Tuesday, May 31, 2011

If you think college grads make much more $$$ than non grads you’ve failed Stats 101

Seriously, you could walk around and say, “Jesus never lived,” and people nod their heads and say, “ok, there is religious freedom in America and what he just said is fine,” but if you say “kids should not go to college” its like you breached the highest, holiest, divine hymen of American religion. - James Altucher

In his article 10 More Reasons Why Parents Should Not Send Their Kids to College, James Altucher articulates the myth behind college grads making more money than non-college graduates.  This is what usually happens when data is shared by those with self interest (read making $$$) who know that they are misleading others and only giving them part of the story.  

Altucher explains why this is inaccurate logic in reason 3.  

Statistics say: College graduates make much more money than non-college graduates. Clearly anyone who states this has failed “Statistics 101” in college. We might know correlation but we don’t know cause-and-effect here. Since our generation (post-baby boomer) basically everyone goes to college except people who absolutely failed high school, then of course it makes sense that achievement-minded people make more money than  individuals who are not achievement-oriented.

A better statistical study, which nobody has done, is take 2000 people who got accepted to Harvard 20 years ago, and randomly force 1000 of them to not go to college. Then, at the end of 20 years to see who made more money. My guess is that the 1000 who didn’t go to Harvard would’ve made more money. They would’ve been thrown out of the nest to learn how to fly that much earlier and a 5 year head start would’ve made enormous difference (I say 5 years because that's the average amount of time it takes to finish college. Not 4, as many think).

Read the rest of his reasons in the original article here.

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