It is well established that, on average, people with college degrees earn quite a bit more over the course of their careers than do those without. That earnings premium is one of higher education’s major selling points. A slew of studies—especially recently—have sought to quantify the return on investment, examining annual or lifetime earnings by attainment level or subject studied.
But people who go to college or not aren’t otherwise identical. And even those who do go self-select into different majors.
In a new paper on the college payoff, Douglas Webber, an assistant professor of economics at Temple University, tries to take all of that into account. Mr. Webber spoke with The Chronicle about how prospective students and policy makers should think about the value of a degree. What follows is an edited transcript of that conversation.
Q. You look at the lifetime-earnings premium a little bit differently than some others have. For one, you try to eliminate selection bias. Why is that important?
A. There are two main reasons that people who go to college earn more than everyone else. One is that they are hopefully learning something in college that is going to help them in their future careers. Another is that smarter people tend to go to college, and they were going to be more productive regardless. <Read more.>