Source on education: https://libertystreeteconomics.newyorkfed.org/2014/09/the-value-of-a-college-degree.html …
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Next education (college). If you just look at costs (and do a "hours to buy 4 years of tuition" calc), college is indeed more expensive (about 4x) But that's only half the story! Wage premium has also increased. Put those two together, and college is half the "cost" of 1970spic.twitter.com/XwRdcpkYJM
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Now the big one: healthcare. And on this one I don't have one neat number to compare. But I do know that just looking at, say, the cost of health insurance, or a night in the hospital, is the wrong approach. Those things get you much more and better healthcare than in the 1970s!
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Think about prescription drugs. They are getting more expensive! But part of that is driven by *new* drugs. If we just look at the basket of drugs available *in 1970* and compare to prices of those same drugs today, I can guarantee they will be much, much cheaper
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What about medical procedures? My brother got a life-saving double lung transplant last year. It cost something like a half million dollars! Expensive! But what did it cost in 1970? Trick question! The cost was infinite. The first successful DL transplant wasn't until 1986
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And while we lag other countries on outcomes like infant mortality, we have still seen dramatic improvements since the 1970s The infant mortality rate in 1970 was 19.9. In 2017 it was 5.7 (source: https://fred.stlouisfed.org/series/SPDYNIMRTINUSA …)
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So again, I don't have one single metric we can look to for health care. I'm open to suggestions! But health care involves so many different costs and so many measured outcomes, that it is hard to see the big picture. But a graph with a line going up over time is useless
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Let me conclude by preempting any charges of Panglossianism: I think we can and should do better on all these! And I have ideas! But claims that two-income families are "trapped" by spending more on these three areas ignores the important point that THEY ARE BETTER END THREAD
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Wage premium increasing doesn't mean college is better/cheaper. It means competitive signalling epidemic has gotten worse. Don't think of the wage premium as raising some people's incomes - think of it as *lowering* others' incomes.
@bryan_caplan -
I'm a student of Caplan's and a big fan of his book (we used it for our student reading group this semester!). But *increasing* wage premium is not necessarily related to signaling model. See the literature on skill-biased technological change (Goldin and Katz book is very good)
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I agree with your other two examples, but this seems like an abuse of the word "cost". If you are giving up more hours to buy it, and those hours can buy more, cost has clearly increased even if the return has increased more.
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Thanks to widespread availability of student loans, you don't need to "give up" any hours to buy it
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Yes, but the wage premium is only for college /graduates/. If, like 40% of Americans, you begin but do not complete college, those rising costs are a big deal.
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The only caution I would offer is that tuition is only a small portion of overall costs. If you include total costs the trend is much higher and more expensive. From the college boards trends in college pricing for public 2 yr and 4yrpic.twitter.com/2onmssM4WY
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I don't think this is even close to a sound inference. Taking a mean here will be very misleading for a skewed data set and I would be shocked if it wasn't the case that some small top quantile was reaping the vast majority of wage growth, due to tech.
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You assume today’s higher earnings are available. Consider the impact of today’s budgets with disproportionate spends on health care, student loans and bank interest
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