The Case Against Education: Why the Education System Is a Waste of Time and Money

by Bryan Caplan

The less reliably you measure X, counterintuitively, the greater X’s true effect.96 Ignoring mismeasurement lets competing factors “steal” credit from education, leading us to underestimate how valuable education really is. Imagine a world where five workers have high school diplomas, and five have college degrees. Workers with high school degrees earn $50,000 a year. Workers with college degrees earn twice as much. Yet neither high school nor college teaches students to carefully complete surveys. When the census inquires about their education, one of each group checks the wrong box. What happens? The data overstate earnings for high school grads and understate earnings for college grads. Measured earnings are $60,000 for high school grads (because one alleged high school grad went to college), and $90,000 for college grads (because one alleged college grad didn’t go to college). The true difference in earnings is $50,000; the true college premium is +100%. Yet thanks to human error, the measured difference is only $30,000, and the measured premium is only +50%.