Freakonomics Goes to College, Part 1: A New Freakonomics Radio Podcast

Listen now:



Our latest Freakonomics Radio podcast is called “Freakonomics Goes to College, Part 1.” The gist: what is the true value these days of a college education?

(You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

As you can tell from the title, this is the first episode of a two-parter. There is so much to say about college that we could have done ten episodes on the topic, but we held ourselves back to two.

The key guests in this first episode are, in order of appearance:

+ Allen Ezell, a former FBI agent who co-authored the book Degree Mills: The Billion-dollar Industry That Has Sold over a Million Fake Diplomas.

+ Karl Rove, the former senior adviser and deputy chief of staff for President George W. Bush. Rove, it turns out, is not a college graduate. He is, however, a published author — of Courage and Consequence: My Life as a Conservative in the Fight.

+ David Card, an economist at Berkeley who has done a lot of research and writing on the value of education.

+ And our own Steve Levitt, who has this to say about college:

LEVITT: The best way I think an economist thinks about the value of education is tries to figure out how the market 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 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 me say, buying a lot of education is a really good deal.

David Card, meanwhile, helps us think through the upside of education in a down economy:

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.

Karl Rove warns us not to look upon his trajectory as one to emulate:

ROVE: I mean, 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 Gateses of the world who go on to found Microsoft after, you know, dropping out of Harvard, are few and far between. The Karl Roves who go on to be, you know, senior adviser to the President after never completing your degree, are few and far between.

And Allen Ezell talks about all the fake diplomas that are circulating out in the world, including thousands upon thousands of medical degrees:

EZELL: As to where these people are that bought those 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 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.

You’ll hear how we picked up an extra degree ourselves, via Diploma Makers:

Dubner with a new fake diploma, a Ph.D. in Animal Health

Also: we got an interesting e-mail this morning from someone who’d already listened to the podcast. His name is Tom Breuel and he asks a great question:

We have credit reporting agencies and driving history databases.  

Why isn’t there a central database where employers can check quickly whether a degree (e.g., medical degree) was granted to a particular person and granted by an accredited institution?

Sounds like a good business idea to me! How much would your firm be willing to pay in order to easily find out if a job applicant was faking his or her academic credentials?

One good interview that unfortunately got cut for space was with Steve Canale, the manager of global recruiting and staffing services for GE. Here’s a taste of what Canale had to say:

CANALE: One of the things that I’ve done in the past is I’ve talked to parents at the high school in Fairfield. And one of the things that I tell them is after you go to the admissions office at any school, go to the career center. Because it’s a great place to find out whether your son or daughter is going to have a good chance of finding a job, because you can find out what companies actively recruit at the school. And if you can see big-name companies, you kind of know that the education there is valued by employers. … I would say follow your passion, figure out what you have to do. Once you get into a school, what you do there is totally up to you. You could go to a second-tier school, let’s call it, and graduate in the top three percent of your class. And you would have a very bright future, you’d have very high prospects. Some kids today are graduating with $200,000 in debt, $100,000 in debt, and maybe they just weren’t the best consumer, you know, when it came right down to it.

As you can see, the first episode covers quite a bit of ground.

In Part 2, due out in two weeks, we focus on the (fast-rising!) cost of college and try to figure out a) where all the money goes; b) whether, the cost notwithstanding, college is still a good deal; and c) how, specifically, college does what it does.

Thanks for listening!

Julie Segal

Really looking forward to Part II now. I have not seen a good analysis of why the cost of college has gone up so much more than inflation. And don't tell me how few students pay the "sticker price" of college. That only encourages gaming, ethical lapses and, probably, fraud.

Neil (SM)

Hehheh. Noticed at the Amazon Link to Enzell's book about Fake Diplomas, in the "Frequently Bought Together section Amazon pairs that book up with "Get Your Degree Online." I wonder if that means people think the Fake Diploma book is a how-to!?


a little sleight-of-hand from rove- most people don't skip college because they're stupid, but because they're poor- different public policies flow from these different scenarios

robyn g

Should the question be that of who goes or who finishes and why some, but not others start and then stop? What distinguishes those who finish from those who don't. For me, college was not the hurdle, graduate school was. I had no one who went through the rigorous process of getting a PhD who could advise me til I found a great teacher. That took me 8 years. I have had a multitude of students in the latter position of starting and stopping at community colleges in the NY area. And I had many students wishfully thinking that they want to to be x, but not knowing how to get there, what is required etc.

Joe J

Have heard many ideas how to help studen loans, from allowing students to default, to getting the gov't to take over loans. Neither one actually hits the problem of why tuition has been going up so fast. The simple answer is why would a college lower tuition, They have politicians giving them free advertising that college is a golden ticket. Then they don't actually have to produce that ticket.

One market way of fixing this is to simplify the buyer payer system. Have the university offer the loans, with defaulting be an option. Colleges would have an actual incentive to control expenses and control the quality and value of their degrees. If the degree is not worth the paper it's printed on the student is much more likely to default.

Matt Gomez

I enjoyed this podcast. I really understand why this goes on. HR departments use a degree as an easy way to filter job applicants. It hit home for me when I bid on job in the company and my lack of a degree was an eliminator not my work performance.

The real slap in the face came when after I completed my degree, I went to inform HR of the change in my status, and they didnt care.

Joe J

It's not just an easy way to filter job applicants, it's one of the only legal or lawsuit proof ways to do it. I hired Joe instead of the 1000 other applicants. Just need one of those applicants to try to sue or accuse in the press of discrimination, but with the degrees, I can say, we hired Joe because of a BS in XYZ. Not because he will use XYZ, or that we actually care about XYZ, but it will stop the lawsuit and bad press.

Enter your name...

And since white people are more likely to have such degrees, then the fact that requiring this actually-unnecessary degree gives me a whiter workforce is just a happy accident, right?

Part of the training for affirmative action programs is to convince the HR departments not to require any more degrees than are actually necessary for a position. "College degree or equivalent experience" is a solid, non-discriminatory approach for many mid-level positions.


For the informed consumer, there's a lot more to consider than just degree vs no degree, since all college degrees are not equivalent. Different types of degrees have different values. For instance, I would guess that the value of a BS in say Computer Engineering is going to be worth considerably more than one in Political Science.

Then there's the school question. A Political Science degree from expensive Harvard is probably going to be worth a lot more than one from affordable Hometown State, but (guessing again) the Harvard Computer Engineering degree is not going to be worth a lot more than the HSU one.

Steve Worona

Not to minimize or excuse the problem of diploma mills or forgeries, but isn't a 1% rate of abuse in a relatively unregulated market pretty good? How does that compare to banks or cars? Or economists' projections?

Edwin Goddard

Really enjoy the podcast. I'd love it if you could tell me what the rocking jazz track at the end of the piece is?


I know why this wasn't covered in this section: because way more people go to college than go to law school...AND people generally don't like lawyers....But law school is the biggest scam in education right now.

My wife went to a community college, then a state school, made a 3.85 in undergrad and still graduated with $18k in student loan debt. She applied for every scholarship she could. Then came Law School.

Everyone she knew told her it was a smart choice to go to law school because "lawyers make a lot of money." Parents, teachers, professors, everyone - there was no dissenting opinion. It cost her $120k. She finished middle in her class and it took her 10 months to find a job. She was applying to places that pay $10/hr and getting rejected. No one called her back. Only through sheer tenacity did she land a solid job making $50k/yr (the median wage in our state).

With taxes and health care, her cash-take -home pay is $38,224 per year, but she pays $14,400 per year in student loan payments (at 8.75% fixed for the next 24 years). Only $2,500 is tax deductable because of caps. We can’t itemize anyway because we can’t afford a house, because of student loan payments….all this meaning she really only makes about $25k/yr.

Meanwhile, the Law School keeps pumping out new lawyers every year.

Everyone she knew told her it was a smart choice to go to law school because "lawyers make a lot of money." Parents, teachers, professors, everyone - there was no dissenting opinion. It cost her $132k. She finished middle in her class and it took her 10 months to find a job. She was applying to places that pay $10/hr and getting rejected. No one called her back. Only through sheer tenacity did she land a solid job making $50k/yr (the median wage in our state).


( ____________ )

There are "better quality" fake degrees available to CIA types. Once a retired CIA officer offered me ANY Harvard or Yale or MIT degree that would withstand scrutiny by anyone.

I have often wondered if I should have accepted one. Damned....


I have a daughter who is struggling with just this question. She says that she learned more from a summer program in theater than from her whole first year at a cost of approx. 53,000(not including food and weekly expenses and is considering a non-college program in theater or dance. Seems like the question she is asking is- of what real value is that degree paper or what can it offer to me of value that I cannot get outside? And she has less than two weeks to make a decision i.e., for now one way or the other. AS I see it, her problem is not much different from other kids her age. My daughter knows two boys who are leaving college 1) because he started a business and it has been successful and 2) another to try his hand at acting school. Seems to me such a struggle is a good thing. The problem is for colleges to provide kids with a reason to continue and, unfortunately, in the absense of such knowledge(self-awareness) on the part of college professors, kids will be leaving. Take Math for example. The question recently was raised about Algebra- is it necessary? I would ask how so? How, for instance, would an understanding of Algebra or of Mathematics (plural) as a whole help my daughter or these boys succeed in realizing their dreams? I did a little qualitative research to see if my daughter's subjective i.e., intuitive understanding of her problem were accurate. She believes herself to be unable (with a 3.4 average and not too high SAT's to get into a serious school and my research thus far has confirmed her intuition. I was told by two Ivy schools that quantity alone matters. I tried to push a college advisor to answer the question of the range of students accepted in an effort to determine whether she had a specific shot at all, but she refused (kept on mentioning the mean average) which has nothing to do with the individual. My point, if college administrators or profs don't understand the full scope of math, how can students grasp its value. My daughter seems to understand it better than they do. This, by the by, is not intended as a criticism, but as another way of describing the results of research on the matter of the science of Mathematics . Robyn Goldstein, copyright, 2012.



I think your daughter really should be asking about the odds that anyone graduating from a program in theater or dance - college or not - is going to be able to support him or her self by working in that field. From casual observation, it seems that most are likely to find themselves a career in waitressing or something similar between infrequent acting gigs.

Just a random thought: if you took her college expenses of $53K/year for four years and invested them in a good mutual fund instead, it should return something over $8K per year for the rest of her life. Would her current or proposed career path do better?

parent and Social scientist

I can only speak for myself and I would say, money is not every thing. I could have been a full time prof., a social science researcher at a major hospital in NY, full time research consultant. buyer at a department store, accountant.... My mom wanted me to become a lawyer-- but I would have sacrified myself to the point of never achieving what I set out to accomplish. That means more to me than the money or the status. For me now, it is just a matter of putting the facts in their proper place that takes a bit of time. But I am there/here and I say, there is nothing more satisfying than knowing you have achieved your objective. I just need a bit of courage - the courage to finish and allow others to scrutinize it. And knowing that I have the support of my husband and daughter means a great deal to me. I read what I had written yesterday to my daughter. She said, "mom, you are a good writer." She asked, what did you get in English in HS. I said C's, but I write now every day. What I did not say was, going to an Orthodox Yeshiva set me personally way, way back in English and to such an extent that I have never fully recovered. AS far as science is concerned, with the exception of math, I am largely self taught. The Yeshive did not offer courses in science, my intro to science (aside from math) began in the middle of 6th grade at a public school. So in answer to your question of whether or not following your heart is a real good idea- there is no doubt in my mind of it. But you have to know what you are doing and that is something that can be taught.



Will you be looking at the returns from non-bachelor professional/technical degrees? I am sold on the value of higher education (I'm an engineer myself), but I can't figure out if there is more value to encourage a child who is interested in medicine to explore certification in ultrasound technology, labratory work, or other professions that require practical skills. So many kids I went to school were told "oh you like X, you should be Y" (math = engineer/accountant, science = doctor, english = mainstream writer, etc.) only to be frustrated, disappointed and feel like a failure when they found university wasn't for them. In theory, I'd rather my kids get a practical two year degree that qualifies them for interesting work over fighting through a generic bachelor's degree. Have there been studies on ROI of this type of post high school, professional technical degrees?

Enter your name...

Answer: do both. Do a lower level career now, and have her work part time in that field to put herself through the rest of the schooling. Anyone looking at pharmacy school should be working summers and weekends as a pharmacy tech. If you want to become a registered nurse or a nurse practitioner, get your Certified Nursing Assistant and work for the nursing home nearest campus. If you want to be a surgeon, then get your EMT. These jobs pay better than the on-campus student jobs and are worth major bonus points when you apply to the graduate programs. (It also makes those programs easier, because you already know some of the material.)


Is this an economics blog?? What about the opportunity cost?

If instead of going to an average state university and spending $25,000 a year including room and board for 4 years, someone went to work, and then put the $100,000 into investments which would appreciate at an average rate of return, how would they compare with one who went to college by the time they retired.