The stories careers counsellors tell you
When I was in high school, there was only one option: university. I went to a selective entry school (Melbourne High) where the average IQ was high enough that they had to give us special hats to keep our brains from overheating;) And of course, the message was that being a MHS graduate, you would go to uni. Any other option was economic suicide. I remember having seminars from the careers counsellor showing tables like this one:
Average Rate of return for undergraduate degrees in Australia [1]
(a 2012 study funded by DEEWR)
| Discipline | Length of degree | Males | Females |
| Humanities | 3 | 3.00% | 9.00% |
| Science | 3 | 10.00% | 11.00% |
| Allied Health | 3 | 13.00% | 14.00% |
| Mathematics | 4 | 13.00% | 12.00% |
| IT | 3 | 17.00% | 15.00% |
| Engineering | 3 | 15.00% | 14.00% |
| Architecture | 4 | 9.00% | 6.00% |
| Medicine | 5 | 16.00% | 15.00% |
| Nursing | 5 | 17.00% | 14.00% |
| Dentistry | 3 | 20.00% | 17.00% |
| Education | 5 | 11.00% | 10.00% |
| Visual and performance | 4 | 0.00% | 0.00% |
| Commerce | 3 | 17.00% | 15.00% |
| Law | 3 | 17.00% | 15.00% |
| Economics | 4 | 18.00% | 15.00% |
| TOTAL | 3 | 15.00% | 12.00% |
Looks pretty clear doesn't it? Go to uni (and choose the right degree - not Humanities or Performing/Visual Arts!) or you're going to end up driving a Toyota Corolla for the rest of your life.
The effect of ability bias
There's something Daly and co missed out: ability bias. Ability bias is the self-selection effect. The upper echelon of society go to university because they think it's what they need to be successful. But does university make them successful or would they have been successful anyway?
Mariotti and J. Meinecke [2] examined the effect of ability bias on rates of return from a university education. Rather than a 12-15% average return, they found that going to university only gave a 3.0-7.4% return on investment after factoring in ability bias. If we split it down the middle and call it 5%, you may as well just put your money in a high interest savings account.
Is a university degree worth it?
So for a 5% rate of return, you have to slog your guts out for three years, missing out on getting work experience and building networks with anyone who could actually give you a job. Of course, university is a pre-requisite for some jobs (e.g. medicine, law) but for the majority of careers, you don't need a degree to get started. The allure of a degree is that it will allow you to leap-frog the job-market competition and get into a higher status and higher paying role more quickly. The numbers don't seem to support this. Sure you get a little boost from university, but it's not going to give you that much of an advantage.
Career uncertainty
What's more both of the studies I mentioned looked at university graduates. What they're ignoring is the 17% of students who abandon an undergraduate degree before they're done [3]. This has got to shave off even more from the rate of return.
What's the bigger risk?
University was always couched to me as the 'safe option'. Having gone through the university system, I now see it as an enormous risk. You spend 3-5 years of your life on a course of study for a career that you may or may not follow.
My experience has been that my 6 years at uni (4.5 years in real terms, but in my insanity I tried to do a second full time degree at the same time), I have learnt very few skills that are valuable to me now. I've moved away from my Environmental Science degree and am now running my own IT consulting business. My consulting clients have not yet asked me to tell them about the universal theory of tectonics, demanded that I perform calculus, required me to write an environmental impact assessment or given me a test tube full of smelly E. coli and asked me to identify what strain they are. They haven't even asked me if I have a formal qualification in IT (I don't).
The alternative
If I could have my time again, instead of going to uni, I would have focused on three things:
1. Volunteering
2. Starting a business
3. Short courses
Volunteering
The advantage of volunteering is that it massively reduces the barrier of entry to the job market. As an 18 year old, I had no real expenses and had no real need for a high paying job. By volunteering at organisations that interested me, I would have (and have in real life) discovered if I really was passionate about that career, gained some practical skills and built up some networks with people who might give me a paying job.
Starting a business
Having spent the last two years starting five businesses, I've discovered that when I'm personally invested in a project, I put far more effort into learning than if I'm just writing an essay to try to get a good mark. Starting a business has helped me to develop the skills that matter: communication skills and organisational skills. School and university didn't teach me how to work well in teams or to deal with clients. Yet communication truly seems to be the distinguishing factor between people who succeed in the workplace and people who don't.
Short courses
Maybe I have a sucky memory, but I find it difficult to remember what I learnt four years ago at university. Concepts seem to only stick in my head for a couple of months unless I use them. Rather than flagellate myself and eat 50 tablets a day of fish oil to try to improve my lackluster memory, my experience shows me that I'm better off doing a short course. I'm hopefully going to do a Certificate IV in Small Business Management this year. It should take about 9 weeks. My bet is it's going to be more valuable to me than my entire 4.5 years of study.
What do you think? Has uni been worth it for you?
References
[1] A. Daly, P. Lewis, M. Corliss, and T.
Heaslip, The private rate of return to a university degree in Australia.
2012.
[2] M. Mariotti and J.
Meinecke, ‘Bounds on the Return to Education in Australia using Ability Bias’,
Australian National University, College of Business and Economics, School of
Economics, ANU Working Papers in Economics and Econometrics 2011-551, 2011.
[3] ‘High university
drop-out rates cost $1.4bn’, TheAustralian. [Online]. Available:
http://www.theaustralian.com.au/higher-education/high-university-drop-out-rates-cost-14bn/story-e6frgcjx-1225940860074.
[Accessed: 24-Jan-2013].
3 comments:
Jeremy Nagel you've raised some valid points, you just gotta perhaps think more outside the box, this is life. Personally, coming from a place like yourself, I've seen people who want to go on and become specialised in a profession such as med or law but most other courses you don't need it and the three things you suggest are all doors which lead onto other doors if that makes sense. Personally I believe there's light at the end of the tunnel and most importantly to have the mental resilience for any setbacks. Btw, is anyone from your company coming to see me anytime soon?
The key point here is that some jobs require a degree, and others don't. Obviously if your desired vocation doesn't require a degree, then short courses and vocational training are going to be far more practical and economically advantageous. That is, of course, if you know what you want to do once you leave school. I'm not advocating that if you don't know where you're headed, then go to uni and hope that the penny drops at some stage as that just builds up that debt. Don't forget that uni provides networks that you wouldn't have had access to otherwise, and also teaches skills that are applicable to many professions, such as writing and researching content. I would argue that you would not have been able to write your blog and reference it as you have had you not gone to university. I also argue that perhaps you may not have known how to find and extract the data you use to support your argument without the skills you acquired through a university education.
My view is that university is mainly about proving you can learn independently. Highschool holds your hand too much, and so employers don't know what you are capable of.
If you have some other way of proving your capabilities (like an extra curricular activity during your highschool years) then that may be worth more than a degree. The only way to know is to talk to an employer and find out what they are looking for.
Of course some jobs require certain degrees and anything research related usually requires honours or above.
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