8 ms·

On signaling != waste: Of course signaling is not wasteful. Caplan, like any good economist, would readily agree (prices as signals is a cornerstone in microec

On signaling != waste: Of course signaling is not wasteful. Caplan, like any good economist, would readily agree (prices as signals is a cornerstone in microeconomic theory). Employers need a mechanism to identify who is worth hiring, which for entry level jobs is typically the college degree. The problem is that a college degree is an extraordinarily expensive signaling device to obtain, and in a population saturated with college degrees they become less meaningful, and those without degrees have no chance at competing even if they would be better suited for a particular job. To me, The Case Against Education is a prompt to identify or create more efficient signals. In regular conversation it seems like most people agree that college is too expensive and really you're just in it for the "piece of paper" at the end, yet when you formalize the arguments folks get defensive and will pontificate on the intangible value of a liberal arts education.

zdragnar 3y ago
Colleges and universities in the US also advertise job placement rates for their various programs. Any argument for the intangible benefits of a liberal arts education must, at minimum, recognize that these are all secondary benefits. Any degree without a clear path to a well paying career is, based on the cost of tuition, a luxury good. This is true regardless of whether the tuition is paid by loans or taxes.
- sh34r 3y ago
  There is no good reason why tuition is as expensive as it is. Georgia Tech offers a $7k online MS in CS. Community college classes cost hundreds of dollars. You could study in Germany as an unsubsidized international student for a fraction of the cost of a U.S. four year university. The problem is that America is infested with rent seeking parasites who have turned every social good into a scam. Our healthcare system is the most expensive in the world, and yet we have a lower life expectancy than Cuba. We have the most expensive education system in the world, with little to show for it. Why are we devaluing education itself, just because far too many colleges are being run by despicable businessmen? Why are we accepting their rigged game as fixed? Boomers went to college for next to nothing. Gen X didn’t have to pay that much either. The neoliberal corruption of higher education, from a social good into a scam, is a very recent phenomenon. The root of the rot is all the pointless add-on services. Colleges don’t need to run dorms, meal plans, health centers, or any of that. The only thing that should be offered is academics. 18 year olds can go to war. They can manage to live independently, and the ones who can’t will receive Darwin Awards.
  - etempleton 3y ago
    Cheap college exists but students and families repeatedly choose more expensive schools with more services. Low cost colleges go out of business because they are seeing declining enrollment numbers. There are low cost options for those who are looking. In terms of America having little to show for the Education system, a disproportionate number of the top colleges and universities are in the US.
jkhdigital 3y ago
Standardized testing is the benchmark for efficient signaling. Of course, it is in a college’s financial interest to insist that their “branded” signal is much more valuable, since a test doesn’t care how you studied for it. A personal anecdote on this point: I enlisted in the US Navy after failing out of UIUC because I preferred to smoke weed and play video games instead of going to class. While on active duty I resumed my studies with online classes at military-friendly Strayer University, which accepted CLEP exams as credit for many lower level courses. I ended up taking like 8 different exams to take care of all my general requirements like sociology and Western civilization, each of which cost $0 thanks to military reimbursement.
- gumby 3y ago
  > Standardized testing is the benchmark for efficient signaling. I suppose it is indeed the benchmark, but standardized testing has mixed results. Aircraft pilot testing is, I believe, somewhat standardized and does demonstrate that at least when you it you met some baseline level of safety. The bar exam shows you have some baseline level of competency (as a non-lawyer who never read any law I am sure I would not pass) but I doubt it’s especially predictive as to how good a lawyer you will be. I took the SAT and got into a bunch of schools, but I was struck by how it didn’t seem to reflect much of anything we learned in school, except some of the math (we were not given any sat prep nor encouraged to get any). Note: I know MIT says SAT is somewhat predictive as to whether you will graduate, so…? I wonder about these full-cohort tests that control school admissions, such as in China, Korea, Japan, or France. Are the “winners” actually better in some useful way or is it simply a sorting hat that bins students into institutions with good/mediocre/bad networks?
  - hibikir 3y ago
    I can tell you about the test in Spain: Ultimately it's actually testing what you learned in school, vs the SAT's IQ + Vocab proxy. Since it asks for so much, in practice it's testing for the quality of your school too, as if your classmates in high school were bad enough, or your teacher cared little about covering the material, you might not have even covered some of the questions. So in practice, some schools averaged extremely good results in some subjects even for the worst students, while in others the very best always scored badly: Imagine in the foreign language test, one school might have a teacher that could actually communicate well in English, while others didn't. Another fun part is that it limits how much a motivated high school can do regarding unfair grading: In my year, the average grades in high school and the grades in the University test, while relatively correlated, had some very big outliers. Do note that in Spain, more than a matter of which university you'll go to, it's also a matter of which major you'll be allowed to study. In general, high paying, low unemployment majors are basically unachievable by someone that tested badly, or had bad high school grades. So it's not a matter if you are going to the right university, but whether you can study anything you care about at all. I had friends that liked computer science, but were C students, so they had no prayer of studying CS. And also note that, even after you get into college, chances of flunking out are very high. About 15% of students are expelled every year from that CS program, to which you have to add the ones that drop out voluntarily. So more than sorting people into colleges, there's a whole lot of sorting into just getting a useful degree in a timely fashion.
philipkglass 3y ago
Is the labor market tight enough for the signaling requirements to relax naturally? If employers struggle to hire enough entry level people who can read memos and learn basic office software, they probably won't require a generic 4 year degree. But as long as there's enough labor that employers can still be picky, I don't see why/how employers will drop that easy (if blunt) 4 year degree filtering mechanism. The signaling value of a traditional degree will go up if fewer people acquire it, so the optimal outcome for parents anxious about their own children's future prospects is that other people's children should consider vocational education or go straight from high school into the work force. I say this aware that many high school grads without academic inclinations are nudged toward universities by default, to their irritation and to the detriment of their more seriously academic classmates. I don't see how to fix it until/unless the labor market gets tight enough to squeak. Until then, every small move to fix the problem will raise the reward for "defecting" back toward earning a degree as a signal.
- eru 3y ago
  You can just make college more expensive, that should punish 'defecting' all by itself. My favourite policy suggestion for that: make it so that student loans can be discharged in a bankruptcy like any other loan. (Or more precisely, new student loans taken on after the new policy takes effect. No retro-active loan forgiveness.) It's my favourite policy suggestion, because it's a common populist complaint that student loans stay with you forever. So my suggestion looks like it's giving in to that populist sentiment. What is actually does: most students have no assets just after graduation, so bankruptcy is 'free' for them. Thus lenders can't count on getting the loans repaid, and thus won't loan as freely. Cutting off the spigot of student loan money will bring down the price of education.
  - Tyrek 3y ago
    but the source lender is the US government, which is awful at adjusting to market economics, and would likely require legislation to slow(?) down lending. How would you convince these populists to support this (not very sneaky) legislation?
  - 3y ago
eru 3y ago
Especially Caplan argues that the signalling works just as well for employers, if we give less (or no) subsidies to education. If anything, you can argue that the signalling works even if we severely tax education. And as the signalling arms race is a negative externality on society, we _should_ tax education. (Or rather, we should tax capital-E Education that is useful for signalling, like university degrees. Libraries and Wikipedia don't need to be taxed.)
- chowells 3y ago
  Did you get a refund for your defective university education? Mine was incredibly educational, in the topics I studied. It's almost like you can learn immense amounts in higher education if that's your goal.
  - eru 3y ago
    Caplan explicitly addresses this in his book. He says that education should at least either teach you something useful or be fun for the student. You seem to have had both. (I also liked attending university to study math, but high school was a waste of time.) What Caplan argues against is subsidising boring, tedious education for people who don't want to be there. People who just want their piece of paper at the end.
gautamdivgi 3y ago
Isn’t proliferation and ease of availability of student loans making college more expensive? I’d hate to have college only be for people with means to pay. But I think tuition fee increases have far outpaced inflation.

zdragnar 3y ago

Colleges and universities in the US also advertise job placement rates for their various programs. Any argument for the intangible benefits of a liberal arts education must, at minimum, recognize that these are all secondary benefits. Any degree without a clear path to a well paying career is, based on the cost of tuition, a luxury good. This is true regardless of whether the tuition is paid by loans or taxes.

sh34r 3y ago
There is no good reason why tuition is as expensive as it is. Georgia Tech offers a $7k online MS in CS. Community college classes cost hundreds of dollars. You could study in Germany as an unsubsidized international student for a fraction of the cost of a U.S. four year university. The problem is that America is infested with rent seeking parasites who have turned every social good into a scam. Our healthcare system is the most expensive in the world, and yet we have a lower life expectancy than Cuba. We have the most expensive education system in the world, with little to show for it. Why are we devaluing education itself, just because far too many colleges are being run by despicable businessmen? Why are we accepting their rigged game as fixed? Boomers went to college for next to nothing. Gen X didn’t have to pay that much either. The neoliberal corruption of higher education, from a social good into a scam, is a very recent phenomenon. The root of the rot is all the pointless add-on services. Colleges don’t need to run dorms, meal plans, health centers, or any of that. The only thing that should be offered is academics. 18 year olds can go to war. They can manage to live independently, and the ones who can’t will receive Darwin Awards.
- etempleton 3y ago
  Cheap college exists but students and families repeatedly choose more expensive schools with more services. Low cost colleges go out of business because they are seeing declining enrollment numbers. There are low cost options for those who are looking. In terms of America having little to show for the Education system, a disproportionate number of the top colleges and universities are in the US.

jkhdigital 3y ago

Standardized testing is the benchmark for efficient signaling. Of course, it is in a college’s financial interest to insist that their “branded” signal is much more valuable, since a test doesn’t care how you studied for it. A personal anecdote on this point: I enlisted in the US Navy after failing out of UIUC because I preferred to smoke weed and play video games instead of going to class. While on active duty I resumed my studies with online classes at military-friendly Strayer University, which accepted CLEP exams as credit for many lower level courses. I ended up taking like 8 different exams to take care of all my general requirements like sociology and Western civilization, each of which cost $0 thanks to military reimbursement.

gumby 3y ago
> Standardized testing is the benchmark for efficient signaling. I suppose it is indeed the benchmark, but standardized testing has mixed results. Aircraft pilot testing is, I believe, somewhat standardized and does demonstrate that at least when you it you met some baseline level of safety. The bar exam shows you have some baseline level of competency (as a non-lawyer who never read any law I am sure I would not pass) but I doubt it’s especially predictive as to how good a lawyer you will be. I took the SAT and got into a bunch of schools, but I was struck by how it didn’t seem to reflect much of anything we learned in school, except some of the math (we were not given any sat prep nor encouraged to get any). Note: I know MIT says SAT is somewhat predictive as to whether you will graduate, so…? I wonder about these full-cohort tests that control school admissions, such as in China, Korea, Japan, or France. Are the “winners” actually better in some useful way or is it simply a sorting hat that bins students into institutions with good/mediocre/bad networks?
- hibikir 3y ago
  I can tell you about the test in Spain: Ultimately it's actually testing what you learned in school, vs the SAT's IQ + Vocab proxy. Since it asks for so much, in practice it's testing for the quality of your school too, as if your classmates in high school were bad enough, or your teacher cared little about covering the material, you might not have even covered some of the questions. So in practice, some schools averaged extremely good results in some subjects even for the worst students, while in others the very best always scored badly: Imagine in the foreign language test, one school might have a teacher that could actually communicate well in English, while others didn't. Another fun part is that it limits how much a motivated high school can do regarding unfair grading: In my year, the average grades in high school and the grades in the University test, while relatively correlated, had some very big outliers. Do note that in Spain, more than a matter of which university you'll go to, it's also a matter of which major you'll be allowed to study. In general, high paying, low unemployment majors are basically unachievable by someone that tested badly, or had bad high school grades. So it's not a matter if you are going to the right university, but whether you can study anything you care about at all. I had friends that liked computer science, but were C students, so they had no prayer of studying CS. And also note that, even after you get into college, chances of flunking out are very high. About 15% of students are expelled every year from that CS program, to which you have to add the ones that drop out voluntarily. So more than sorting people into colleges, there's a whole lot of sorting into just getting a useful degree in a timely fashion.

philipkglass 3y ago

Is the labor market tight enough for the signaling requirements to relax naturally? If employers struggle to hire enough entry level people who can read memos and learn basic office software, they probably won't require a generic 4 year degree. But as long as there's enough labor that employers can still be picky, I don't see why/how employers will drop that easy (if blunt) 4 year degree filtering mechanism. The signaling value of a traditional degree will go up if fewer people acquire it, so the optimal outcome for parents anxious about their own children's future prospects is that other people's children should consider vocational education or go straight from high school into the work force. I say this aware that many high school grads without academic inclinations are nudged toward universities by default, to their irritation and to the detriment of their more seriously academic classmates. I don't see how to fix it until/unless the labor market gets tight enough to squeak. Until then, every small move to fix the problem will raise the reward for "defecting" back toward earning a degree as a signal.

eru 3y ago
You can just make college more expensive, that should punish 'defecting' all by itself. My favourite policy suggestion for that: make it so that student loans can be discharged in a bankruptcy like any other loan. (Or more precisely, new student loans taken on after the new policy takes effect. No retro-active loan forgiveness.) It's my favourite policy suggestion, because it's a common populist complaint that student loans stay with you forever. So my suggestion looks like it's giving in to that populist sentiment. What is actually does: most students have no assets just after graduation, so bankruptcy is 'free' for them. Thus lenders can't count on getting the loans repaid, and thus won't loan as freely. Cutting off the spigot of student loan money will bring down the price of education.
- Tyrek 3y ago
  but the source lender is the US government, which is awful at adjusting to market economics, and would likely require legislation to slow(?) down lending. How would you convince these populists to support this (not very sneaky) legislation?
- 3y ago

eru 3y ago

Especially Caplan argues that the signalling works just as well for employers, if we give less (or no) subsidies to education. If anything, you can argue that the signalling works even if we severely tax education. And as the signalling arms race is a negative externality on society, we _should_ tax education. (Or rather, we should tax capital-E Education that is useful for signalling, like university degrees. Libraries and Wikipedia don't need to be taxed.)

chowells 3y ago
Did you get a refund for your defective university education? Mine was incredibly educational, in the topics I studied. It's almost like you can learn immense amounts in higher education if that's your goal.
- eru 3y ago
  Caplan explicitly addresses this in his book. He says that education should at least either teach you something useful or be fun for the student. You seem to have had both. (I also liked attending university to study math, but high school was a waste of time.) What Caplan argues against is subsidising boring, tedious education for people who don't want to be there. People who just want their piece of paper at the end.

gautamdivgi 3y ago

Isn’t proliferation and ease of availability of student loans making college more expensive? I’d hate to have college only be for people with means to pay. But I think tuition fee increases have far outpaced inflation.