The university lottery

IT IS fashionable to be gloomy about the costs and benefits of a degree. In America a majority of people now tell pollsters that they think going to university is not worth it. For the average undergraduate that is far from the truth. In rich countries people who hold a bachelor’s degree earn over 40% more than those who do not. This premium has remained lofty, even as the number of university-goers has soared: some 33m people are studying undergraduate degrees across the rich world today.

Yet those average figures hide queasily large differences. For a shocking share of students, the returns from attending university are puny. About 25% of men and 15% of women graduates in England would have been better off financially had they not bothered. In total, student debt has reached $1.6trn in America, 60% more than is owed on credit cards. Low earnings help explain why about a fifth of America’s student borrowers were in default before the pandemic.