The 100k is a net present value calculation, which includes a 5% per year discount, which is quite steep. 1/1.0515<0.5, 0.9530<0.25. The undiscounted difference in lifetime earnings looks, just eyeballing the figure, to be around 300-500k.

Yes, precisely. It seems like a good idea to keep an eyeball on the absolute, unadjusted numbers, even if controlling for IQ and other factor is a valid way to look at it, since the experience of being someone in the disadvantaged bracket is not a minuscule difference. Flattening the perceived income difference by controlling for IQ hides the absolute magnitude of income differences. Plus there’s always the chance that the model is wrong, and/or not accounting for everything.

They account for that plus a lot of other factors in the 100k number. Basically the conclusion is, for people born from 1920 to 1980, college was net value add accounting for everything else, but not a huge one.

Yes, I know they account for that. Why does that make sense to account for IQ? That is explicitly discounting for college!

The 100k number is a fictional number, it’s trying to answer the question of assuming the same person didn’t go to college, is it possible to calculate the true value of college.

We could argue whether they actually calculated that number correctly, but what is absolutely true -- my point -- is that the actual people who had actual degrees actually earned a lot more than 100k extra over their lives, on average. The differences in wealth, illustrated by the data in that paper (see figure 1), are 2x-3x in annual income and accumulated savings much higher than 100k.

Yeah, but those people could have earned that much without going to college. If you just take the correlation between college and income, all it tells you is that colleges skim the top percent of society, which we knew already. The question we're trying to answer is that if you have the choice to go to college or not, should you?

I believe I understand the question & goal, and maybe this is the right way to go about it, but I’m not sure. It somewhat strikes me as the wrong question -- people don’t choose college equally at all income & IQ levels, and some of the factors that (statistically) lead people into to choosing to go are already accumulating before they’re even born. As a result, the hypothetical solution that hides the factors that lead to that choice in the first place in the data might not be fairly or adequately answering the question of whether someone should invest in college, given the choice, right?

Under this model, you could have someone with a higher IQ and a degree earning more money than a non-degree holder, but have a ‘negative’ return. Does that accurately reflect the situation, should the advice be to skip college, even though the absolute financial returns might be positive?

And what does this answer tell someone who has a low IQ or a low socioeconomic status? How should they try to evaluate this choice? Does discounting high IQ and high family education give an accurate picture of the benefits of post-secondary education to poorer families?

Controlling for IQ here is difficult because the higher your IQ is, the more you would be attracted to learning for learning’s sake in the first place.

Exactly!