem to forget the sheer volume of jobs created in the financial services industry over the last 15-20 years.

Supply curve shifts left, demand curve shifts right, I’m willing to bet on higher prices. I would argue that it’s only a bubble if the premium from having a degree isn’t sufficient to cover the costs of the degree. I don’t know enough to comment on whether that is true. But the premium seems like it’s large and growing (via Katz and Goldin):

http://www.voxeu.org/files/image/goldin%20fig%202.JPG

I doubt these college cost numbers don’t include the University of Phoenix. Just based on the sheer magnitude of folks who take classes and get degrees from there, I would expect increasing acceptance of these courses and degrees as “legitimate.” Perhaps not.

Several posts darkly imply the rise in HEd tuition is driven by the government’s pushing education … Duh! How many times have we heard that education is the best investment a government can make – even though there’s a healthy dispute in the human and social capital literature about whether this is a warranted claim?

For those who make this argument is the answer to cut back on higher education? How can one can justify that? How could there be an ‘efficient market’ in education when the costs and the benefits are so separated in time and happenstance? OK, it’s about ‘expectations’ but who shapes these?

On the one hand we have Mike Marotta’s note of ‘re-upping’, on the other srp’s arguments about relative price rises and the collapse of screening. These apply especially to BSchools.

There’s interesting research by Schleef (2000) in Sociology of Education 73, 3 that argues the MBA may have become the new liberal arts qualification for our greed-infused society – effectively bachelor degrees have been corroded/diluted into socio-economic insignificance i.e. you need an MBA to get a job, a liberal arts bachelor’s doesn’t hack it any more. Of course when we talk about ‘an MBA’ we are not talking about the ‘top 25′ and working at Goldman Sachs, we’re talking about the layers Cronin & Horton are discussing.

My ongoing interest is in discovering how we are to explain the staggering growth of business education (including that at the bachelor level). But given such demand, surely the price will rise until there are viable lower-cost providers? Note that U Phoenix is making some really interesting moves in Europe

For those interested in what’s happening to these ‘lower tiers’ of business education in the US I also heartily recommend Bethany Moreton’s (2009) To Serve God & Wal-Mart Harvard. Scary!

1) The Baumol-Bowen effect, where labor-intensive craft industries such as the arts and education and much medicine have lower productivity growth and so their relative price rises

2) Government ubsidies to education in the face of somewhat inelastic demand

3) Collapse of screening function in high schools and effective outlawing of screening tests in employment gives higher ed an important advantage here

4) Higher returns to skill make investing in college more reasonable to the extent that human capital is accumulated

Peter is right on target in talking about the disconnect between the faculty and students, or, for that matter, between university administrators and the broader public. This disconnect is now causing a political reaction as state governments cut university appropriations.