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Megan McArdle

Megan McArdle - Megan McArdle is a senior editor for The Atlantic who writes about business and economics. She has worked at three start-ups, a consulting firm, an investment bank, a disaster recovery firm at Ground Zero, and The Economist. More

Megan was born and raised on the Upper West Side of Manhattan, and yes, she does enjoy her lattes, as well as the occasional extra-dry skim-milk cappuccino. Her checkered work history includes three start-ups, four years as a technology project manager for a boutique consulting firm, a summer as an associate at an investment bank, and a year spent as sort of an executive copy girl for one of the disaster-recovery firms at Ground Zero … all before the age of 30.

While working at Ground Zero, Megan started Live From the WTC, a blog focused on economics, business, and cooking. She may or may not have been the first major economics blogger, depending on whether we are allowed to throw outlying variables such as Brad Delong out of the set. From there it was but a few steps down the slippery slope to freelance journalism. She has worked in various capacities for The Economist, where she wrote about economics and oversaw the founding of Free Exchange, the magazine's economics blog. She has also maintained her own blog, Asymmetrical Information, which moved to The Atlantic, along with its owner, in August 2007.

Megan holds a bachelor's degree in English literature from the University of Pennsylvania and an M.B.A. from the University of Chicago. After a lifetime as a New Yorker, she now resides in northwest Washington, D.C., where she is still trying to figure out what one does with an apartment larger than 400 square feet.

College bound

By Megan McArdle
Oct 14 2008, 4:55 PM ET Comment

Right now, Cato Unbound is having a pretty fascinating conversation about college, and whether it is overprescribed for American youth.  Bryan Caplan asks:

My key problems with Murray's essay are his arguments, not his conclusion.  I don't see that Murray has a coherent story about how the BA persists despite its inefficiency.  The signaling model does tell such a story, so Murray ought to at least take it seriously, and tell us how it relates to his thesis.

If he does embrace the signaling model, though, Murray's distributional analysis will probably turn out to be wrong.  The main losers are taxpayers who subsidize the wasteful signaling competition, and consumers who pay more for the labor that colleges divert away from the productive part of the economy.  Murray is right, of course, that talented workers without BAs suffer, too; but we should not forget that below-average people without BAs actually benefit from employers' imperfect information about their productivity.

I'm not sure this is right.  This presumes a few things, like that people who get useless BAs end up doing whatever they would have absent the BA.  But getting a BA has an opportunity cost.  For one thing, it may use up funds that could have gone for useful vocational spending.  For another, those who pursue college degrees they aren't really suited for give up several years of earnings, and more importantly, experience.  Early experience seems to matter; the minimum wage literature indicates that failure to get a job as a teenager can have a permanent negative impact on later earnings.

The use of a BA as a signal is helpful to those who are below-average academically only if we presume that there is no other, useful training they could undertake, or that there is no more efficient means of sorting workers.  If we instead imagine that three years of desultory course-flunking could instead be spent acquiring a marketable skill, or seeking out work that suits them, it seems more costly.

We should also consider that not everyone loves school.  To people who are academically inclined, three years of school that doesn't result in a degree doesn't seem so bad--a pity about the degree, of course, but at least you got a lovely long vacation.  For people who hate classwork, however, it's torture.  Encouraging people to spend years doing something they detest in order to acquire a not-very-useful signalling device seems like a fairly great social loss.

I'd hate to think of us adopting something like the German system, where kids are relentlessly tracked into their future lives by the time they're fourteen.  On the other hand, the Germans get one thing very right:  they provide an excellent career path for those whose talents lie outside of college.






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