The rest of India has followed Apu's example, putting its bets on a Western-style college education, and flocking to colleges particularly after Independence. Since the 1990s, the rush to college has become a stampede and optimistic governments and entrepreneurs have hastened to meet this demand. In the past decade alone, India added 20,000 new colleges even if the quality of education was not much above being able to recite a few phrases in commerce and computer science.
But, of late, dark clouds have risen over this idyllic horizon. Studies from multiple countries report that salaries for college graduates are starting to stagnate. A New York Times report says that in the United States between 2000 and 2008 the typical earnings of men with at least a Bachelor's degree fell by more than $2,000 after inflation to $70,332 a year. Between 2008 and last year, they fell a further $3,500.
Hard statistics about the situation in India are tough to get, but anecdotal reports have started appearing about some of India's 4,000 business schools closing their doors during the past year.
While some observers attribute this wage stagnation and even the closure of colleges to the ongoing recession, others, like Clay Shirky, conjecture that the "golden age" of college education may be behind us. He says that this golden age lasted from 1960 to 1975 and was a period of ever-expanding college enrolment, dramatic increases in faculty count and equally dramatic decreases in teaching loads; and that it was driven by spectacular increases in state government funding for universities and handsome research grants from the US government. But, since the 1970s, American states have been every year reducing the proportion of tax dollars going to higher education. "Rising costs and falling subsidies have driven average tuition up over 1,000 per cent since the 1970s," he says.
Claudia Goldin and Lawrence Katz of Harvard University, in their book, The Race Between Education and Technology, say that prospective students in colleges are constantly and intuitively calculating how much more a college degree would add to their earnings compared to a mere high-school degree - this is the college premium. This kind of calculation is not very different from what little Apu did in 1920s India: he figured out that earning a degree in a Calcutta college for a few years would yield him a better financial return than the pursuit of a Sanskrit-reciting priestly life in his village.
Professors Goldin and Katz say that the college premium is set by the supply-demand situation for college graduates: a 10 per cent increase in the relative supply of college graduates reduces the college wage premium by 6.1 per cent. Thus, in a period when the supply of college graduates rapidly increases, we are likely to see a depression in the college premium. On the other hand, a slowdown in the supply of college graduates will lead to an increase in the college premium, as America saw in the 1980 to 2005 period. The alarming decline in the college premium since the 1990s, they say, is because computerisation prior to the 1990s largely substituted for non-college clerical and production tasks - but more recent advances in information technology have increasingly led to organisational changes that eliminate many lower- and middle-paid college jobs. They call this the race between technological change and education; education ran faster during the first half of the century but technology has "sprinted ahead of a limping education in the last 30 years".
The commercial value of the things students learn in college changes with time. The ability to recite Sanskrit slokas probably guaranteed a steady livelihood as a priest in India for over a thousand years but, as little Apu in Satyajit Ray's Aparajita intuitively realises, times can change and with that can change the market value of each type of knowledge. Perhaps the problem is not with college itself but the cost and value of what they teach. Otherwise, students, just like little Apu, will make a smart choice and either bypass college or choose those colleges and courses that make sense for their future.
Ajit Balakrishnan is the author of The Wave Rider, A Chronicle of the Information Age
ajitb@rediff.co.in