[ExI] the formerly rich and their larvae...

[Rafal Smigrodzki]

On Feb 11, 2008 1:35 AM, Amara Graps <amara at amara.com> wrote:
> Rafal Smigrodzki rafal.smigrodzki at gmail.com :
> >  Otherwise, the young person could decide to
> >squander other people's money on the pursuit of trivial or useless
> >credentials, wouldn't you think?
>
> You're not including the PhD advisor's role (and reputation) to choose a
> good PhD student. And with a 3-year-limit to finish a PhD (after which
> time, all of the money is finished), the student doesn't have time to
> party and squander others' resources. I.e. the student doesn't need any
> more incentive to focus than that hard deadline.

### Back there in Germany I used to hear about and occasionally meet
those "ewige Studenten", people who just had too much fun in college
to ever quit. Heidelberg is so nice, you can sit in Hauptstrasse all
day, go to a concert, meet some new chicks - why ever stop, of
somebody pays your bills? And why not choose a major that means
guaranteed unemployment, like philosophy? Sure, they pay those
chemical engineering grads up the wazoo, but chemistry is such a bore,
so why not do something more enjoyable?

Salary is a signal of usefulness, and tuition is a signal of sunk
cost. If your tuition is waived (i.e. somebody else is paying), you
have no reason to pay heed to the cost, and you have less incentive to
think about future usefulness. As a result there is misallocation of
resources - your time and other people's money is spent on activities
that won't generate a return. Don't they have 10,000 unemployed
physicians in Germany, because med school is free there? Why does
Europe have so much post-college unemployment? Seems to me that "free"
Hochschulausbildung is in part to blame.

Rafal