The College-Graduate Glut: Evidence From Labor Markets

By Richard Vedder

The price system works marvelously to allocate resources in our society, but in higher education, prices often do not reflect the true value society places on resource usage, as they are often distorted by a variety of policies. The price of elite colleges, for example, is actually well below what demand-and-supply conditions would warrant, while the price of college in general has been distorted upward by extravagant federal student financial-assistance programs (although some would argue with that contention).

But labor markets are largely free of these distortions, and very recent evidence from them on the whole supports the hypothesis that the huge gains from obtaining a bachelor’s degree may be diminishing for a simple reason: Supply has been rising faster than demand for college graduates.

Visit: http://chronicle.com/blogs/innovations/the-college-graduate-glut-evidence-from-labor-markets/32997

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