Byron Auguste: evaluation

Transcript context

…It depends a great deal on the choice of major, but I think 60 percent to 80 percent of it is value of learning. There’s definitely some signaling, there’s some networking, there’s some consumption thrown in there. Those would be my numbers. Well, I thought about this a lot because the college wage premium has been pretty stable. People who have college degrees do make more than those without. But I think there’s something else besides learning in college and the signaling, which is, if you look at how these studies work, you’re typically measuring an income gap, let’s say, 10 years later. And we’ve got it at a two-tiered labor market in this country. You started this question with a typical bachelor’s degree, but there’s no typical bachelor’s degree, as you know, by topic, but also by school. A college degree isn’t one thing. It’s 18,000 different things. That’s the first point. As we talked about before, there’s a huge overlap in the distribution of actual skill, actual competency, IQ — everything you want — conscientiousness, all the rest of it. Picture someone coming out of, let’s say, a flagship state university versus somebody coming out with most community college degrees or who didn’t finish college, but who has basically the same characteristics. The first one, the one coming out of college, is likely going to go into entry-level sales, entry-level management, entry-level technology. And from then on, their employers will invest in developing their human capital as part of their employer’s business model and competitive strategy. Whereas the second person who starts with the same skill set, same attributes, will probably be put into entry-level retail, warehouse, factory floor. And for the most part, they will be trained for safety compliance and efficiency and not for career development and so forth. After 10 years of that, well, then you’re going to have a massive difference in wage outcomes that, in the particular scenario I’m talking about, really don’t have to do with what they learned. They have to do with the initial signaling. We’ve got to recognize the fact that people are placed in jobs and kept from moving into jobs that they have the skills for. We mostly learn on the job. That’s where most of our human capital is developed. I think we’ve got it backwards when we think about a skills gap being driven by education. The skills gap is a result of the opportunity gap that we’ve imposed — not entirely, but the implications for the college wage premium is that there are three things. There’s signaling, there’s learning in college, but there’s also, what are you allowed to learn on the job as a result? Now, you think conscientiousness is quite important. I agree with that. I also see in the literature from personality psychology, the big five personality traits — they don’t change that much over time. If you’re conscientious when you’re young, you’re probably still pretty conscientious when you’re old. If we have in America, let’s say, 37 percent of people get four-year college degrees. The ones who don’t, on average, are less conscientious. Why think that 10 years later, given their lower conscientiousness, they can be retrained when they either couldn’t get through college, wouldn’t finish, didn’t even start — whatever the case may be?…

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