During the past 30 years, higher education has boomed worldwide. Virtually every country has significantly increased the fraction of its young men and women who go on for a college or university degree. The higher education boom is just as large in developing countries as it is in developed countries, although naturally poorer countries still lag behind in the fractions of young persons with college degrees. China is an extreme example of what has been happening in developing countries, as enrollments in Chinese universities increased several fold during past 15 years. The United States also increased its enrollments, but at a slower rate than many other rich countries. When measured by the fraction of young people with a college education, the US ranking has dropped from among the top three countries several decades ago to somewhere between 10th and 15th.
A worldwide trend suggests that universal forces lie behind it. In the case of the higher education boom, one major force is the introduction of computer and other technologies that give an advantage in labor markets to individuals who command information and knowledge. The rapid transfer of technologies from richer to poorer countries, partly the result of foreign direct investments, is also raising the demand for educated persons in many less developed nations.
If the value of higher education in the modern information-oriented economy has been overrated, the sizable growth in the number of educated persons should have lowered the earnings premiums for college graduates, and raised the unemployment rates of these graduates. In fact, these earnings premiums have generally risen, not fallen, and often the growth has been large. Moreover, unemployment rates of the college-educated have remained much below those of high school graduates and high school dropouts.