Why are school counselors so bad?

Recent news articles following up on the Occupy X movement have focused on youth unemployment and student debt. One aspect of this that strikes me are the absurdly bad choices students make. And from discussions with undergraduate students I ahad over the years, school counselors shares share part of the blame.

For one, they keep sending students into supposedly easy majors, even if job prospects are slim. If a student cannot handle the rigors of a serious university education, he should not be in university. He is less likely to get grants, more likely to take longer to graduate and then be in debt, less likely to get well-paying jobs there after and thus will face students debts for many years. Also, students with ambitions in better majors are told to switch to easier majors when they face difficulties, instead of helping them to overcome these difficulties. This is in particular the case for ethnic minorities and women, and one then wonders why they are underrepresented in science and technology. The problem is that counselors perpetuate or even amplify prejudices. An example is Neil deGrasse Tyson who was told that as a black he should go to basketball, not physics, and was not offered the help white students were getting when he struggled with classes, when blacks are not expected to excel in physics.

Also, counselors seem to obsessed with finding the "right college," which often an obscure little university where every major has only two or three faculty, and turn out to be expensive. The usual explanation is that the students needs small classes. This seems like another case of someone who is going to be highly in debt for a long time. And to come to Economics, the major is filled with undergraduates who did not get in or got kicked out of the business school, most often for failing on business mathematics and statistics. And what do counselors tell them? Get into a similar major, like Economics (or Psychology), ignoring that those quantitative skills are even more needed.

Why do counselors give such bad advice? I do not have an answer beyond wild guesses. But my casual observation tells me that the best psychologists or education professionals do not espouse this career, and for a good reason: on average the entry salary for a graduate of a Masters program in school counseling is an astounding US$33,000. In some sense, this is the bottom of the barrel that is trying to give advice to people on how to avoid falling to the bottom of the barrel. That is hardly inspiring. Schools should hire at least a few people who had successful careers to show how it is done, for example retirees.

Why top MBA programs do not disclose grades

I have always been puzzled by the policy of many top MBA programs not to disclose the grades of their students. Even more puzzling is that they by and large manage to enforce this policy even from their top students, who should obviously want to signal that they are at the top of their class.

Daniel Gottlieb and Kent Smetters wondered about this as well. Such policies are voted by the students (who in the US own the grades) on the argument that it allows them to take more difficult classes without adverse consequences. Yet the evidence is that they learn less when such a policy is in place, which explains the general opposition to it from faculty. So, one can conclude that students are lazy (nothing new here), but is such a policy limited to top MBA programs? Why not in lesser programs, or other professional schools?

Gottlieb and Smetters point out that students have two signals for potential employers: their grades and the selectivity of the program. They are also risk averse, and at the start of their studies do not know how well they will do. In top schools, the selectivity signal is very strong and the students rely on it, while the "average" grade is superior in expected terms. In lesser schools, the selectivity signal is much weaker, and hence students try to distinguish themselves on the labor market in other ways, for example with grades.

To some extend, the same is happening on the Economics PhD market. When you look at the recommendation letters form the top schools, all candidates are the best in a generation in their field (I am exaggerating on a little). Thus the letter looses a lot of its value, and all that remains is the entrance selectivity of the PhD program. Lower ranked programs are much keener to differentiate their students and push the particularly good ones.

Individual characteristics are more important for academic success in university

What makes a good college students? Looking at the admission criteria of universities can be insightful. Public universities in the United States basically just look for high school grades and standardized test results, with some adjustment background characteristics (race, high school characteristics), if any. European universities in the end just care about grades, in most cases that a student was above some level. And US private universities look at a large array of characteristics, with extracurricular activities and personal essays being of particular importance, grades in some cases being even ignored. While these different types of universities have obviously different motivations, ultimately they are looking for potential in students. So what determines academic success?

Martin Dooley, Abigail Payne and Leslie Robb use administrative data about a dozen entering cohorts in four Ontario universities to explain what makes students stay longer in tertiary education and have better college grades. It turns out that the high school grades are pretty much sufficient. At least for Canada, it is reassuring to see that individual performance matters more than where you are coming from. Of course, one could wonder whether all the other characteristics that private US schools consider would matter here. But this kind of data was presumably not available, as Ontario universities, all public, do not ask for such information during the application process. Also, there is no record in the study about individual standardized test results. Including those would only reinforce the results, but may have important policy implications: imagine they do not matter. Then it opens the door to grade inflation in high schools, and the grade signal gets diluted. And then admissions officers need to find something else to rely on, such as some of the characteristics that matter less.

Teenage achievement and the house price bubble

The general economic context of where and when you grow up matters. Think, for example, of those raised during the Great Depression in the US or World War II in Europe who are likely to be very careful with their spending, never through anything away and finish their plates. In this regard, what should we expect from those reaching adulthood in the past years?



Daniel Cooper and María José Luengo-Prado study the impact on teenagers of the house price boom before the current crisis in the United States on educational outcomes. Using the Panel Study of Income Dynamics (PSID), they find that a 1% higher house price at age 17 leads to a 0.8% higher income as adult if the parents owned the home, 1.2% lower if they were tenants, after conditioning for socio-economic characteristics. These are big numbers. They can be justified by the observation that higher house prices allows more collateral to borrow for education. Indeed households with a below median non-housing wealth saw even a 1.6% boost in their child's future income. To explain the impact on tenants, I suppose one can explain it with higher tuition in reaction to larger loans, which tenants cannot afford as well.



The consequences from the recent house price crash are daunting in this context. And given that state are disengaging themselves from financing their public colleges, leading to even higher tuition, the outlook is even worse.