00:00:05
so I'm finishing up a book project and
00:00:08
the book is uh tentatively titled
00:00:10
parents as Venture capitalists because
00:00:13
uh the idea is to see if we can trick
00:00:15
parents into reading this book and think
00:00:18
about what's going on with uh education
00:00:20
in particularly college and the context
00:00:22
for this is that there's an enormous
00:00:25
amount of complaining going on in the US
00:00:28
now by the employer community
00:00:30
about difficulty in hiring people
00:00:32
finding people with the right skills and
00:00:35
much of that complaining seems to be
00:00:38
directed at
00:00:40
education and uh one of the things we
00:00:42
wanted to look at was to see whether
00:00:43
this is actually true that is whether
00:00:44
there's any Merit to these complaints
00:00:46
and when you look carefully it appears
00:00:48
that there really isn't any Merit to it
00:00:51
that the big change seems to be that
00:00:54
employers are not training people that
00:00:57
uh entry-level jobs have largely gone
00:00:59
away way and that what employers are
00:01:02
really after is hiring people who can do
00:01:06
the job as soon as they walk in the door
00:01:08
and the proof for that has to be that
00:01:10
you are currently doing the same job
00:01:13
someplace else for a competitor that's
00:01:15
what everybody wants to to hire
00:01:17
nevertheless uh the pressure has come
00:01:20
around to students and to colleges to
00:01:22
try to get more vocational and so I'm
00:01:26
trying to look at what that means and
00:01:29
whether it's actually a good idea and
00:01:32
the conclusion I think pretty clearly is
00:01:34
no it's not a good idea and you can see
00:01:37
obviously that it's taken to Extremes in
00:01:39
some places there are courses at most
00:01:42
every state university on turf
00:01:44
management for example which is you know
00:01:46
about golf courses and there are courses
00:01:48
and majors in things like Adventure
00:01:51
tourism and casino management and every
00:01:54
little weird niche in the market and I
00:01:57
think the uh ultimately I think the
00:02:00
issue here is that higher education
00:02:02
postsecondary education is just not well
00:02:04
suited to deliver job training and
00:02:08
getting your first job is probably not
00:02:12
ultimately what your college education
00:02:13
is supposed to be about uh but for
00:02:16
parents of course it's a big issue of
00:02:18
how much money you're spending for this
00:02:21
and whether there will be a payoff at
00:02:23
the at the end of it so I'd say at the
00:02:26
moment there's an awful lot of concern
00:02:29
parents are wearing my kid going to get
00:02:30
a job the employers are complaining we
00:02:32
want to hire people with a particular
00:02:35
set of skills the colleges are kind of
00:02:37
in the middle uh but it's a peculiar
00:02:40
supply chain problem I think at the
00:02:42
moment the the parents and the students
00:02:45
potential students are so far removed
00:02:48
from where the employers are in terms of
00:02:51
information but also just in terms of
00:02:54
timing the employers are saying here's
00:02:56
what we want but it'll be five years
00:02:57
we're not making any promises and the
00:03:00
kids are trying to pick majors and
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colleges to go to based on the job
00:03:03
market and it's it's really a mess right
00:03:06
now I think is the
00:03:11
punchline so I think the the takeaways
00:03:14
at the moment maybe the first takeaway
00:03:16
is that there's an incredible amount of
00:03:19
variation in how well different colleges
00:03:22
prepare you for all kinds of things uh
00:03:26
when we hear policy makers talk about
00:03:28
the need for more people go to college
00:03:30
and um you know everybody President
00:03:33
Obama says Needs at least a year of some
00:03:35
sort of
00:03:36
college the variation is so astonishing
00:03:41
that talking about college in general
00:03:44
doesn't really make very much sense you
00:03:46
know there are maybe 10% of colleges in
00:03:49
the US where going there actually hurts
00:03:52
your rate of return if you look at what
00:03:54
you have to pay to go there and what
00:03:56
you're likely to learn from that
00:03:58
afterwards in terms of your Market
00:03:59
market value the best thing you could do
00:04:01
is drop out that you're really not
00:04:03
gaining anything at all from those
00:04:04
schools uh and there are others that you
00:04:06
know you have a terrific even immediate
00:04:09
return um and still there are others
00:04:11
where we think the long-term value of
00:04:13
the education is way better than the
00:04:15
first year job you're going to get out
00:04:17
of this so I think the big return is
00:04:20
that there's a huge variance the
00:04:23
information is really poor about which
00:04:25
schools are good ones or maybe even how
00:04:27
to think about the problem and so it
00:04:30
does suggest there's a real opportunity
00:04:33
for information to make a difference and
00:04:35
a little more careful thinking to make a
00:04:37
difference as
00:04:41
well I think the the thing that I found
00:04:44
most surprising and disappointing I
00:04:46
guess really is how messed up the system
00:04:48
is I mean the extent to which uh kids
00:04:51
are borrowing enormous amounts of money
00:04:53
and going into debt um chasing what they
00:04:56
think are job opportunities that may or
00:04:59
may not be their years in the future I
00:05:01
think the focus on very practical Majors
00:05:06
um is I think ending up really turning
00:05:08
around to bite people if you happen to
00:05:11
graduate in a year when there's no
00:05:13
Casino management jobs what do you do I
00:05:16
think you're probably worse off uh than
00:05:18
you would be with a Classics degree you
00:05:20
know sort of equally unprepared for
00:05:22
anything but at least um you know
00:05:25
literate and understanding good
00:05:28
arguments and critical thinking
00:05:30
um but you know a lot of very
00:05:33
vocational um experiences in College
00:05:36
learning a lot of very practical things
00:05:38
in the long run I think is very much a
00:05:40
waste of time so I think the uh maybe
00:05:43
the surprising conclusion first how
00:05:45
messed up the system is and secondly the
00:05:47
idea that being very
00:05:49
vocational probably actually hurts
00:05:55
you so I think a practical consideration
00:05:59
here start starts with the maybe the
00:06:01
first assertion and that is there's a
00:06:02
heck of a lot of uncertainty and so
00:06:05
planning today where you think the job
00:06:08
market is going to be in five years is
00:06:10
probably a Fool's errand it's just not
00:06:12
going to work very well so uh one of the
00:06:14
things we know in general from all
00:06:16
aspects of business is shortening the
00:06:18
forecasting time works a lot better so
00:06:22
one of the obvious takeaways is delay
00:06:25
your choice of major and delay your
00:06:28
specification
00:06:30
uh as long as possible and so in
00:06:33
practice one of the things that also
00:06:34
means is if you go to a college where
00:06:37
it's going to be difficult to change
00:06:39
Majors that's a real problem because
00:06:41
it's quite likely that the student will
00:06:44
end up being stuck there longer maybe
00:06:46
having to do a fifth year as a way to
00:06:49
try to get the courses that allow them
00:06:51
to graduate with the new major they
00:06:53
would like I have a son who did exactly
00:06:56
that it ends up being a lot more
00:06:58
expensive if it takes 5 years to get a
00:06:59
degree as opposed to
00:07:05
four well you know some obvious ones are
00:07:08
if you can cut down the cost UPF front
00:07:10
it's easier to get a better return on
00:07:12
your investment and the information on
00:07:14
what kind of school pays off is not um
00:07:18
maybe not completely clear but uh it
00:07:21
it's it may not be the case that it
00:07:24
matters so much if you don't get into
00:07:26
these super Elite schools so if you're
00:07:29
level below there it might not matter
00:07:31
very much uh there's a big area of maybe
00:07:35
50% of the distribution of colleges
00:07:37
based on quality that if you're in there
00:07:38
anywhere in there it doesn't matter all
00:07:41
that much I'd say the other maybe most
00:07:44
interesting thing that I seem to be
00:07:46
finding is that there's kind of an
00:07:49
emerging model where um your
00:07:53
employability after you graduate is
00:07:56
driven by things that don't have to do
00:07:59
with your college education per se they
00:08:02
have to do certainly with the
00:08:03
internships you've gotten and there are
00:08:06
even a a network of vendors now that
00:08:09
will give a recent college graduate work
00:08:12
experience in some field where perhaps
00:08:15
they never majored in college or know
00:08:18
nothing about so there are places that
00:08:20
will turn you into an IT person in six
00:08:23
months for example uh and it's not
00:08:25
classroom training so much it's real
00:08:26
work experience you learn by doing as an
00:08:29
appr model might might teach you and at
00:08:32
the end of that experience what you get
00:08:34
are uh references basically that say you
00:08:37
know this person did the website for me
00:08:40
this student solved this it problem for
00:08:43
us they managed this project whatever it
00:08:44
is so it might very well be that you're
00:08:47
better off thinking about your
00:08:50
employability being driven by
00:08:52
experiences which are extracurricular as
00:08:55
opposed to curricular things that go on
00:08:58
in the classroom
00:09:03
you know I think there are three sets of
00:09:04
stakeholders in this discussion about
00:09:06
colleges in the workplace there's
00:09:08
obviously parents um and we've been
00:09:10
talking a little bit about the parents
00:09:13
uh concerns here about getting their
00:09:15
kids jobs and the importance of thinking
00:09:17
longer term there's also schools
00:09:19
colleges in the middle which have been
00:09:21
playing something of a brokerage role uh
00:09:24
but may not have been doing a very good
00:09:26
job of it to to be honest it's not clear
00:09:28
that they are
00:09:30
um you know really engaging the
00:09:32
employers especially and that they're
00:09:35
necessarily doing the best for the for
00:09:37
the kids and then there's employers on
00:09:38
the other end and I think the lessons
00:09:41
for employers is that if you think about
00:09:43
this as a supply chain you would never
00:09:46
manage any other supply chain like this
00:09:49
where you just complained loudly uh that
00:09:51
you weren't finding what you wanted from
00:09:53
your suppliers and you're just hoping
00:09:54
they're going to produce it um at a
00:09:57
price you want to pay they're just going
00:09:58
to deliver it to your
00:10:00
right but that is the way most employers
00:10:02
seem to be thinking about the labor
00:10:03
market that somehow the right people
00:10:05
will just show up when they want them
00:10:07
with the right skills I'd say the way to
00:10:10
think about this as a supply chain
00:10:11
problem is the employers who are the end
00:10:14
users here really have to get closer to
00:10:17
their suppliers which is the very least
00:10:19
of the schools and maybe even before
00:10:21
that uh the parents you know one of the
00:10:24
interesting things we see um in other
00:10:26
countries especially in India is the
00:10:28
extent to which which employers are
00:10:31
reaching out to parents uh even when
00:10:33
they hire people you know they make the
00:10:35
pitch to the parents not to the kids and
00:10:39
try to make the pitch at the school
00:10:40
level before kids pick their Majors
00:10:43
maybe even at the high school level
00:10:45
before they pick their colleges about
00:10:47
what the opportunities are like with
00:10:49
their company or maybe even in that
00:10:55
field President Obama has had this
00:10:58
effort for a little while a few months
00:11:00
on about accountability and higher
00:11:02
education and the scorecard they're
00:11:04
trying to produce for higher education
00:11:07
which is a good idea as a parent or any
00:11:10
kind of student or anybody you could go
00:11:12
on the website and try to see what does
00:11:14
it cost to go to school here what are
00:11:16
the job prospects like if you graduate
00:11:18
with this degree or that degree and I
00:11:21
think it's a it's a good start you know
00:11:23
I think we've still got a problem that
00:11:24
there's so much variation in the
00:11:27
experience uh of individual students
00:11:29
students depending on when they go and
00:11:32
which major they choose at which school
00:11:34
um that it's not a perfect solution but
00:11:37
at least it's a start uh to get some
00:11:39
sense about whether you're sending your
00:11:41
kid to a an expensive college that's
00:11:43
going to do them any good or not uh and
00:11:45
I think it's really hard to know you
00:11:47
know schools have gotten very good at
00:11:49
marketing or at least better than the
00:11:51
parents are at understanding the
00:11:52
marketing and where do you go for
00:11:54
objective information so you know it's
00:11:56
not a bad
00:11:58
start
00:12:02
well one of the things we hear a lot is
00:12:03
about the stem skill problem and stem
00:12:07
stands for science technology
00:12:09
engineering and math and the idea that
00:12:11
we need lots more stem graduates well uh
00:12:15
there's no real evidence for that and if
00:12:17
you look at where they actually get jobs
00:12:19
for example uh in the real Sciences like
00:12:22
like biology about 20% maybe 25% of
00:12:26
students who graduate with a degree in
00:12:28
biology
00:12:29
get a job that uses biology and even in
00:12:32
fields which we think are hot like it
00:12:35
only about 2third of people who graduate
00:12:38
with an IT degree get a job in it and
00:12:41
when they're asked why they don't the
00:12:43
main explanation is they couldn't find
00:12:44
one right so the idea that if you get a
00:12:47
stem degree you're suddenly going to be
00:12:49
fixed your problems are solved really is
00:12:52
does not seem to be
00:12:57
true you know there's a lot of reason
00:12:59
research on labor markets and there's a
00:13:01
huge industry in higher education but
00:13:04
you know one of the issues in research
00:13:06
is that research tends to fit within
00:13:09
disciplines within paradigms where they
00:13:12
don't talk to each other very much and
00:13:14
so one of the things I'm trying to do
00:13:16
here is to look across these different
00:13:18
fields so you can see what the highered
00:13:20
folks are saying about educational
00:13:22
quality you can see what the labor
00:13:24
market folks say about the wage outcomes
00:13:27
from different jobs um you can can see
00:13:29
what people in learning say about you
00:13:31
know what sorts of contexts teach people
00:13:34
the most and you know you can start to
00:13:36
see maybe some patterns across these
00:13:42
things you know I think this is a uh
00:13:45
this is kind of a Capstone production
00:13:48
right so I've done uh and doing some
00:13:51
pretty focused studies and things like
00:13:53
financial aid and student outcomes uh
00:13:55
but you know a book like this which is
00:13:57
pulling together a lot of things know is
00:13:59
kind of it so my guess is I'm not
00:14:02
following up this with anything um
00:14:05
following this this is kind of it this
00:14:07
is sort of what I know on this topic
00:14:08
certainly the the current generation of
00:14:11
kids in college have lived through a
00:14:13
really difficult time worst labor market
00:14:15
since the Great Depression and it's
00:14:17
understandable that people would be
00:14:19
anxious about this and especially
00:14:20
parents of kids who are entering college
00:14:23
now and those are about to leave I think
00:14:25
the the good news is the economy is
00:14:27
getting better and it's unlikely to look
00:14:30
the way things look now in four or five
00:14:33
years it's more likely to look like the
00:14:36
way things did 10 years or so ago so I
00:14:38
think the current circumstances are
00:14:40
pretty unusual I think the other thing
00:14:42
is it isn't clear that obsessing about
00:14:46
jobs um now when you're in early in
00:14:49
college or in high school for sure for
00:14:52
sure it does you any good right uh it
00:14:54
isn't clear that simply getting into the
00:14:57
best college you can is going to make a
00:15:00
defining difference in your life
00:15:02
afterwards and particularly your
00:15:03
economic prospects afterwards that
00:15:06
there's plenty of time you got the rest
00:15:07
of your life to worry about your uh
00:15:10
about your career and your success is
00:15:12
going to have more to do with how you
00:15:14
manage those points than anything you
00:15:16
can do about it in high school or or
00:15:18
even in college for that matter so I I
00:15:21
think the the advice for parents is
00:15:23
things are going to get better they're
00:15:24
already starting to get better and I'm
00:15:27
worrying about it right now doesn't do
00:15:29
very much good cuz there's not much
00:15:30
that's going to
00:15:34
[Music]
00:15:53
matter
