This part, from the college study, seems speculative and questionable to me: “These are financial acumen variables which include financial literacy, self-assessed financial knowledge and risk-taking, search intensity when saving and borrowing, and active saving. Some of these individual characteristics may be at least partially innate”
In general, I’m not sure about the idea of controlling for financial health when studying wealth. That seems like using the outcome to predict the outcome to me.
I don’t see how you can ignore the status of the individual pre-college when assessing the financial value of college.
We know that the kids of well-off educated parents are much more likely to go to college and succeed in college. That is a large bias right there.
DMsays:
It’s important to note that the study in 1. is US-specific. College differs significantly around the world, e.g. in most of Europe it’s free or very cheap for the students. So conclusions could easily be different outside the US.
You are correct. The results might be different elsewhere.
Note that college is never free. At best, it can be free to the student. However, someone, somewhere, must be paying for the service.
Of course, if the service is more heavily subsidized, then the private gains to the students might be higher.
DMsays:
Usually it’s taxpayers money paying for it when it’s free. So the student still ends up paying back some percent for it eventually, given they have taxable income. It’s quite a different model in any case.
Bob Harrissays:
Moreover, the time the student spends on college represents a loss of opportunity to earn. This is especially true for a PhD student who could possibly have earned, and invested, a tidy sum in the time it takes to complete the PhD.
This part, from the college study, seems speculative and questionable to me: “These are financial acumen variables which include financial literacy, self-assessed financial knowledge and risk-taking, search intensity when saving and borrowing, and active saving. Some of these individual characteristics may be at least partially innate”
In general, I’m not sure about the idea of controlling for financial health when studying wealth. That seems like using the outcome to predict the outcome to me.
I don’t see how you can ignore the status of the individual pre-college when assessing the financial value of college.
We know that the kids of well-off educated parents are much more likely to go to college and succeed in college. That is a large bias right there.
It’s important to note that the study in 1. is US-specific. College differs significantly around the world, e.g. in most of Europe it’s free or very cheap for the students. So conclusions could easily be different outside the US.
You are correct. The results might be different elsewhere.
Note that college is never free. At best, it can be free to the student. However, someone, somewhere, must be paying for the service.
Of course, if the service is more heavily subsidized, then the private gains to the students might be higher.
Usually it’s taxpayers money paying for it when it’s free. So the student still ends up paying back some percent for it eventually, given they have taxable income. It’s quite a different model in any case.
Moreover, the time the student spends on college represents a loss of opportunity to earn. This is especially true for a PhD student who could possibly have earned, and invested, a tidy sum in the time it takes to complete the PhD.
I think it is pretty clear that getting a PhD is not generally financially viable.