Clive Crook has a new column out titled America’s human capital is tested in which he offers insight into the fact that
baby-boomers departing from the labour force will have better educational qualifications than the younger workers replacing them. If the ultimate source of an economy’s ability to grow and prosper is its human capital, the US is in trouble.
He offers a number of possible explanations for this:
1) Saturation - a natural ceiling has been reached
2) Education becomes obsolete - a 30 or 40 year old college education is probably out of date
3) On the job training has replaced formal education
4) College "is not in fact a good investment [for students] and that it is an even worse investment for the taxpayers who subsidise it."
Seeing number 4 is very interesting because almost everyone takes the view that college is a great investment with phenomenal returns (see the College Board publication Education Pays).
Unfortunately, the wages of college educated workers have been increasing more slowly than the cost of college, which means that the returns to college (monetary ones at least) have been falling. As students take out more and more loans (over 21,000 on average according to the Project on Student Debt), we may see more and more 18 year olds make the decision that college is simply not worth it. The return on college may still (probably is?) positive on average, but as long as tuition continues its explosive growth, the return on college will fall, and point 4 will be seen as the leading cause in the decline of enrollments.