Irving Wladawsky-Berger

Is College Still a Good Investment?

In 2014, NY Times journalist David Leonhardt published a column with the provocative title: “Is College Worth It?” Despite the mounting debts incurred by many students to obtain a post-secondary education, “The decision not to attend college for fear that it’s a bad deal is among the most economically irrational decisions anybody could make in 2014. The much-discussed cost of college doesn’t change this fact.” According to a recent paper, said Leonhardt, “Over the long run, college is cheaper than free. Not going to college will cost you about half a million dollars.”

But, over the past few years, an increasing number of articles have questioned whether college is still a good investment. “Was your degree really worth it?,” is one such article, published earlier this year in The Economist. “That question once seemed a no-brainer,” said the article. “For decades young adults in rich countries have flocked to higher education. Governments have touted college as a boon for social mobility and economic growth. Yet as fees rise and graduate earnings stagnate, disillusionment is growing.”

The Economist cited a recent poll published in the Wall Street Journal (WSJ) that found that a majority of Americans, 56%, think that a four-year degree is no longer worth the time and money, a marked reversal from the 53% of Americans who were bullish on college just a decade ago.

“Skepticism is strongest among people ages 18-34, and people with college degrees are among those whose opinions have soured the most, portending a profound shift for higher education in the years ahead,” wrote the WSJ. “Enrollment in U.S. colleges declined by about 15% over the last decade while the growth in alternative credentials, including apprenticeships, increased sharply. In 2017, doubt over the value of a college degree was greatest among men, Republicans and people living in rural areas. That disaffection preceded a widening gender gap in higher education as hundreds of thousands of men left college during the pandemic.”

How Can AI Accelerate the Pace of Scientific Discovery?

A recent issue of The Economist included a special focus on “How AI Can Revolutionize Science,” with three articles on the topic. “Debate about artificial intelligence (AI) tends to focus on its potential dangers: algorithmic bias and discrimination, the mass destruction of jobs and even, some say, the extinction of humanity,” noted the issue’s lead article. “As some observers fret about these dystopian scenarios, however, others are focusing on the potential rewards. AI could, they claim, help humanity solve some of its biggest and thorniest problems. And, they say, AI will do this in a very specific way: by radically accelerating the pace of scientific discovery, especially in areas such as medicine, climate science and green technology.”

“Could they be right?,” asked the The Economist, reminding us that in the 1990s we had high hopes that the internet would reduce inequality and eradicate nationalism by transforming the world into a connected global village. Instead, internet-based social media platforms have been blamed for fueling political and ethnic polarization around the world.

“But the mechanism by which AI will supposedly solve the world’s problems has a stronger historical basis, because there have been several periods in history when new approaches and new tools did indeed help bring about bursts of world-changing scientific discovery and innovation.”

Winners and Losers in the Emerging Age of AI

“The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone,” wrote Microsoft co-founder Bill Gates in “The Age of AI has begun,” a March, 2023 blog. “It will change the way people work, learn, travel, get health care, and communicate with each other. Entire industries will reorient around it. Businesses will distinguish themselves by how well they use it.”

Over the past two centuries, major transformative technologies like AI have led to both winners and losers. Kodak, Blockbuster, Digital, Wang, and BlackBerry are among the corporate giants who were once leaders in their fields, but were unable to survive the disruptive technologies of the past few decades. Amazon, Alphabet/Google, Microsoft, Facebook/Meta, and Apple have been among the big winners in the internet-based digital economy.

A recent issue of The Economist explored this question. We may all assume that given the continuing pace of technology and business change, no company is safe from disruption. But, in “America’s corporate giants are getting harder to topple,” The Economist questioned these assumptions. “America Inc has experienced surprisingly little competitive disruption during the internet age. Incumbents appear to have become more secure, not less.”

Working With AI’s Human-Like Alien Intelligence

“When OpenAI unleashed its humanlike ChatGPT software on the world last year, one thing was clear: These AI systems are coming for our jobs. But don’t write off the humans just yet.” said “The New Jobs for Humans in the AI Era,” a WSJ article published on October 5. As has been the case with major technologies over the past two centuries, — e.g., steam power, electricity, the internet,  — AI will both threaten and lead to the creation of new jobs. While still in the early stages, “AI is already creating new opportunities,” said the article, mentioning a few of those new opportunities.

I found two of those new jobs particularly intriguing: prompt engineer and AI psychotherapist. Generative AI and large language models (LLM) are a new kind of human-like alien intelligence that even the people building them don’t really understand how they work. Researchers are attempting to unlock the AI black box in hopes of understanding how to best work with these powerful, alien technologies.

Let me discuss each of these two jobs.

Could Generative AI End Up Reducing the Growing Inequality in Labor Markets?

Over the past three decades, high skill jobs requiring expert problem solving and complex communication skills significantly expanded, with the earnings of the college educated workers needed to fill such jobs rising steadily. Conversely, opportunities and wages declined for less educated middle skill blue-collar manufacturing jobs and white-collar administrative jobs whose careers have been upended by automation.

“But the new kind of automation — artificial intelligence systems called large language models, like ChatGPT and Google’s Bard — is changing that,” noted a recent NY Times article, “In Reversal Because of A.I., Office Jobs Are Now More at Risk.” “These tools can rapidly process and synthesize information and generate new content. The jobs most exposed to automation now are office jobs, those that require more cognitive skills, creativity and high levels of education. The workers affected are likelier to be highly paid, and slightly likelier to be women, a variety of research has found.”

The NYT article referenced two that analyzed the occupations most exposed to AI, one from the Pew Research Center, the other from Goldman Sachs Research.