Degrees are signals. A degree from a reputable university signals both a group membership in a certain social group (e.g. "Ivy League graduates") as well as a c

Degrees are signals. A degree from a reputable university signals both a group membership in a certain social group (e.g. "Ivy League graduates") as well as a common shared experience. A degree in general also signals some level of social status (i.e. able to afford that university) as well as the rote learning ability, endurance and willingness to put up with arbitrary hurdles and rules to achieve that degree. To an extent it also demonstrates an ability and willingness to subordination and deference to authority. You seem to believe that companies look for the most skilled person to do a given job. They don't, even if they keep saying that. They look for someone willing to put up with as much bullshit and punishment as the company can get away with while creating as much profit for the company (or whichever metric is used instead) as possible without making the company leadership look bad. For higher positions like management they usually look for someone exactly like who they already have but who won't threaten their status within the company. For leadership positions they usually look for someone who won't fraternize with the subordinates and knows how to play politics. In addition to its use as signals, degrees used as a filter are also a base level way to demonstrate due diligence. If you take the guy without a degree, that's a risk and if he's a dud, that was a bad decision. If you take the one with a degree and he turns out to be a dud, that's just bad luck.