David Brooks on a book I first saw covered in the Chronicle of Higher Ed last week: “The Race Between Education and Technology,” (working paper here).
Basically, the authors argue, educational attainment was very high and rising in America up until 1970. Then high school graduation rates peaked, and college completion rates stagnated as well (as I point out in my book). The increase in inequality since then, the writers argue, as measured by the college wage premium, is caused by a decline in the supply side of educated citizens, which also threatens our international economic competitiveness. "America’s lead over its economic rivals has been entirely forfeited, with many nations surging ahead in school attainment. This threatens the country’s long-term prospects. It also widens the gap between rich and poor. "
I am all for increasing investment in education. But I don't buy Brooks' further argument that human-capital policies should dominate and replace all other labor market reforms. A simple look at median incomes by education since 1970, which I use in all my presentations, shows a decline in the incomes of less educated workers combined with stagnating income for more educated workers. And the breakdown in the health care and retirement systems affects workers at all education levels. Simply handing out more diplomas is not going to make the United States a more broadly prosperous place, although we'd all like it to be true.