Good article in The New Yorker on this subject: http://www.newyorker.com/magazine/2015/09/07/college-calculus?intcid=mod-most-popular
Kenneth Arrow, one of the giants of twentieth-century economics, came up with this account, and if you take it seriously you can’t assume that it’s always a good thing to persuade more people to go to college. If almost everybody has a college degree, getting one doesn’t differentiate you from the pack. To get the job you want, you might have to go to a fancy (and expensive) college, or get a higher degree. Education turns into an arms race, which primarily benefits the arms manufacturers—in this case, colleges and universities.
It is well established that students who go to élite colleges tend to earn more than graduates of less selective institutions. But is this because Harvard and Princeton do a better job of teaching valuable skills than other places, or because employers believe that they get more talented students to begin with? An exercise carried out by Lauren Rivera, of the Kellogg School of Management, at Northwestern, strongly suggests that it’s the latter. Rivera interviewed more than a hundred recruiters from investment banks, law firms, and management consulting firms, and she found that they recruited almost exclusively from the very top-ranked schools, and simply ignored most other applicants. The recruiters didn’t pay much attention to things like grades and majors. “It was not the content of education that elite employers valued but rather its prestige,” Rivera concluded.
