Paul Krugman on Graduate Jobs

In January I posted about UK university participation rates, contrasting the much larger numbers of young people going to universities now with the situation in the 1960s. I suggested that acquiring a university degree in 2010 was roughly comparable to passing the 11+ (and entering grammar school) then. On that basis, job prospects for many graduates today might be similar to those for people who used to leave grammar school without taking A levels.

It now looks as though this might have been an optimistic assessment. In particular, Paul Krugman, the Nobel laureate economist, has made some sobering points in the New York Times recently. On 5 March in his NYT blog, The Conscience of a Liberal, Krugman revisited an article he had written in 1996, which was intended to be a look-back from 2096:

I decided to write the piece around a conceit: that information technology would end up reducing, not increasing, the demand for highly educated workers, because a lot of what highly educated workers do could actually be replaced by sophisticated information processing — indeed, replaced more easily than a lot of manual labor. ... So here’s the question: is it starting to happen? Today’s [NYT] has an interesting and, if you think about it, fairly scary report about how software is replacing the teams of lawyers who used to do document research.

Developing the post's theme of The Falling Demand for Brains, he then introduced some evidence that higher education had been oversold: the ratio of earnings for full-time working men with college degrees versus those with high school:

Krugman concluded:

In my mind this raises several questions. One is whether emphasizing education — even aside from the fact that the big rise in inequality has taken place among the highly educated — is, in effect, fighting the last war. Another is how we have a decent society if and when even highly educated workers can’t command a middle-class income.

On 6 March in an op-ed article, Degrees and Dollars, Krugman pointed out that, as well as legal researchers, electronics designers were likely to be replaced by software, and, more generally, high-skill jobs performed by the highly-educated were vulnerable to “offshoring”, further hollowing out the US jobs market.

… the notion that putting more kids through college can restore the middle-class society we used to have is wishful thinking. It’s no longer true that having a college degree guarantees that you’ll get a good job, and it’s becoming less true with each passing decade.
So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.
What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.

Krugman’s views are certainly left-wing (‘liberal’) by US standards, and how the “society of broadly shared prosperity” could be achieved is far from clear. However, his reservations about the value of university degrees certainly seem realistic. Perhaps the current UK preoccupation with issues of fair access and tuition fees is missing the point (“fighting the last war”) that the majority of degree holders (who by definition cannot attend the most prestigious institutions) will never get above-average jobs. There then has to be some doubt as to whether the government will ever recover the money it will be borrowing to lend to students for fees.

When you're clever but ill-connected

Michael Skapinker has a column in today’s Financial Times: How poor students become top scientists. The ambiguity of this title seems to have escaped the FT's subeditors. In fact, he is drawing on an OECD study of young people from poorer families who beat the odds academically:

What distinguished high achievers from poorer backgrounds, apart from spending longer in the classroom, was their attitude. “Resilient students are more motivated to learn science, more engaged with science and have greater self-confidence in their ability to learn science. The level of self-confidence in their academic abilities is in fact one of the strongest correlates of resilience,” the OECD study said.

Skapinker concludes:

Can companies, particularly science-based companies, encourage those attitudes? Sending their people into schools as mentors could help, the study says. So could other forms of interaction between poorer students and those working in science companies. Many companies offer internships and work experience. The problem, as other studies have shown, is that the best-connected often grab most of the opportunities. Where are the companies ready to declare that their internships will go to those who need them most?

I put this comment on FT.com:

The “high achievers from poor families” don’t just lack material resources, but also, as the article implies, face a shortfall in “social capital” including access to networks, contacts and internships. In these circumstances, studying STEM subjects (science, technology, engineering, maths), where what you know matters rather than who you know, may be a better strategy than taking softer options with a more uncertain access to employment.

University Entrance – Today’s 11+?

Describing the educational experience of my age group, I would point to the two main hurdles we had to jump: first the 11+ exam which controlled access to grammar school education, and then, for a minority within the grammar schools, A-level based university entrance. Of course, there are exceptions: I’m ignoring independent schools and the few who might have gone to university from secondary modern schools or the handful of technical schools, but I think it sums secondary education up for the majority in the 1950s and 60s.

At first sight, the current scene of secondary level comprehensives, academies etc and government aspirations of 50% going to university might seem a different world, but I thought it might be interesting, particularly given the current controversy over university fees, to bring together what historical data I could find on grammar school and university participation. Hence the chart below, but see the cautionary notes.

The interesting feature is that from the early 1950s to the early 1970s, when the “Tripartite System” of secondary education was in full swing, about 30% of those at school were being taught in grammar schools (G+ including equivalents, see below). At that time, a third at most of that group went on to university. Now we seem to be at about the 35% level for university participation (U, as a proportion of those aged about 18). A tentative conclusion might be that possession of a university degree in 2010 is roughly comparable in terms of an academic experience to having been to a grammar school in the 1960s. The economic and other benefits of going to university to the individual and to society in general are way beyond the scope of this posting, as are issues of social stratification and gender among the entrants and among different universities. I will make one observation, though.

Prospect magazine’s In fact column in November 2010 (Issue 176) stated, “One in three British call centre workers is a graduate; a rise from one in four in 2009”. These figures came from the Daily Mail on 22 September 2010, which had reported a survey by Hays Contact Centres in conjunction with the Top 50 Call Centres for Customer Service initiative (sic). “35 per cent of their agents are now educated to degree level - up from 25 per cent last year.” I recall that some pupils left grammar schools after ‘O’ level (the GCSE predecessor), and typically went into white-collar work at a fairly low-level, say clerk in a bank, perhaps the call centre agent equivalent of the time. Of course, they had no loans to pay off and also had reasonable career prospects in the absence of any large-scale graduate entry schemes. The Mail pointed out that in 2010:

... many graduates intend to develop a long-term career in the industry. ... Call centre starting salaries are usually £12,000 to £18,000. Some graduates can expect to move up to senior marketing or sales roles ...

One can only hope so.  Many of the young graduates taking these jobs apparently see them as stop-gaps.

Some academics regard the transition from “elite” to “mass” university education as having taken place once the participation level went over 15%. But to look at it another way, mass possession of degrees having been achieved, it is painfully apparent that not all degrees and universities are equal. There is still an elite, particularly of institutions, and its identification may be the subject of a future posting.

Notes on the Chart

This is a blog post not a PhD thesis, so I have used a broad brush with the data. However, I’ve explained the sources and what I’ve done, and if anyone wants to improve it, please do.

G+

This is the percentage of maintained secondary school pupils taught in grammar schools (taken from a House of Commons Library Note, Grammar school statistics, SN/SG/1398, March 2009) which I have enhanced by 3% to allow for the direct grant grammar schools and by 3.5% to allow for a purely nominal half of the attendance at independent (aka private or “public”) schools being of 11+ pass standard. I cannot establish whether children at private schools were obliged to sit the 11+ examination. G+ is a percentage of pupils being taught rather than of the age group. The pass level for the 11+ varied between local education authorities (LEAs) and seems to have been about 25%. For comparison with U, the level of grammar school and equivalent participation was probably about 30% in the Tripartite period (see below).

U

From 1950 to 1998 this is the Age Participation Index (API) which was defined as the number of UK-domiciled young (aged less than 21) initial entrants to full-time and sandwich undergraduate courses of higher education, expressed as a proportion of the averaged 18 to 19 year old GB population. After 1999 the data is for the Higher Education Initial Participation Rate HEIPR20 (17-20 year olds English domiciled and in English Welsh and Scottish institutions, here and similar later). The government’s target is for HEIPR to be 50% for the age range 17 to 30. This extension currently adds another 10-11% to the HEIPR20 figure.

I realise comparing G+ with U is a little like apples with pears, but I hope not as bad as apples with bananas, and that it serves to make the point.

The Tripartite System

This was the theoretical arrangement of state funded secondary education between 1944 and the 1970s in England and Wales, and from 1947 to 2009 in Northern Ireland. State funded secondary education was to be arranged after the 1944 education act into a structure containing three types of school: grammar, secondary technical and secondary modern. Pupils were allocated to their respective types of school according to their performance in the 11+ examination which was administered by the LEA. In practice the system was “bipartite” as there were very few technical schools. It was also disliked by the majority of voters whose children were, by definition, excluded from grammar schools.

In July 1958 the Labour leader Hugh Gaitskell (educated at Winchester College, a prestigious public (ie UK private) school) formally abandoned the Tripartite System, calling for "grammar-school education for all". This policy was taken forward by Gaitskell's protégé, Anthony Crosland (educated at Highgate, also a public school), who advocated comprehensive schools as less divisive, and vigorously pursued the goal of their introduction, and the consequent elimination of grammar schools,  on becoming Education Secretary in 1965.