Jan 17, 2017 @ 07:00 AM 871 views
Obama's Misguided College Pledge, Eight Years Later
Preston Cooper ,
Contributor
I write about the economics of higher education.
Opinions expressed by Forbes Contributors are their own.
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But when everyone has a college degree, the credential doesn’t help any individual job applicant gain an edge over his competition.
When the supply of college graduates outstrips demand for their skills, their earnings premium falls—as basic economics predicts.
US President Barack Obama makes his way to board Air Force One before departing from Andrews Air Force Base in Maryland for Jacksonville, Florida to attend the wedding of a White House staffer on January 7, 2017. (MANDEL NGAN/AFP/Getty Images)
Imagine that you and I are applying for a job, for which we are equally qualified. Therefore, we each have a fifty-fifty chance of getting hired. However, if I pay $1000 to take a seminar and spruce up my résumé, I will increase my odds of getting the job to 90%. Similarly, if you take the seminar and I do not, you will have a 90% chance of landing the position. But if we both take the seminar, our résumés will again be identical—so our chances will return to fifty-fifty.
Here we have a prisoner’s dilemma. The individual incentive is to take the seminar and improve each of our chances of getting the job. But if we both take the seminar, we will not have improved our chances at all. Worse, we’ll each be out $1000. The best-case scenario for both of us is to skip the seminar altogether—but our individual incentives will not deliver that outcome.
http://www.forbes.com/sites/prestoncooper2/2017/01/17/obamas-misguided-college-pledge-eight-years-later/#74cb677454a5
