soreff (02/14/83)
The following is a selection of excerpts from "A Drive to Make Graduate Degree part of Divorce Settlement" by William Johnson, from the Peninsula Times Tribune 2/12/83. These excerpts are followed by my personal opinion and some quotes on the economic effects of education. "A bill making the future earning capacity of a husband and wife community property, based on the value of education acquired during the marriage was introduced Tuesday by Assemblyman Alister McAlister, D-Fremont. The bill would allow one divorcing spouse to claim compensation from the other if the latter had acquired 'enhanced earning capacity' with graduate degrees during the marriage. McAlister is concerned about what more often happens to women who divorce after putting their husbands through medical or law school. The assemblyman wants the so-called enhanced earning capacity to be considered as a tangible marital asset with a determinable value, like a house that is bought during a marriage. McAllister thinks that spouses, typically women, are entitled to the future payoffs of their spouses' education." "...But lawyers specializing in family law are divided about whether giving monetary value to the future benefits of education acquired during a marriage would make divorce settlements more equitable. Some family lawyers say it would result in an administrative nightmare. Carol Bruch, professor of law at the Universities of California at Davis and at Berkeley, has served as a consultant to McAlister during the development of his bill, AB 525." "...'When a couple decides to invest in human capital, education, instead of putting money into stocks, they are investing in a potential future that will bring back an enhanced income. The problem comes when you have an investment in a marriage that does not last,' Bruch said." "...Former chairman of the State Bar Association section on family law, Spencer Brandeis, said Thursday that giving community property status to potential earning capacity is a 'hot potato.'" "...The issues[sic] raises many ponderous questions, Brandeis said. 'What happens to the educated spouse who gets his MD degree at a state school rather than an expensive private school? Is his enhanced earning capacity different? What happens to a doctor who gets his degree but is unable to use it or chooses not to? What is his wife entitled to?'" There are some serious questions as to whether education should be considered to be form of capital investment, directly supplying work skills, or whether it should be considered a form of certification of suitability for training, making the educated spouse appear more suitable to a potential employer. In Public Interest (Spring 1972), Lester C. Thurow wrote an article entitled "Education and Economic Equality" from which the following quotes are drawn: "... a large body of evidence indicates that the American labor market is characterized less by wage competition than by JOB COMPETITION. That is to say, instead of people looking for jobs, there are jobs looking for people-for 'suitable' people. In a labor market based on job competition, the function of education is not to confer skill and therefore increased productivity and higher wages on the worker; it is rather to certify his 'trainability' and to confer upon him a certain status by virtue of his cetification. Jobs and higher incomes are then distributed on the basis of this certified status." "...Government education and training policies have not had the predicted impact because they have ignored the 'job competition' elements in the labor market. In a labor market based on job competition, an individual's income is determined by (a) his relative position in the labor queue and (b) the distribution of job opportunities in the economy. Wages are based on the characteristics of the job, and workers are distributed across job opportunities on the basis of their relative position in the labor queue. The most preferred workers get the best (highest-income) jobs. According to this model, labor skills do not exist in the labor market; on the contrary, most actual job skills are acquired informally AFTER a worker finds an entry job and a position on the associated promotional ladder. As a matter of fact, such a training process is clearly observable in the American economy. A survey of how American workers acquired their actual job skills found that only 40 per cent were using skills they had acquired in formal training programs or in specialized education-and, of these, most reported that some of the skills that they were currently using had been acquired through informal on-the-job training. The remaining 60 per cent acquired all of their job skills through such informal on-the-job training. More than two thirds of the college graduates reported that they had acquired job skills through such informal processes. When asked to list the form of training that had been most helpful, only 12 per cent listed formal training and specialized education." This implies that, if anything should be considered indicative of investment in human capital, it should be the increase in income of a spouse occurring while the spouse is working, NOT the increase resulting from education. One can regard a degree as a safe conduct past the barriers to entry into a field. This may be due to personnel policies in industry or due to legislative fiat (licensing and other restrictions). Thus it appears that education (although costly) should not be considered an investment and should not be treated as community property. Does anyone out there have comments on this? -Jeffrey Soreff (hplabsb!soreff)
dkw (02/15/83)
Whether a degree is an investment in human capital, or simply a method of certification is irrelevant to the argument over its value in a divorce case. While to an employer the degree may simply be certification, to the employee it is a capital investment in the sense that it increases his salary. The fact that it has nothing to do with productivity (if true) is irrelevant to the employee. Therefore, whatever its real advantage to society, one should consider education to be a capital expenditure as far as divorce settlements.
thomas (02/16/83)
For what it's worth dept: The IRS considers the money you pay for your (college) education to be an investment in future income, so you can't deduct it as an expense. =Spencer
jfw (02/17/83)
My own thoughts on making degrees part of divorce settlements: Placing a cash value on such an intangible seems to be logically foolish (which, of course, has *nothing* to do with law). My own degree in CS (and those of many others on the net) seems to hold the promise of greatly lucrative payoffs from now until my fingers fall off -- but what if someone develops the Ideal Programmer's Apprentice that takes a rough English sketch of what a program should do, translates it into optimal assembly code and even writes the MAN(1) page for you? A lot of ``highly paid'' programmers are going to be out cleaning disk packs... Or suppose that I decide one day that I would rather be an avant-garde painter [or for a concrete example--a music teacher here at MIT who gave up a CS job for a music teaching job at U of somewhere for .50 as much money]. Don't ask me what the right solution is, I have long felt that most people are terminally broken to start with...were they not, there would be far fewer divorce cases, and no cases where each party is out to do metaphysical violence in one form or another to the other.