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Tuesday, June 25, 2013

Let's not confuse college with knowledge

The cost-benefit analysis of a college education in the US

I was fascinated by this interview in the New York Times with Laszlo Block, Senior VP of People Operations at Google. They seem to be doing instrumentation and analytics in the HR function, giving new insights into how things work (as opposed to preconceptions or conventional wisdom). In this, he says:
One of the things we’ve seen from all our data crunching is that G.P.A.’s are worthless as a criteria for hiring, and test scores are worthless — no correlation at all except for brand-new college grads, where there’s a slight correlation. Google famously used to ask everyone for a transcript and G.P.A.’s and test scores, but we don’t anymore, unless you’re just a few years out of school. We found that they don’t predict anything.

What’s interesting is the proportion of people without any college education at Google has increased over time as well. So we have teams where you have 14 percent of the team made up of people who’ve never gone to college.
If this is true of Stanford -- happy hunting ground for Google -- it is triply true about every other university in the world. I believe neither students nor recruiters should leave much to universities. I was particularly fascinated with the tidbit about Google staff that have never gone to college, and that this number has gone up over time. Some BPOs and KPOs in India are also recruiting high school graduates; the marginal value of college is not as obvious as it used to be.

Universities in the US have built up an imposing cost structure, where a child spends between $150k and $250k for a college education. It is going to be harder to justify these price points in the future, given the twin problems of skeptical employers (e.g. a Google that does not demand a college degree as a pre-requisite) and the new phenomenon of Internet-based learning. I have also encountered similar things in the UK, where many young people are not confident that the years and expense in college will be worth the trouble.

I suspect there will be less fat in higher education in the days to come. Perhaps we could go closer to the MIT and Caltech of old: lean structures with great scientists and less money spent on cafeterias, gyms, and administrative staff.

India's experience with GDP growth despite the lack of education

India got explosive GDP growth, once socialist policies started getting reversed, from $0.22 trillion in 1993 to $1.73 trillion in 2013. GDP per working person went up at a compound rate of 9.4% per year over these 20 years, from $374 in 1993 to $2637 in 2013. This is nominal GDP expressed in US dollars, without adjustment for US inflation, and without adjustment for PPP. On average inflation in the US is 2% so 9.4% growth in output per worker expressed in nominal dollars is roughly 7.4% in real terms.

Some of this output growth per worker came from capital deepening, the remainder came from productivity growth. The universities were bad and did not contribute much to this growth. We should reflect on how India managed to get such remarkable growth despite the lack of universities. It tells us something about the potency of learning by doing (along with substantial capital accumulation) over these two decades.

We have finished an important generation change in this period. The persons who were age 20 in 1993, who are now 40 years old, have experienced a full 20 years in the workforce while being connected to a competitive market economy, to globalisation, and to the Internet. This environment is one that is conducive to knowledge building. It is this learning by doing that gave the remarkable 9.4% per year compound growth in GDP per worker expressed in nominal US dollars, over the last 20 years.

While we have awful universities, I feel the outlook for the future is good for three reasons:
  1. Having a brand name college is not that important. How a person builds herself is far more important than a brand-name that she carries. If individuals and recruiters shift away from looking at the brand-name, and focus more on the person, that will help.
  2. The forces of competition, globalisation and the Internet are hitting India on a bigger scale today than they ever were. Twenty years ago, there was no choice of attending online courses.
  3. The children of liberalisation are now coming into leadership roles [example]. When we recruit a 40 year old CEO today, we are getting someone who grew up with 20 years of the new world. This often implies better knowledge and instincts when compared with people who suffered from Indian socialism and deprivation in their formative years. The application of this human capital into important decisions will exert a positive impact. More than in other places, we need to propel this generation into leadership roles as soon as possible.


  1. The interview of Laszlo Bock in the NYT was interesting, thanks for sharing it.

    It doesnt surprise me a great deal that so many successful software engineeers do not have a college degree. I think that particular area of work tends to lend itself much more to hands on exploration and learning by doing, and needs relatively less instruction and structure. I am not so sure this is so true of other areas.

    Two great skills anyone can possess are effective communication and critical thinking. And college remains a great place to build these. The damage India's weak university structure is perhaps not the greatest in the technical skills of our workforce, but in the communication and critical thinking skills of our general population.

    This is one reason why so many university educated Indians are still prone to reactionary ideologies and hero-worship.

    1. Its not just due to the weak university structure. China now has a good university structure but still faces this problem of encouraging critical thinking and other soft skills. Its partly a cultural problem, as alluded to by Abhishek down below.

    2. Anonymous, even though the Chinese government has invested a lot in their universities, the fundamental political setup remains the same, and dissent is discouraged at all levels. For the CCP, the motivations for good universities are prestige and good labour for the economy, not an imperative to encourage free thought. Pallavi Aiyar (who studied at St. Stephens in Delhi) spent five years teaching English in Beijing and it is useful to note some of her observations,

      "In universities like BBI the idea was drilled into students’ heads that there were right answers and wrong answers. While ambiguity and nuances may have been both sensed and exploited in practice, on a purely intellectual plane there was little space for them. For an argumentative Indian from a country where heterodoxy was the norm, this enforced homogeneity in Chinese thought and attitude scratched against my natural grain."

      "The students who marched on Tiananmen in 1989 had thus been replaced by the likes of Cindy, Grace and my other students at BBI. This was a tribe that was studiously apolitical and fiercely nationalistic. The freedoms they yearned for – to make money, to fall in love, to get double-eye lid surgery – were theirs for the taking.

      In May 2004, I spent several hours interviewing a random selection of 10 students for a TV story I was putting together to mark the fifteenth anniversary of the Tiananmen protests and killings. None of those I talked to, many of whom were top academic achievers, could describe in any detail what the issues at stake in 1989 had been. Most however insisted that the ‘incident’ could never be repeated again.

      ‘You see,’ explained Leo, a young man who styled himself as a bit of an alternative thinker, ‘students today are more rational than before.’ ‘How so,’ I asked. ‘They know the right approach to solving a problem. It doesn’t necessarily have to be violent. Gradual reform is always best,’ came the reply.

      The consensus appeared to be that the students back in 1989 had been mislead by a few ring leaders who had their own interests rather than those of the community in mind when acting to fuel ‘trouble’ thus ‘forcing’ the government’s hand. Once again, I was confronted with a situation in which my brightest students presented what was in fact official propaganda as self-drawn and carefully considered conclusions of their own."

    3. "For the CCP, the motivations for good universities are prestige and good labour for the economy, not an imperative to encourage free thought."

      Same as in India, or actually worse here. Not because of the same authoritarian reasons, but the situation is the same. Heterodoxy does not imply better critical thinking - in fact the bias because of that tends to be towards mediocrity. I'm not quite sure what the lady is trying to say. But, we have had our own socialistic, development economics nonsense coming forth from Delhi universities, so its a bit odd and ironic. While we might be argumentative, just attend a seminar or two at St. Stephens to get a sense for the mediocrity and the cultural problems in India.

      While I mean no offense, one of the cultural problems is indicated by yourself. There was no need for your comment and it did not add anything of substance to neither my comment nor the original one. It was merely to gloat in the shortcomings of another system, rather than to focus on the more relevant Indian context.

    4. Anonymous, lets recap a little.

      You raised a valid point about the Chinese investing in their universities but not improving critical thinking standards. I felt that the reason critical thinking skills have not improved there is because of the underlying political system and provided some evidence.

      Your counter claim essentially seems to be that the political structure doesnt matter because the 'cultural factors' still triumph. This is a reasonable claim, but your evidence seems weak. You simply assert that heterodoxy does not imply better critical thinking but leads to mediocrity ! You follow that up by a poorly disguised ad-hominem attack accusing me of 'gloating' on the shortcomings of another country.

      Anyways, the Delhi universities are not perfect, but there is a lot of work on sociology that comes out of the Delhi universities that is interesting and influential. Many of the professor's there are prominent dissenters. China's dissenters tend to be located either in jails or outside the country. India's leaders may share the same imperatives (or even worse ones) than China's, but being a constitutional democracy does constrain them. This will perhaps become more apparent as more private liberal arts and humanities universities arrive, that do not depend on the state for financing.

    5. "Your counter claim essentially seems to be that the political structure doesnt matter... "

      Nope, I didn't say that. I said: "Not because of the same authoritarian reasons, but the situation is the same." I did point out the political aspect in China.

      I didn't make any counter claims.


      "You simply assert that heterodoxy does not imply better critical thinking but leads to mediocrity"

      I didn't say that it necessarily leads to that. I said the bias is towards mediocrity. That's less of an assertion as you make it out to be. Actually I'll concede that I didn't make this point very well. But, I think some might be able to deduce the underlying point I'm trying to make. Its hard for me to say it better.


      Yes, I did accuse you of "gloating on the shortcomings of another country." purely based on the comment. And, I stated the reason which was primarily that a discussion of the Indian situation might be more pertinent.

      But, I do not see how that is ad hominem, or why it is not a valid accusation?


      Yes, in future, when more universities arrive, I'll change my opinion. Thanks. As I said, I agree with the political aspect of China, but again, it is irrelevant to India.

  2. The knowledge required to write codes is relatively low. It requires an appreciation of the programming language's grammar and the flow of logic. To that extent Google's requirement is different. It would be interesting to see how many of Google's marketing folks and strategy planning folks are without a college degree.

    It is important to appreciate that a college degree is expected to enhance knowledge, competence and skill in a specialized area and design an education system accordingly than consider a college degree as unnecessary.

    In the Indian context, the college degree has become a ritual mostly due to the State regulating the industry (where an IIPM could obtain a court order erasing the warning issued by the regulator in its website); the State creating artificial scarcity (by restricting the number of licenses and issuing them to family and friends); the State specifying a syllabus which does not address the employability of the student.

    Arrival of "skill specific" vendors such as Khan Academy will force this eventually.

  3. Although I completely agree with your opinion, I am slightly apprehensive of an India which does not have branded Universities creating knowledge and imparting it to the students admitted stictly on the basis of merit. Because, the alternative would be that the few who have the knowledge would monopolise on it and wont let it out of their family. This was the case with legal practise in India before the National Law Schools. Well established practising advocates had a good collection of expensive English law books/journals which could be accessed only by his chamber juniors, who would usually be children of other well established advocates. In such circumstances, an ordinary law student from an ordinary university would not even have access to such books/knowledge (which are still not available online for free) and would invariably be less impressive before a judge, who again would probably look at English authorities with a certain amount of reverance. The emergence of National Law Schools and liberalisation (leading to a greater demand for transactional lawyering) has changed that but may not be irreversibly.

  4. The beginning of internet based learning/courses are going to be the nemesis of the structured learning that lakhs of engg. students have to go through their four years and two years at their masters. What can alleviate some of these problems is the rise of hands on project based on real life data or company. But what will motivate students to undertake such projects with no monetary benefit? Internet based learning will impart knowledge depending upon the course takers preference. Critical thinking, business writing such soft skills can only be attained through experience.
    In nutshell, its the how the institutes of higher learning try to change because even students some kind of guidance which is generally not available on the net.

  5. I am some 20+ fresh college graduate and would like to tell you my perspective.

    College education is must in India even though from really awful collge.

    The reason being the character formed in a free environment. In US,UK and other developed countries children are independent from start and thus have open thinking. Here in India, we live not only with our parents but under their supervision untill marriage. How can one explore the world and open up his thoughts if he has to follow strict routine as prescribed by his parents.

    1. Kudos! You get it! :) I always thought the 4 year degree was more about enjoying campus life for 4 years and making friends and exploring and discovering talents for life. The degree is just a side effect. Even if at the end of 4 years, one reaches the conclusion that they don't like their major, its a win, because at least now you know that, and early in your life! Of course, I'm not sure about the awful college part. The quality of the student network can have an exponential effect in one's later life. But, I mean quality not in the narrow terms of college exams, but more broadly speaking. And, to your point, a study showed that out of talented students who get into both an Ivy league university and to a state public school, those that choose to go to a state public school do as well as those who chose the Ivy League university. In other words, the students at the point of admission into the university already have the goods and the university doesn't make a major difference. I think its a liberating study that all Indian middle class parents should check out.

    2. Anonymous, I agree with your perspective here. College is a great place to become independent, emotionally and intellectually. However, I would like to ask if you think the idea of the degree being a side effect would be acceptable to other students, the people who pay for the college experience and the society at large.

    3. Ok, I would have to argue this at multiple levels and I don't understand which angle you are coming from. So, let me just say that I don't understand your question or I don't think you understood what I meant.

      I don't understand what is not acceptable to whom, how, what? It is what it is. What does society's acceptability have to do with anything? Society is stupid majority of the time anyway, trying to follow the latest hype or fad. I'd rather bother about what is acceptable to the small minority of elites. That seems to work much better, IMHO.


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