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142 sats \ 3 replies \ @Undisciplined OP 30 Oct 2023 \ on: Meta Econ Takeover Day 13 meta
One bubble I've been talking about for years is Higher Ed. The costs have been radically outpacing inflation for decades and the returns have been stagnant (at best).
There's been a pretty long trend now (starting in 2016) of college enrollment declining. That had never happened before. Further, that trend is driven by men not going to college, which matters because that's who majors in the STEM fields that generate the "returns to college".
The amount of labor hours, human capital, real estate, etc. currently misallocated to college is insane.
The only thing I'd say here is that it isn't a bubble that will "pop". Yes it's been overpriced and over hyped, but it won't be too hard to bring costs down by getting rid of useless administrator and getting back to straight education which is still valuable, imo.
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That might be, but I think there is pop potential as people become more aware of how the "returns to college" are distributed. Essentially, only the best students in a handful of STEM fields have positive returns to college, but their returns are large enough to drive the average up pretty high.
It's true that colleges could scale down their expenditures to make expected returns positive for more students, but that would entail a lot of people losing their jobs. Major reallocations in the economy are what "busts" are made of.
Of course, I've been waiting for this bubble to pop for a long time and at best it's slowly deflating.
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This is the second one that came to mind after consumer credit.
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