Taipei Times (TT): You’ve said that too many students are going to college. In Taiwan, even though tuition is a fraction of the cost in the US, the situation is quite similar. Students with lower and lower college entrance scores are now able to go to college. Do you think it would be more beneficial for the economy if low-scoring students joined the workforce rather than going to college?
Richard Vedder: In Taiwan and in the US, you get the same result. In Taiwan, a large percentage of unemployed have a junior college education or more. Increasingly you’re getting less educated, less bright, less motivated students going to college than before. Not everyone can be brilliant. We know every society has people who are more accomplished than others. So you’re getting the less accomplished parts of society going to college. It’s true we have more high-tech jobs, it’s true that we’re not just making shoes.
In Taiwan, the low-wage factory jobs are migrating to Bangladesh, mainland China, India, etc. They’re leaving Taiwan — that’s the historical pattern. So you’re going to have more and more people going to college because all the new jobs are high-tech or scientific and so forth, and you do need people with good mathematic or science skills, or accounting or engineering skills. But you still need people to work at McDonald’s or retail stores. You need people to drive trucks and trains, or construction jobs. You don’t need advanced education to do these jobs.
I’m not against those people going to college. That’s a matter of individual choice. But when a government subsidizes resources for people to go on and get an education that makes it more and more expensive to society as a whole, and then they end up going to work as an assistant manager at McDonald’s, we’re not accomplishing the best use of our resources. Particularly since populations are aging worldwide. I suspect they are here.
The aging population is an enormous burden, and we’ve got to be careful of how we use our resources. The government uses collective resources and I think there’s a possibility that even in Asia you will have over-educated people. India puts great emphasis on education; everyone wants to get degrees. The growth in the Indian economy is great — but it’s not so great. There are a lot of them working in call centers, or handling your Visa bills, or handling your airline reservations.
Education is important, but like everything else, it has to be done in moderation. There are diminishing returns.
TT: Do you agree that in tough economic conditions, many people stay in school because they are actually afraid they won’t be able to get a job? What do you think of this phenomenon?
Vedder: In the US and maybe in Taiwan there’s a credential effect. You’ve got to have a little piece of paper that says, “I am educated” — meaning, I have a college education. Whether that piece of paper, in fact, really means anything is another question. But from the practical point of view, for the young person who’s going to school, it is meaningful. If my kids told me they weren’t going to college, I would kill them, because I said if you want to be successful in the world, you have to go to college. But that’s what most American parents tell their children. I suspect that is increasingly true here in Taiwan.