The University Degree loses its luster
It’s a no-brainer that any teenager should aim for university because a degree carries substantial economic value. Degrees are also very useful for employers because they signal that a young person has advanced skills that are in high demand.
Both of those statements have been taken as gospel for decades, but their legitimacy is increasingly in question. A closer read of economic history suggests they should always have been seen as more contingent than fixed. As US economists Claudia Goldin, Lawrence Katz and David Autor showed in their work on “the race between education and technology”, there is nothing inevitable about more education being met with more demand for those skills — it all depends on how the supply of particular skills interacts with the technological paradigm of the day.
The 1800s transition from artisans to larger and more complex businesses created demand for educated workers and delivered them a healthy wage premium, which the expansion of high school education in the early 20th century then eroded. The information revolution then exploded the scale and complexity of work, fuelling a long boom in knowledge-work jobs that buttressed the college wage premium over the past 40 years even as the numbers obtaining a degree expanded.
