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Should My Kid Go to University?

31 May 2016

Your child is in the final year of polytechnic. Or perhaps the GCE A-Level is looming. What’s next? Should university be the immediate step? Peter Cappelli, author of Will College Pay Off?, shares why a college degree no longer means what it used to – and why that can be good news for your kid. 

There are two reasons why parents insist that their children pursue a college education, says Peter Cappelli, a professor of management at the Wharton School.

First is the view that your kids won’t be able to get a good job unless they go to university. And second, is the sense that if your kids are going to a more elite school, it looks like you’re a little more of a success as a family. Both sets of beliefs don’t make sense anymore in today’s context, he says, and it’s because degrees no longer drive career success.

The main reason for this is that a college degree has become much more common. Back when a university education was a rarity, employers were “really interested in hiring graduates and growing them for long term careers”. But now, with so many more people going to university – about 40 per cent in the United States – a degree just isn’t special anymore. And employers are not as interested in investing in your training long-term. After all, says Cappelli, they can simply hire someone who already has the skills and knowledge they need.

This problem isn’t unique to the United States (US). In China, where many people believe it’s important to go to university, parents are more than willing to pay for private and overseas education when their children don’t gain entry into the government-supported institutions. That has resulted in a huge influx of graduates into China’s labour market – but demand has not caught up.

The officially-released rate of graduate employment is 50 per cent, says Cappelli, noting that the unofficial figure may be as high as 60 per cent. In comparison, only 4 per cent of high school graduates in China are without jobs.

Numbers don’t give the full picture

Similar statistics in the US show college graduates doing better, compared to high school graduates. This seems to suggest that a degree does give one an edge – but Cappelli urges American parents to look closely at the situation.

What’s really happening, he says, is that the US college graduates are “doing the jobs that high-school graduates used to do, bumping high school grads out from their jobs”.

For instance, when employers choose between a non-graduate and a graduate for a barista or secretary job – they select the graduate. And it’s not because the job requires degree-level skills, but perhaps because the graduates are older or have more work experience. Many graduates end up with fairly low wages when they start. On top of that, they need to pay off the loans they took to earn their degrees.

In short, “there’s nothing magical about a college degree that means you will make more money,” says Cappelli. The fact that graduates in the US have better employment numbers than those in China doesn’t mean that there are more jobs for college-educated people; it just reflects how US graduates are more willing to take high-school level jobs.

What does this mean for my kid?

Parents may wonder if it still makes sense to guide their child towards university.

Cappelli points out that in today’s world, where there are plenty of choices for students, parents need to think about what will be a good fit for their child to help him succeed in the long term.

“Ask yourself serious questions about whether you think your child is ready to go to university. We know that kids who aren’t interested in going don’t do very well – that’s not surprising,” he says.  

It’s also important to consider your child’s strengths. For instance, if they’re good at building or making things, they may be better off developing those skills through apprenticeships and work experiences, rather than through a university education, which can be heavy on building cognitive skills.

Some parents may worry that if their child doesn’t go to college, it will reflect badly on them. We can force our kids to do things that they don’t want to do, he says, but they may end up being unhappy and trying to switch careers down the road.

Your child may also benefit with some work experience. “Increasingly around the world, universities do like it when kids have done something else before going to college,” Cappelli says. “It means they’re more mature, and able to handle the commitments required. They bring knowledge to the classroom, which is useful.”

It’s not just the universities that value such experiences. Employers are more interested in internships and work experience than what the applicant had studied at university, unless it’s a very specific occupation like nursing or engineering.

What are bosses looking for?

To better understand how companies are hiring, Cappelli says it’s important to understand how corporations have changed over the years. “A generation ago, when most parents went to school, corporations made most decisions internally – they could decide, for instance, ‘in five years, we’re going to move into this business’, and trained their people so they could be ready for that opportunity.” 

But things are different these days. New opportunities are popping up in the market and companies rush to prepare for them. They don’t have the time to grow the skills they need. Rather, they assemble teams which already have them.

Parents need to realise that since the days they entered the workforce, “the world has changed…no one is taking care of your kids immediately after they graduate”

So, it’s important for students to think about how they can get the skills they need – some of which may not be picked up at university. Rather than thinking of a degree as the only preparation needed to get a good job, parents can consider steering their children towards attaining certificate programmes, taking up online courses and gaining some work experience for that initial portfolio.

A focus on skills

Cappelli uses the IT industry to show why it’s important to constantly be thinking about what skills you need, beyond what is taught at school.

“One of the great challenges in the IT industry is that technology changes quickly and the new technology doesn’t always build on the old,” he says. This means that if you’re a student trying to figure out what will get you a job, “it could very well be that what you’re preparing for now won’t be relevant by the time you graduate… it’s quite unpredictable which specific skills are going to be useful”.

In an environment like this, how should a student plan ahead? Cappelli says that it’s useful to keep in mind the general skills that will always be valued by the job market.

Employers all say they want the same thing in the long term – reasoning skills, communication skills, and the ability to solve problems and get along with other people. In general, parents (and their children) should focus less on that first job after graduation, and think more about where your child will be 10 years from now. “These skills alone may not get your kid a first job – but they might get your kid to the top later in life.”

He also suggests that decisions about industry-specific skills can be delayed until later, when students are closer to graduating from their course and have a better feel of what’s “hot” in their industry.

For parents worried that all this means their child will need to shine in even more areas to get ahead, Cappelli suggests seeing this as many opportunities opening up instead. “In some ways this is good news – there’s lots of things that you could excel at, and you don’t necessarily have to ring the bell and win the prize in one thing.” But he notes that it also means they “can’t just focus on one thing and expect that everything else will be taken care of.”

“Every parent wants their kid to be successful – but what does ‘successful’ mean?” Cappelli says this is something parents will need to define for themselves, keeping in mind that success is no longer directly tied to doing well at university. “We shouldn’t think that the only way forward is to get the best grades; it turns out that they don’t predict much about who succeeds in the job market.”

What’s most important, he says, is a “mindset shift” about what a university degree can help you achieve. “The idea that ‘the day I graduate from college, I’m prepared for the workplace for the rest of my life’… that is just no longer true. Make sure your kids understand that getting skills matters.” 


About Peter Cappelli

Peter Cappelli is the George W Taylor Professor of Management at The Wharton School and director of Wharton’s Center for Human Resources. He’s also a research associate at the National Bureau of Economic Research and has long been involved in federal government policy-making regarding the workforce and education. Since 2007, he has been a distinguished scholar of the Ministry of Manpower for Singapore. He delivered the first SkillsFuture lecture – on “Building Skills for the Future” – at SMU in March 2015.