Freakonomics Goes to College, Part 1 (Ep. 86)

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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 here.)

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!

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I wish it were possible to figure out how much of the 8% average increase in income is due to "having the piece of paper" and how much is due to the brain-stretching aspects of education. I don't use calculus in my real life, but I think that learning calculus helped me learn how to think more clearly and to focus my attention better.

(Basic algebra, on the other hand, is actually practical in my everyday life. How else do you figure out how many cans of beans you can afford, given the other items in your grocery cart and the cash in your pocket?)

Joe S

Just a couple if items:

- Karl Rove is from the era or generation (pick one, it doesn't matter) which didn't require a college degree. A college degree is required in today's society. It doesn't matter what you have the degree in just as long as you have one.

- There are a few college degree verification clearinghouses presently in existence. Most large companies pay for this. Colleges want / need money and these clearinghouses charge clients a fee for services and access. There is no central clearinghouse and there will never be one. The federal government might be the only ones that could pull something like this off but it will still be a logistical nightmare. Colleges are state or county entities and some are even grouped at the district level which covers many municipalities.

- Steven Levitt's statement that most of his students do not remember even the most basic information from his classes is not surprising. Most of what students learn is not going to be pertinent and used in their eventual job or career. Also, keep in mind what the faculty members are doing. Most have a master or PhD and have probably never worked in the real world. Now they mindlessly regurgitate the same curriculum (until the curriculum committee or department of education changes it) while occasionally getting an article of book published ("publish or perish" still exists at most colleges regardless of tenure). This is acceptable for static subjects (e.g.: math, history, music theory) but useless for other more fluid and skills-based subjects (e.g.: engineering, computer science, accounting).

- The value of a college education can also be valued at what employers are willing to pay for someone that has one. In the present economy with unemployment slightly under 10% and with an ever increasing amount of college graduates entering the labor market every year, this increases downward pressure on wages and thus lowers the "value" of a college education.

- I work at a college. The incompetent faculty members and administrators that work here have masters and/or PhDs. Apparently one has to have a PhD in Education to be really incompetent and out of touch with reality.

I'm still looking forward to Part II.


Karl Milla

I believe there's an angle to this theme that hasn't been explored yet and that is very "Freakonomish".
Are people with a degree more successful in their professional lives 'because' they have a college degree or are those people naturaly inclined to success and see the diploma as a way of selfdevelopment?
In other words, is this a case of cause and effecf or simply a correlation?


It's already a well known theory in economics called "the signalling theory of education". It completely explains why the education itself is worthless, it is merely used as a signalling device to tell others about one's inherent traits. The education doesn't cause anything, it is merely associate with people that seek success.

I hope Prof Tyler Cowen or Prof Bryan Caplan get interviewed for the next episode, so they can present their theory.

Risa Ryan

In Part II, could you please mention that there are places where diplomas can be verified? They are just as easy to find on the web. We do it before hiring anyone.


I was very interested to listen to Freakonomics Goes to College, especially David Card's comments about the 'returns to education' and the correlation between education level and income. This is something my husband and I have talked about with regard to our own selves, siblings, and spouses. Consider this: My husband and I both have master's degrees. My siblings and their spouses have the following: (1) PhD + PhD (2) bachelor + master (3) master + high school degree. My husband's siblings and their spouses: (1) bachelor + bachelor (2) bachelor + bachelor (3) bachelor + bachelor (4) bachelor + bachelor (5) bachelor. Aside from one sibling and her spouse, my husband and I have the highest combined level of education; however, of all of our siblings and their spouses, we make the lowest combined income.

When I think about our (me and my husband) high level of student loan debt combined with our low level salaries, I am disgusted (and we are not new to the workforce).

My conclusion: There seems to be a wide gap between earning potential between those who hold college degrees and those who do not. However, among those who do have degrees, there are many factors beyond level of education that play into a person's earning potential.



Please, please, PLEASE discuss this idea in Part II. Or if you don't, how bout in Part III?

Adam Frank

HEY Dubner... how about doing your job.
There was a little "hidden" added value to Rove "attending" college. Deferment.

"Except for a lapse of several months, Selective Service records show presidential adviser Karl Rove escaped the draft for nearly three years at the height of the Vietnam War using student deferments."

This is a terrible lapse of journalistic integrity on your part. This directly relates to the subject of the podcast and is especially relevant because Rove is partially responsible for getting us into the Iraq War. You didn't even bring it up. You need to correct this asap ON AIR.


What happened to the easy to use link to the mp3? Forcing people (me) to use iTunes is not nice.


...then there are the for-profit universities offering degrees with little else behind them but for the piece of paper. these seem like diploma mills, extrapolated to the next logical level but in this case, paid for with federal or military benefits money. diploma mills have just cut out the middle man in the for-profit college model.