Freakonomics Goes to College


Season 3, Episode 4

Is a college diploma really worth the paper it’s printed on? In this episode of Freakonomics Radio, host Stephen Dubner breaks down the costs and benefits of going to college, especially during an economy that’s leaving a lot of people un- and underemployed. The data say that college graduates make a lot more money in the long run and enjoy a host of other benefits as well.  But does that justify the time and money? We’ll hear from economists David Card, Betsey Stevenson, and Justin Wolfers, as well as former Bush adviser Karl Rove, who made it to the White House without a college degree. Amherst College president Biddy Martin describes what an education provides beyond facts and figures, while Steve Levitt wonders if the students he teaches at the University of Chicago are actually learning anything.  Finally, a former FBI agent tells us about the very robust market for fake diplomas.

This episode is a compilation of two earlier podcasts: Freakonomics Goes to College Part 1 and Part 2.

Audio Transcript

Stephen DUBNER: Hello, Mr. Ezell?


Allen EZELL: Yes.


DUBNER: Hi, Stephen Dubner, nice to meet you.


EZELL: Stephen, nice to meet you. And you won’t believe what I’m holding in my hand.


DUBNER: Let me guess because I just got a degree in psychic work, so....


EZELL: I’m impressed, over the internet?


DUBNER: Of course, where else? I’m going to say that you have a diploma in your hand, a college diploma from maybe Appalachian State University.


EZELL: Yes, founded in the year 1899. I like their logo down at the bottom.


DUBNER: And what did I get my degree in?


EZELL: Oh, I have no idea; this is a blank.


DUBNER: Oh so it can be whatever I…


EZELL: Sure.


DUBNER: I’ve always wanted to be a vet.


EZELL: Well, if that turns you on, then that’s fine. And I’m sure that the animals would have fun with your children.


DUBNER: And do you maybe also have a graduate degree from Columbia University as well?


EZELL: “The trustees of Columbia University and the City of New York to all persons to whom these represent may come greeting, be it known that having completed the studies and satisfied the requirements for the degree of…” and it’s a blank also.


DUBNER: Hot diggity, because I did get a degree in writing there, but I really thought I should have become a doctor instead. So…


EZELL: Hey, you can be whatever you want to be. Remember, I’ve got two MDs.


ANNOUNCER: From WNYC and APM, American Public Media: This is Freakonomics Radio, the show that explores the hidden side of everything. Here’s your host, Stephen Dubner.

DUBNER: On today’s show, we’re talking about the value of a college degree. Now for the record, I really did go to college. I got my undergraduate degree, in broadcast journalism actually, at Appalachian State University, and an MFA in writing from Columbia. Which is why Allen Ezell brought those particular diplomas to the radio studio. Now, you may be asking: who is Allen Ezell and how did he get hold of these blank diplomas? Well, he used to work for the FBI.

EZELL: I retired in late 1991, and for twelve years I handled what was called Operation DipScam, Diploma Scam. It was a series of investigations on degree mills, diploma mills throughout the United States, and some were abroad.

DUBNER: Here’s how it started. One day in 1980, an informant came into Ezell’s FBI office in Charlotte, N.C., and laid a couple of fake college diplomas on his desk. He told Ezell about a man in Greenville, S.C., who was selling them. So Ezell made a phone call. He didn’t say he was with the FBI. He said he was accountant, hoping to get a promotion …

DUBNER: That first day when you got on the phone with the president of the university in Greenville, South Carolina, what was the name of that university?


EZELL: Southeastern.


DUBNER: Southeastern, and was it a real college at all?


EZELL: That word real…Yes it was. Well, it’s a relative term. There was a point in time, probably eleven years before that that it did have a building. There later came a point in time when they had a fire or something when it stopped being real in that sense. And then the proprietor started operating the school out of three rooms of his house.


DUBNER: What was this fellow’s name?


EZELL: Dr. Alfred Jarrette.


DUBNER: Okay, so you called him up that day. You called up Dr. Jarrette at Southeastern University, and what did you say to him?


EZELL: We negotiated the price for my bachelor’s, master’s, and doctorate with no work whatsoever.


DUBNER: Wait, you bought a bachelor’s, master’s, and doctorate all at once?


EZELL: Sure, triple combo, have it backdated, you know, with transcript.

DUBNER: During that conversation, Ezell made it sound as if he and a colleague might be helpful to Jarrette in growing his diploma business. So Jarrette invited them to visit.

EZELL: He took us on a tour of his house and the three rooms involved. He showed us the school filling cabinet. He showed us our student files, and the other student files. He showed us blank diplomas, transcripts, seals, ribbons, all the trappings that it would take. Now, all of this information we used in our affidavit for the federal search warrant.

DUBNER: Ezell and some other agents put together their case, and then went back to see Jarrette, this time with a search warrant.

EZELL: I tried to explain to him that life is not over. This is just a search warrant. So we spent two or three hours there. We did what we were supposed to. And then we left town and went back to Charlotte. But we later learned the following day when the phone rang that after we had gone Dr. Jarrette went out with a lady friend of his for dinner, started giving away some of possessions, and then went into the bathroom and took a thirty-eight, put it up to his head, and committed suicide. We did not see that coming, we did not see that coming at all. We had not even read all the boxes of stuff that we had. When we did read it we saw that he had approximately six hundred plus graduates over eleven years. We had federal, state, and county employees. We had law enforcement. You name the profession; we had it.

DUBNER: That was Ezell’s introduction to the world of fake diplomas. Over the next decade, he helped uncover a huge counterfeit market: companies all over the country, doing millions of dollars’ worth of business.

EZELL: The lollapalooza, the biggest one that we’ve ever seen, called University Degree Program, and they operated from ’98 through about ’03, by our calculations they grossed four hundred and fifty-three million dollars. And the paper that they sold will pollute the market for years to come. And what makes it even worse, they sold degrees in anesthesiology, cardiology, dermatology, endocrinology, gastroenterology, neurology, obstetrics, oncology, ophthalmology, pediatrics, psychiatry, radiology, surgery, urology, and I would ask you where do you think the people who are employed that bought degrees in those majors?


DUBNER: Well that’s what I want to know, Allen, because if you’re saying this one firm grossed four hundred and fifty-some million dollars over what, a five-year period, the average price let’s say was a thousand dollars let’s say.


EZELL: No, it was more. It was about twenty-four hundred and you had a five hundred dollar discount. So let’s go in at two thousand.


DUBNER: Even so, that’s more than two hundred thousand totally fake degrees. And that’s…


EZELL: I told you, they were the lollapalooza.


DUBNER: And that’s one firm. That’s one firm. So I have two questions for you. One is where the hell are all these fake doctors and how do I stay away from them, and two is if there are two hundred thousand roughly from one firm, how many fakes are we talking about in toto?


EZELL: We have no idea. Let me put it this way, the United States, all the colleges and universities in our country award about one point three million degrees a year. Approximately one percent of that, we believe, is the amount of phony degrees that are sold in our country each year. As to where these people are that bought these degrees, we don’t have a clue. And I say that because no one in law enforcement, federal law enforcement chased them. We don’t know who they are. We don’t know where they’re employed. Only occasionally will a graduate flush up. He could be practicing in a hospital. He could have something go awry in a medical procedure and then they start looking at his credentials, and then they find out that he’s a phony. You would be shocked at the number of people that buy this garbage and then put it on their resume, and then post this online.

DUBNER: When Ezell retired in 1991, Operation DipScam ended, and, he says, the FBI pretty much stopped investigating fake degrees. The industry has exploded since then, and today, you can buy just about any kind of degree online. There are two basic kinds of operations. One is simply a counterfeiting company, which sells fake versions of real degrees, from the university of your choice. The other is a diploma mill -- essentially a fake university that issues its own degrees, like Southeastern University, Dr Jarrette. So, imagine you’ve got a low-level job and want a promotion that requires additional schooling, but you don’t want to go back to school. You tell your boss you’re working on a degree at night. And then, a year or two later, you give your boss your new fake diploma. Thanks, diploma mill!

EZELL:  As of today there’s no federal criminal legislation regarding using diploma mill paper in this regard.#


DUBNER: You sound as though you’re not happy that there is no law against that.


EZELL: Oh no, I’ve never been happy. The way you get somebody’s attention is with some handcuffs. The threat of a civil fine or embarrassment will not do it. We need a federal law that forbids diploma mills, non-accredited institutions, institutions that don’t have regional or national acceptable accreditation. It should not be this easy.


DUBNER: Does it still burn you after all these years of pursuing these guys to know that so many people are cheating so baldly?


EZELL: Oh, it always has. I have two daughters: one that graduated from University of North Carolina-Chapel Hill, one that graduated from the University of Florida. I have bought counterfeits of both of their school diplomas with transcripts. And I probably paid less than eight hundred dollars for both. And you can imagine the thousands of dollars to send them to school. No, I cannot take away their level of learning that they had by going to school. But by buying a counterfeit I can devalue the piece of paper that they walked out with at the end. Because it undermines all of our legitimate education, every one of us that have spent time, money, effort, sweat, all nighters, it devalues the degrees that we have.  

DUBNER: If Ezell’s ballpark guess is true, that roughly one percent of college degrees are fake, just think about that. If you work in government, or healthcare, or maybe in public radio, for every one hundred coworkers, one of them is a fraud. You’ve got to wonder if there’s something about how we look at real college degrees that makes a fake one so attractive and so easy to get. Coming up on Freakonomics Radio, we’ll talk about real college degrees, and how much they matter.  Do you really need one if you want to work in, say, the White House?

Karl ROVE: I was in the last generation stupid enough not to get a college degree.

DUBNER: And later in the hour, we’ll look at the rising  cost of college.

Betsey STEVENSON: I went to Wellesley College. I think it was a great place, and I saw the other day their tuition for the incoming class and almost spit out my drink.

DUBNER: And if you want more Freakonomics Radio, you can subscribe to our podcast on iTunes. It’s a lot cheaper than college. In fact: it’s free.



ANNOUNCER: From WNYC and APM, American Public Media, this is Freakonomics Radio.


DUBNER: So today we are talking about the value of college. Earlier, we heard from Allen Ezell, a former FBI agent, who talked about how easy it is to buy a fake diploma. As he told us …

EZELL: You can be whatever you want to be.

DUBNER: You can be whatever you want to be. We say that a lot—parents to kids especially. But what we really mean is: You can be whatever you want to be, but first you need a college degree. Degree mills exploit our collective college anxiety, and they tell people: don’t worry about the education, it’s the piece of paper that gets you the job. Plus, a real degree is expensive. Not only the money but four years of your life. And, especially when the economy is crummy, it’s unclear if that investment is paying off. Here’s the thing. When you look around in a variety of fields, you can find some really, really successful people who didn’t finish college. And not just in sports and entertainment. I’m talking about people at the top of knowledge fields, where smarts are key. Bill Gates. Mark Zuckerberg. Richard Branson. Even in politics, you can find a few.

ROVE: Hey Stephen, how are ya?

DUBNER: That’s Karl Rove, former senior advisor and deputy chief of staff for President George W. Bush, currently a commentator for Fox News and a contributor to the Wall Street Journal. And at first glance, Rove’s academic credentials seem to be commensurate with his achievement.

DUBNER: So, here’s what I read from your bio, that you were a Colorado native who attended the University of Utah, the University of Maryland, College Park, George Mason University and the University of Texas at Austin. But what I can’t tell from that is if you actually graduated college. So tell me if you did or not.


ROVE: No, I never did, otherwise I would say I was a graduate of one of those colleges.  


DUBNER: So I’m curious to the degree to which you were leaving college because you were working. It wasn’t you were leaving college to eat Cheetos on the couch, right?


ROVE: Well, yeah, no. I left college because I had a greater economic opportunity. You know, I left the University of Utah where I’d been for two years in order to accept a job at the Republican National Committee. At the height of the Vietnam War went to the University of Maryland, lost my student deferment, was almost drafted, went to George Mason in order to keep trying to get the college degree, and same at the University of Texas. And you know, I was cobbling together courses here and there to but each time the chance to get a college degree was stymied by having sort of an unusual opportunity.


DUBNER: In each case, in each of these universities where you were enrolled, were you a political science major?


ROVE: Yes, probably the most useless degree that one can seek, but I’m sort of stuck.

DUBNER: Rove is widely considered a political genius. He was the architect of President Bush’s two electoral campaigns, and had a lot of policy influence in the White House. And he’s a guy who left college because —well, because it just wasn’t worth it to him. He found he could learn more in the field than in a classroom. Listening to him, you start to think: if you can learn so much by doing, why bother getting a degree?

ROVE: But mine’s an atypical experience.  I think I was in the last generation that could be stupid enough not to get a college degree. We live in a society in which credentials matter. I mean, the Bill Gates of the world who go on to found Microsoft after dropping out of Harvard are few and far between. The Karl Roves who go on to be Senior Advisor to the President after never completing your degree are few and far between.

DUBNER: So as of today, how close are you to getting your undergraduate degree? How many credit hours shy are you?


ROVE: I think I’m about, my language requirement and about, I think about six hours or nine hours beyond that. Math course, science course, and language. The language is going to kill me.


DUBNER: And realistically, how old are you now, Karl?


ROVE: Sixty-one.


DUBNER: Realistically, do you think you’re ever going to get your college degree?


ROVE: Let’s keep it out there as a goal. Life is about, you know upward, upward vision, about moving towards ever higher plateaus and mountain peaks, so let’s keep it out there.


David CARD: We don’t really know why people choose different levels of education.

SJD NARR: That’s David Card. He’s an economist at the University of California, Berkeley.

CARD: Some people think it’s all parental background. Some people think it’s other attributes.

DUBNER: If you ask an economist a simple question about college -- like: Is it worth it? -- he’ll tend to focus on the most tangible outcome, what economists call the “returns to education.” Which pretty much boils down to how much more money you’ll make if you go to college.

CARD: In my family we have all five possible levels of education. We have somebody who didn’t finish high school, somebody who just finished high school, somebody who has kind of three years of college, vocational college, somebody who has a bachelor’s degree with a teaching certificate, and then me who has a PhD. And if you just were to look at our family every step of the way, the returns to education are enormous, I mean, totally enormous.


DUBNER: So the one who did not finish high school does what for a living?


CARD: Basically cleans houses.


DUBNER: Yeah, and is the level of educational attainment kind of a conversation in the family or it something that is just known, acknowledged and you know that’s the way it is?


CARD: Well, I think like many families, the next generations’ people say well should we try and convince this kid to go to college or not, and it’s easy to say well look if you go to college you’re going to have a little bit easier choices to make. Going forward, I think anybody who has kids who can possibly make it through a bachelor’s degree should really think of some way to get them through. Because I don’t see much of a future twenty years from now for the kid who doesn’t have that.

DUBNER: It’s always tempting to cast about for the anomalies, the billionaire who dropped out of college or, on the other hand, the Ph.D. who’s driving a taxi. But let’s not get distracted by the anomalies. If you want to measure the value of education, you have to think in the aggregate. And that’s what economists do. Here’s my Freakonomics friend and co-author Steve Levitt, an economist at the University of Chicago.

LEVITT: The best way I think an economist thinks of the value of education is tries to figure out how the markets rewards it, and what other benefits come with it. And one thing is clear is that the market puts a tremendous reward on education. So the best estimates that the economists have are that each extra year of education that you get is worth about maybe an eight percent increment to your earnings each year for the rest of your life. So it turns out for most people buying a lot of education, or at least for the average person let’s say, buying a lot of education is a really good deal.

DUBNER: And here’s David Card again.

CARD: In addition to that, the one who went to college will probably work for five years longer at the end of their life. They’ll probably have less months of unemployment. They’ll probably have longer hours of work while they’re working. So all and all, their total earnings will be even higher than their standard wage.


DUBNER: I mean, we’re talking about, economically at least we’re talking about black and white, over the course of a lifetime.


CARD: Massive returns.


DUBNER: Massive, massive. How does this shake out historically? In other words how was this advantage, what did that advantage look like twenty years ago, thirty years ago, do we know?


CARD: It looks like where we are today is as high as it’s ever been in the U.S. The low point was about 1975 to ’80, actually when I graduated from college. And ironically, a very well known labor economist, a friend of mine, Richard Freeman wrote a book in the late seventies called The Over-Educated American in which he argued that trends were suggesting that too many people were going to college. Now if anybody had followed that advice it would have been the worst possible choice you could have made because starting around 1978, ’79 the return has just marched up.


DUBNER: Okay, but what about now, I mean we’ve had a few years of pretty crappy economy employment-wise. Is it time to start thinking about the over-educated American problem?


CARD: I would say that returns are even higher now because of the recession. People aren’t thinking about it right. So they notice that somebody who graduates from college is having a bit of hard time getting a job, or they notice that the unemployment rate for college grads has gone up a little bit. But if you do the right counterfactual and say well what if I didn’t have a college degree, it’s much worse. The rise in unemployment was much higher for people with just a high school diploma. As has always been true in every recession, the recession is always worse for less educated people.


DUBNER: So is it safe to say then that returns to college education in the United States are historically at a high?


CARD: Yes.


DUBNER: Okay, so if that’s the case I guess that’s great news for colleges, great news for college professors like yourself, it’s great news for people who plan to go to college.


CARD: Well there is a problem. That’s the kind of the benefits side of the calculation and we haven’t really talked about the cost.

DUBNER: Ah yes: the cost. As former FBI man Allen Ezell told us, you can get a fake diploma for a few hundred dollars. But the real deal? Much, much more expensive.

DUBNER: Hey Bourree, say hello.

Bourree LAM: Hi.

DUBNER: So, Bourree Lam works here at Freakonomics Central. She’s editor of the Freakonomics blog, among other things. And you’re a fairly recent college graduate yourself, yes?

LAM: Yes, I graduated in 2007 from the University of Chicago.

DUBNER: Good school. And you studied economics at Chicago, yes?

LAM: Right.

DUBNER: So economists always talk about the returns to education, that a college degree hugely increases your chances of making a good living. So you must know these numbers heart?

LAM: Of course, all of us know these numbers are on our side and that statistically make a lot more over the course of their lives than people who don’t go.

DUBNER: And you take great comfort in knowing these numbers, I assume, yes?

LAM: More comfort when I was in college than now.

DUBNER: So, what’s the problem? Why do they offer less comfort now?

LAM: Well, these are numbers on average. After graduation, a lot of my friends are struggling. A lot of them didn’t get the jobs they wanted, they’re unemployed or underemployed. They weren’t doing what they wanted to be doing. It was hard to look at those numbers.

: Right, so these numbers in the aggregate paint this pretty great picture, but if you’re not living that life, it’s not so pretty.

LAM: Right. So, I called up one of my friends to talk about this. His name is Luke Anable, and we graduated together from the University of Chicago.

DUBNER: Did Luke study economics as well?

LAM: No, he studied English.

DUBNER: And what’s Luke doing for a job now?

LAM: He’s a bartender in Tuscon.

DUBNER: All right, so let’s hear what he had to say.

LAM: Has anybody asked you, like, what are you doing with your degree because of what you’re doing?


Luke ANABLE: I think so. I think my parents finally stopped asking that question, which is nice.


LAM: Yeah, I guess in the media and in general there’s this conversation about whether college is worth it. So I know you don’t have second thoughts about that, you’re glad you went.


ANABLE: Yeah, definitely.


LAM: Yeah, but that kind of like, what that next step is is kind of blurry for us.


ANABLE: I think so. And I think for how sort of positive, and confident, and proud I am of the institution, I always felt like the career programming was kind of farcical. You know, it was like the college would hire the people who couldn’t get jobs to teach you about how to get a job so they could produce the number of graduates that had jobs. It was just kind of silly. And then I think when you say is it worth it you have to ask worth what? Financially was it worth a hundred and sixty thousand dollars? I mean, I don’t know, I probably haven’t made a hundred and sixty thousand dollars in the past four years.


LAM: That’s okay, I haven’t either.

CARD: So if you’re thinking about this as an investor,

DUBNER: That’s David Card the Berkeley professor we heard from earlier.

CARD: you know, you’ve got a kid and you’re thinking of sending them to college or not, you have to pay a lot of money upfront and then reap those returns later on. And several features of that are difficult. One is the cost that you have to pay upfront has gone up quite a bit, and the second is the uncertainty involved in whether the kid will actually successfully complete the degree. It’s a pretty risky investment.


Betsey STEVENSON: I went to Wellesley College. I think it was a great place, and I saw the other day their tuition for the incoming class and almost spit out my drink.

DUBNER: That’s Betsey Stevenson.

Justin WOLFERS: I’m actually reading about the Fed right now.

DUBNER: And that’s Justin Wolfers.

WOLFERS: Members concurred that the date given in the statement would be subject to revision in response to significant changes.


STEVENSON: Justin’s obviously heard that sketch where the whole point of NPR is to bore people into submission.

DUBNER: Stevenson and Wolfers may sound a bit familiar. We’ve had them on our program before, and they write for the Freakonomics blog. They also happen to live together.

WOLFERS: We start with coauthors, then we move on to having offices next to each other, but yes we also share a home, a life, and a child.


DUBNER: They are both college professors, both of them economists, both of them in the neighborhood of forty years old. Over the course of their careers, they’ve seen the cost of college climb and climb.

STEVENSON: I mean, it is true that prices have just gone up a lot more than the prices of food, the prices of other sort of goods.


DUBNER: Maybe not gold, but I can’t think of any other things that have kept pace with tuition inflation.


WOLFERS:  I think a key distinction people need to make is between sticker price, and actual prices being paid. And all of our alarm is about the rising sticker prices. And I have no doubt that the prices that people are actually paying, which is, you know, after scholarships and financial aid, and all these different ways that we can help, I’ve no doubt that’s going up, but it’s not going up at anywhere near the rate that the sticker price is going up.


STEVENSON: And it’s not surprising that a bunch, particularly of the private schools, have increased the generosity of their aid program, so it’s not surprising that their top-end prices would go up to help make that balance.


WOLFERS: Let’s think about the school that I know best, which is Harvard, my alma mater. The cost of going to Harvard for a working-class kid has never been lower. It’s zero. So that’s a case where the sticker price is enormously high, the actual price being paid for a working-class kid is actually much lower.


DUBNER: And what’s the incentive for the institution to make public a sticker price that’s so out of whack with the actual price for a certain kind of student?


WOLFERS: So, I actually think it’s wonderful that Harvard has raised its sticker price. Very few people pay the sticker price, only the kids of the super-rich, the people who get none of this financial aid and assistance, and so on. So the higher sticker price is essentially increasing price discrimination. We’re charging the rich more for college. The question we really need to ask ourselves is are we charging the working and the middle class more or less. That’s a much, much harder question. Knowing the sticker price tells you very little about that.


DUBNER: So this is a great and important point you’re making, but I just want to know where do we find that number?


WOLFERS: You’d call a real education economist, not me.


Ronald EHRENBERG: I’m Ronald Ehrenberg. I’m a professor at Cornell University where I also direct the Cornell Higher Eduation Research Institute.


DUBNER: Ronald Ehrenberg is a real education economist.


EHRENBERG: We Should distinguish between the sticker price, the posted price that students are supposed to pay and the net tuition, which is the price that they pay once you take account of grant aid from the Federal Government, and state governments, institutional aid, and also tax credits that are provided by the Federal Government. And although the sticker price has gone up and very, very rapid rates, the rates of increase in the net tuition, which students actually pay, on average has ben somewhat more modest.


DUBNER: Okay, but still, in most cases, net tuition have gone up too, a lot. So we asked Ehrenberg, where is all that money going?


EHRENBERG: The answer is really that there’s no such thing as a free lunch. Economists are very fond of saying that, that education currently is a highly labor intensive industry. And there has not been great productivity growth.


DUBNER: Allow me to translate from economist speak. College is a labor intensive industry because it involves reall human beings, professors in this case, doing a real task in real time, which means you can’t just flip a switch and churn out more students. Unless of course you’re talking about online education, which is starting to change the college landscape. But let’s not get into that for now. So, if you want more productivity, you have to hire more people or pay the same people more money.


EHRENBERG: So, this money all comes in, and the major thing that it pays for are faculty and staff salaries.


DUBNER: And don’t forget healthcare, which is a huge part of anybody’s salary. So it’s a complex situation and there are lots of nuances: like the difference between private and public schools.


EHRENBERG: In private higher education, when tuitions go up, it’s usually because the private institutions are spending more on their students. But in public higher education, when tuitions go up, expenditures per student often go down, because in the public sector tuition increases are often efforts to try to make up for cutbacks in state support.


DUBNER: So that’s the supply side, what do we know about the demand side, the students? Here are some numbers. Roughly two-thirds of students attending college today receive some kind of financial aid: grants, loans, scholarships, education tax credits and so on. And how much does that aid help? Well, about two-thirds of the students who graduate do so with debt. And their average debt is about $23,000. Now, that’s not a trivial amount of money, but if the returns to education are as big as economists say, the math can still work. So for a family thinking about sending their kid to college, but struggling with the cost, it might help to think a bit like an economist, to think about stretching your dollars. Here, once again, is David Card.

CARD: You don’t have to live in the dorm. You can live with your parents, which is what they do in all of Europe. You don’t have to go to the elite private school. You can go to the best public school you can get into. And, you know, the reality today is the majority of kids going to college are working part-time.

DUBNER So for the most part, this seems like good news. The returns to education are huge. And college, despite some serious tuition inflation, doesn’t cost as much as it may seem, at least relative to its value. So does that mean that everyone should go to college?

STEVENSON: I think that people often make the mistake of not thinking through the problem as systematically and thoroughly as an economist would advise. So first of all, there are two major costs of college. Everybody thinks about tuition. But there is another equally important cost, and that’s the opportunity cost of not working. So when you go to college you’re going to forgo working a job that’s going to pay you some kind of salary.


DUBNER: Because right, as you describe it, let’s just imagine this mythical eighteen-year-old kid who thinks about it and says, I’m going to go spend four years and probably a whole lot of someone’s money, to produce an outcome that is not quite clear to me, versus I’m going to start tomorrow doing this thing that I am already pretty good at and I think I could be great at. That strikes me as a harder dilemma, a tougher dilemma than I think most of us think about. So how do you go around thinking through that muddle?


WOLFERS: So Stephen, I’m going to surprise you, I was that guy. I finished high school in Australia and my great passion in life at the time was horse racing. I wanted to become a professional gambler or a bookie when I grew up. And so when I finished school I was not going to go to college. I thought exactly what am I going to learn in four years of college that I couldn’t learn being on the first rung of what I saw as a career path. I had a bookmaker who was going to mentor me, and I thought this was going to be a career that I would really enjoy.


DUBNER: And we should say, and the legality of bookmaking privately in Australia versus here is what?


WOLFERS: So in Australia bookmaking is legal. So this would have been a legal career path. And I was one of those natural experiments. I was very lucky. I got fired two and half weeks, actually one and half weeks into my first job. And at that point I shrugged my shoulders and thought what the heck I’ll just go to college now I’ve got something to do.


DUBNER: So when you see these numbers, when you see such low, relatively low unemployment the more education you have, when you see relatively more money earning, earning more money the more education you have, do you ever wonder how could there every possibly be a debate about the value of college?


STEVENSON: Well, the debate is about is it worth it for the marginal kid, and if it is, what should they be doing, what should they be studying, why is it going to matter for them? And so if you trying to figure out for an individual kids what’s going to be the return for them I think it’s a lot harder.


WOLFERS: So, if you had to grade some of the exams I’ve had to grade, the worst kid in my class is the marginal kid. And that kid, most of my students are outstanding, spectacular, they learn a lot, their exams are brilliant, but the students right at the bottom it’s not clear they understand a word I said. And so I think, you know, if the alternative is casual work, retail jobs, dead end jobs, going nowhere jobs, then I would say I’d look any eighteen-year-old kid in the eye and say four more years of this isn’t taking you anywhere, four more years of college may well take you somewhere. For kids who are going to start a trade, apprentices and the like for whom four years in the workforce is going to be an investment in the future, there I think it’s a lot harder. I think if I had a kid who was good with their hands and not academically inclined, and they could find a good apprenticeship, sure I’d encourage them to follow that.

DUBNER: So Wolfers and Stevenson don’t think college is right for every kid. But what about their kid? Their daughter Matilda is three years old. And what happens if, fifteen years from now, she has a different idea?

STEVENSON: Well this is a great question because while I like her to think about there being choices in the world…


DUBNER: She has no choice in this matter!


STEVENSON: I do not want her to grow up thinking about whether college is a choice. I would be very disappointed if she chose not to go that path.


WOLFERS: Your question also comes a little late. Matilda actually assured me the other day just before bath time: Daddy I’m going to college.

DUBNER: Coming up on Freakonomics Radio, Steve Levitt tries to explain the magic that happens in a college classroom -- or maybe it’s not the classroom.

Steve LEVITT: It is kind of hard when you watch it to figure out where it is that the value is added.

DUBNER: Also, we love hearing from you -- so if you’ve got something to say, or a question to ask, or a strange fact to share, visit us at or drop us a line at Thanks.



ANNOUNCER: From WNYC and APM, American Public Media, this is Freakonomics Radio. Here’s your host, Stephen Dubner.

DUBNER: Today, we’re asking the question: is college worth it? Economists tell us that college is good for us, and not just in terms of higher pay. People who go to college tend to be healthier, and happier; they tend to live longer. So we know that college works somehow, but how? What exactly does college do to produce all those gains? Here’s Justin Wolfers again.

WOLFERS: It’s clear to me that college is a good choice for many. It’s much less clear to me why. I do the best I can when I teach, but it’s not clear that anything I teach the kids is going to make them better business people, or better members of the economy, or more productive. It’s not obvious it wouldn’t. I’m not really sure what it is. I just know there are effects.

DUBNER: My Freakonomics partner Steve Levitt, at the University of Chicago, has spent the past quarter-century on college campuses, either as a professor or student. And, since he specializes in solving economic mysteries, I went to him with the question:

LEVITT: Personally I have to say I don’t know anything about that. I watch the college production function, I watch it produce college students here at the University of Chicago. I was a college student being produced. It is kind of hard when you watch it to figure out where it is that the value is added. So, obviously I teach my students, I teach them very specific things. But I know that when I talk to them years later they don’t remember anything that I taught them. I mean, I can ask them the most simple questions about the material we covered and they have no recollections whatsoever, the typical student.


DUBNER: I’m curious, you teach, you teach at least one really big class each year right? The economics of crime is a pretty big class?


LEVITT: A hundred students, not huge.


DUBNER: And then occasionally smaller classes, yeah?


LEVITT: Yeah, mostly for the graduate students. I teach small classes for them, fifteen or twenty students.


DUBNER: Okay, so over your years of teaching, you’ve been teaching college for how long, more than like twelve, fifteen…


LEVITT: Fifteen years.


DUBNER: Okay, so you’ve seen a couple thousand people come through, and obviously you can’t know much about too many of them. But if you think about your role as a professor trying to, as you put it, teach people, you know, how to think, how to learn to think about things, problem solving and so on, what’s just your personal observation of when you’re been successful at that or how often you think you may have been successful at helping that?


LEVITT: I think it’s, I think it…I would say about five of those students have later written me and said, Hey you really helped me learn how to think. So that’s the only direct evidence I have. I give them exams. And my exams are really, a lot of my exams are about how to think. A counter argument to what I’m saying about teaching kids how to think is that the returns that students get from other kinds of education, so real, actual skills like trade schools I think there are real returns. So I did a study many years back that looked at Chicago public schools, and it turned out that the single biggest impact of school choice in Chicago schools was giving kids who were not doing well in the traditional kinds of schools the opportunity to go to trade, culinary school, or schools that actually taught them real skills. So, clearly you can see how going to school to learn real skills like nursing or something like that could have huge returns. The tougher question is these general liberal arts education, what are you learning? And that’s something that economists haven’t even tried to really think about very much.

Biddy MARTIN: I’m Biddy Martin. I’m president of Amherst College.

DUBNER: Biddy Martin is not an economist. Before becoming an administrator, she was a professor of German and Women’s studies. But as a college president, she has thought a lot about the power of education, and what happens to people during those four years. Martin herself grew up in rural Virginia. Her family expected her to go to high school, and do well, but college was another issue.

MARTIN: The family was skeptical of education. They worried about the impact of a college education, especially on girls. They made it clear to me that it was more important for boys to be educated than for me. They grew up in a time and a place when the bias against what they would have called eggheads and overly educated people included among other things I think a fear that people with a lot of education think they’re better than those who don’t have an education. So they had a fear about being looked down on, I think. They had a fear of loss, that is the loss of children who go off to college and begin to think differently, and as they used to say to me, talk differently. We didn’t raise you to talk like that

DUBNER: In high school, Martin had a guidance counselor who encouraged her to apply to college, and over time, her family came around to the idea, even supported her. But their fear that she would change never really went away. And in retrospect … they were kind of right.

MARTIN: I left home and I didn’t return to live in that area. I made choices about my life, the kind of work I wanted to do, the people I wanted to be with that were hard for them. And they never ceased being hard for them. It’s impossible to learn a completely different way of thinking about things without unlearning what one has already learned. And I think it’s important to realize that because it’s often the case now that people think about education as the acquisition of new things as if it were an unproblematic and promising process simply of adding to what one already knows or thinks. And the truth is it is transformative, and that means upending a whole set of assumptions about how to see things, what’s possible, what’s real.

DUBNER: I recently visited my undergraduate alma mater, Appalachian State University. I caught up with a few of my favorite professors, including Joe Murphy, who taught, and still teaches, documentary filmmaking. If you asked me whether I learned a lot from Joe I’d say that yes, absolutely I did. If you asked me what I learned, well, that’s harder to say. So I asked Joe to describe, from his perspective, what happens to a kid who goes to college.

Joe MURPHY: I think the best thing people can learn in college is to not be afraid of the new or the different. You know, these people come to college with a walled-off background or experience. You come you come from a high school in a small town, even a high school in a city, they don’t know many people, they haven’t met many kinds of racial ethnic groups. They haven’t been exposed to ideas that are radically different from their parents’ ideas. And so what I hope they take away from college, and I think the better ones do, is an openness to other people, other ideas, the great diversity that’s in life.


DUBNER: I’ll tell you, that's what happened to me. Even a place like Appalachian State University in Boone, North Carolina, which you would think would be pretty homogenous, some of the best friends I made here happened to be guys on the soccer team. There were the Nigerians, and Keith Lane from Ghana, and my good friend Greg Cuddy from Ireland, who unfortunately has passed away. I mean, it was a UN in the middle of the North Carolina, it was bizarre. No expectation of that. And people would hear I was from New York and they’d think I was urbane, I’m from the boondocks of New York, not from the real part, and so to me coming down all these people were these wildly worldly people.


MURPHY: I guess the negative part for me is people who come to college to accumulate credit hours. And all they’re really interested in doing is getting a degree. Because you can definitely get a degree here and know nothing, unfortunately, as I think you can anywhere. It’s sad to see young people who set such a low standard for themselves, that's to me crushing. Somebody that’s eighteen, nineteen, twenty years old, because chances are good they're going to live that way the rest of their lives, you know? I was a major in economics. The reason I majored in economics because I thought it was interesting. Isn’t that a strange reason to major in something?


DUBNER: Think that happens less these days?


MURPHY: Absolutely. People major in what they think will get them a job. People major in business because they think it will get them a job.


DUBNER: Do you blame them?


MURPHY: Um, no, I don’t. College is very expensive. People are insisting on some measure to prove that their hundred thousand dollar investment or forty thousand dollar investment is worth it. I can understand that. That’s a lot of money. But in reality, I don’t think there is a way to quantify the value of college. I know you can look at statistics about people who have a college education are better paid. I think you have to look at how quality of life issues. To me, ignorance breeds hatred. And if you can get people knowledgeable, there will be less hatred, more understanding—that’s my theory.

DUBNER: Hey, Katherine.


Katherine WELLS: Hey can I come in for a second?


DUBNER: Sure, what’d we do wrong? This is Katherine Wells, everybody, she produced this program.


WELLS: Sorry to interrupt here, but this has just made me wonder, I’m curious, is there anything you wish you could do but you just don’t have the education for it?


DUBNER: I’d like to do surgery, just casually.


WELLS: Right. Casual surgery.


DUBNER: Yeah, but I don’t really have the appetite to get that much education, but I’d like to be able to operate on people and animals.


WELLS: Well, I was thinking because when you talked to Allen Ezell, he was the former FBI agent who told us about diploma mills, you told him you’d always wanted to be a vet.


DUBNER: Yeah, a vet, yeah.


WELLS: So the radio staff and I were thinking, we don’t want you to be held back anymore, so we have a little present for you here.


DUBNER: This is too good to be true. So it’s a brown envelope, mailing envelope, that says congrats, handwritten, not an official stamp, no wax seal. Appalachian State University, the board of regents for the university upon the recommendation of the faculty conferred on Stephen J. Dubner, the degree of doctor of philosophy in Animal Health. Summa cum laude.


WELLS: Congratulations!

DUBNER: Oh my god, thank you so much. This to my untrained eye looks like a legit diploma. Looks real.


WELLS: Yeah, it’s very professional.


DUBNER:  Where’d you get it?


WELLS: Online, the company I think was called, $190, any degree you want.


DUBNER: Now that I think about it, I don’t think I’m one of those people that have my diplomas hanging on a wall. I have no idea where my diplomas are, but…


WELLS: Frame that one.


DUBNER: My PhD in Animal Health is definitely going on the wall. Thank you very much.


WELLS: Anyway, congratulations.


DUBNER: Very thoughtful.




Leave A Comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.



View All Comments »
  1. propertytaxman says:

    I loved this episode but I think you forgot one important aspect. If 1% of the degrees are fake why do we only here “occasionally” find a person with a fake degree. My running theory is that you don’t really need a degree for the job. It is a fake barrier put into the employment system to screen people. Thus the guy who tells his boss that he is taking a degree on line and gets a promotion after he shows proof of the degree was being under employed. He knew how to do the job the degree was meaningless – for both parties.

    Thumb up 1 Thumb down 0
  2. Francesca says:

    I think that the big “ROI” talk when it comes to education must really be based on fields of study that are on demand in the job market ( i.e. tech). There are a lot of useless degree programs being offered at universities that simply do not provide any ROI ( i.e ethnomusic) after graduation… like ever… unless you continue your ed to grad school to something useful. So I think that the whole ROI thing very much depends on the field of study. Also, for 35k /year universities really shouldn’t offer useless programs, those should be offered at junior colleges or other institutions that don’t change as much. Universities should use the money of all those useless programs to better the ones that really matter out there in the job market.

    Thumb up 2 Thumb down 0
  3. George Dom says:

    In your interview with Karl Rove, it was very disappointing to hear him blithely comment that he “almost lost his draft deferment” while in school at Maryland, clearly indicating the only reason he was in school was to avoid serving his country. What a manipulative coward who crows high and mightily but walks in the gutter. I’d rather hear from those who accepted their duty to serve their country when called.

    Thumb up 0 Thumb down 1
  4. Sandy M. says:

    There many staff employees working in the University of California system that have done just this: they’ve bought their degrees for the purpose of promotion.

    Thumb up 0 Thumb down 0
  5. Jenny Murphy says:

    These days a college degree has become more of a liability than an asset. College degrees today means deep debts and despair. It’s a scam that has set up by those useless academics who cannot do anything real with their lives. Forget college! High school diplomas in the U.S. are bogus enough!

    Thumb up 1 Thumb down 0