Fallacies of the Overeducation Hypothesis

Frank Pasquale

There are enduring tensions in American higher education policy. Some see learning as a primarily public good, resulting in a citizenry capable of self-governance. Others characterize it as a private good, to be purchased by savvy consumers. A truce of sorts has emerged over the past few decades, where both sides agree that colleges' and graduate schools' primary purpose is to create a well-qualified workforce. But that overlapping consensus has generated problems of its own, which threaten to undermine the autonomy of faculty, students, and staff.

Once education is seen as primarily a tool of workforce development, it is subject to the same pressures that labor itself experiences: toward just-in-time, contingent, and bare-minimum models of provision. Thus the current vogue for nano-degrees that deliver just the skills needed for the worker's next contingent and precarious position, and no more. Partisans of both "the end of college" and "the end of law schools" tend to assume that such skills are to be defined by the employer.

But what about the skills needed to resist such terms of employment--either personally, or as part of a social movement? What about the habits of mind necessary to see emerging opportunities, or to create them? Are historical sensibilities, and ethical values, of some social value, even if they do little in the short term to raise one's starting salary? Are developing any of these abilities part of the educator's mission, too?

The "overeducation hypothesis" about both college and law school fails on its own narrowly economistic terms, as peer-reviewed work on labor economics has shown. But its greatest failure is one of imagination: about what the human services sector of education could be, given some responsiveness to the gravest concerns of workers themselves.

Sadly, we see the same pattern of crabbed cost-cutting in health care, too. As I noted in a special issue of Law & Contemporary Problems, the problem of "overtreatment" in health care has all too often transmogrified into a set of policy imperatives designed to do little more than reduce taxes on the wealthiest. As I explain in my piece, The Hidden Costs of Health Care Cost Cutting:

Even if policymakers frankly accept a health expenditures goal along the lines of “the same percentage of GDP as other advanced industrial economies,” there is critical conceptual work to be done before pursuing it. Before imposing blunt instruments of cost containment like vouchers and changed tax treatment of insurance, policymakers need to evaluate which subsectors within the health sector are undervalued and which are overvalued.

It makes little sense to aspire to cut health expenditures in general, particularly if those that are now absent, undersupplied, or undercompensated are worth, in the aggregate, more than the waste now being paid for. Far too many policy discussions proceed on the assumption that (1) waste is easy to identify, (2) once identified, there are tools available to deter spending on it, and (3) deterring spending on waste will lead to reallocation of that spending to either worthier health spending, or worthier spending in the economy as a whole. Only on rare occasions do all these assumptions clearly hold.

The reallocation question is very important. For years, critics of loan forgiveness programs for students have argued that they are a form of "welfare," when in fact they're a necessary corrective to the excessively harsh bankruptcy regime imposed on student debt. But the critics are getting a hearing from the GOP, and guess where the money is probably going:

[A]t some point, there is going to be a deal on appropriations and raising the debt ceiling. There is a lot of pressure to raise defense spending. Some of these student loan items [like the Public Service Loan Forgiveness Program] could wind up on the table in such a deal.

We've seen this pattern again and again: 1) create a scare about excessive "entitlement" spending, 2) spur either tax cuts for the rich or reallocation of "entitlement" money to the force or finance sectors, and 3) repeat once excess military spending once again drives budgetary imbalances. Maybe the US has made a political decision that it wants more drone pilots and less public defenders. But let's not pretend that's because the present educational system is "overeducating" the latter, or needs to be retooled to generate more of the former.

The cost-cutting drive in health and education also forecloses conversations on the larger role these sectors could play to alleviate the time bind on harried, low- and middle-income families. As a former primary family caregiver for a disabled elderly relative, I can say from personal experience that the US has not devoted enough resources to home health care, chronic disease management, and transport services for individuals too sick to drive to care. And as someone well aware of US colleges' often shameful dependence on underpaid, contingent, adjunct labor, I feel that US higher educational preeminence has been purchased at the expense of mass exploitation of those getting PhD's. My piece on health care cost-cutting also notes the oft-unintended distributive consequences of cut-rate care. And I've made similar points on cut-rate or abbreviated education, too.

As William Baumol has argued, the "cost disease" of educational and health services is not only "survivable," but a sign that we, as a mature economy, are investing more in improving individuals' life chances and opportunities. Technocrats of both parties may be on the warpath to shrink the share of GDP going to health and education. But they are also well-aware that the force and finance sectors are probably going to fill whatever vacuums they create.
Posted 9:23 AM by Frank Pasquale [link]