The wrong signals
The higher education system is a colossal waste of time and money, far more about signalling to future employers than gaining skills and knowledge. So says provocative (and highly educated) economist Bryan Caplan, author of The Case Against Education. Without going quite so far, I think he’s on to something.
“Typical students burn thousands of hours studying material that neither raises their productivity nor enriches their lives,” he argues, citing evidence that we forget most of what we learn. But if this is true, why do students continue to slog through classes year after year, and why does their earning potential rise despite not necessarily developing the skills and knowledge to be better workers?
Signalling is the answer, according to Caplan. He explains there are two ways to raise the value of a raw diamond: “One is to hand it to an expert gem smith so he can beautifully cut the stone . . . the other is to hand it to a reputable appraiser . . . so he can certify the preexisting excellence of the stone.” The former is about adding actual value, the latter about signalling the vast potential value that lies inside.
While we like to think education is all about gaining knowledge and skills, and maybe a little about “the piece of paper,” Caplan reckons it’s more like 80 per cent signalling. “Even if what a student learned in school is utterly useless,” he continues, “employers will happily pay extra if their scholastic achievement provides information about their productivity.”
Higher education as certification works because employment and education call for a similar “package” of strengths. Caplan says education signals three things: intelligence, work ethic and conformity.
All three are important; just taking an IQ test, for example, doesn’t show an employer that the individual will work hard.
As we increase access to higher education, we reinforce what Caplan calls a “credentialist arms race.” A degree doesn’t mean as much as it used to for employers, forcing young people to study for longer and longer to get ahead of the pack. Just think what else students could be spending their time on.
Caplan’s challenge to some of our fundamental assumptions should open our eyes to the existence and significant costs of this kind of signalling. If we think we are building human capital but are instead just doing employers’ hiring homework for them, then education as it stands is a waste of time and money. I’m with him here; there must be a better way.
He thinks that there’s too much education — the solution is to reduce access, not increase it, to promote apprenticeships and get rid of “irrelevant” subjects like history and arts while we’re at it. I don’t buy it, or not entirely. Education is about more than just a means to a well-paid job. Done well it is also about learning what it means to be human, building character and developing relationships. Scarcity might raise the value of diamonds, but there is no shortage of potential in our children. Shaping will develop this, signalling won’t.
"If we think we are building human capital but are instead just doing employers’ hiring homework for them, then education as it stands is a waste of time and money."