Would you rather go to Oxford for three years but not graduate, or would you rather go on holiday for three years and be given a perfectly forged Oxford degree? Which would lead to you earning more over the course your life? The answer should be obvious, the latter. Once you admit that you admit that over half of the value of a university degree is signalling, meaning it conveys pre-existing information, rather than teaching new skills (which would be human capital formation). Specifically, the degree shows you have three traits key to success in the workplace: intelligence, contentiousness and conformity. How did we get to this situation? In just over 300 pages Professor Brian Caplan makes, well, The Case Against Education.
For the above example, it’s possible to make an argument that the holder of the forged Oxford degree would be found out as a fraud and swiftly fired while the non-graduate would have difficulty getting a foot in the door but would use their skills to be swiftly promoted, but I think the number of people who truly believe this is close to nil (imagine the degree is Classics, one of the most prestigious degrees). Once you admit very little is learned at university (Caplan pegs it at 20% human capital, 80% signalling), then universities really form an expensive, extensive screening process for employers. This can be extended to earlier stages; students do GCSEs just to do A-levels and A-levels just to do a degree and a degree to get a job. They forget each stage the moment they pass their exams. Caplan comes with pages of charts and calculations to demonstrate his views but the book is still a very enjoyable, even light, read.
The most persuasive argument is probably the “Sheepskin effect” (named because degrees were written on sheepskin). If a degree is about skills, then doing 5 semesters and dropping out in your 6th should be almost as good as all 6. This is not what we observe in reality. In reality, the final year of a four-year degree (Caplan is American) is worth as much as the previous 3 combined, do you really learn more in your last year than the first three? But at high school it is even worse, the final year is worth 6.7 normal years! High school graduation merely shows “I could knuckle down and finish school” rather than being a demonstration of any learning.
So it is unsurprising he also criticises school education, he correctly identifies that most students forget all knowledge of history or geography while pointing out the number who struggle with basic literacy or numeracy. His solution is to focus the curriculum on numeracy and literacy and restricting the other subjects to “taster” classes while making them optional. A friend told me “this will create a society where no one has any general knowledge.” A response might well be “have you spoken to someone on the street recently?” Caplan deals with the expected criticism quite well, he comes prepared with literature showing the minimal increase in analytic ability or “critical thinking” with all stages of education. He doesn’t deny there is any improvement, just that most education is signalling (for example, more intelligent students tend to go to university). It’s true his proposals to curtail university access could harm poorer students, but it might as well make it more acceptable to skip out on university when everyone else is doing it. The Big 4 accountancy firms have started hiring school leavers, but their application processes are even more stringent than the best universities, reflecting the greater risk of not having a three-year university degree to filter out applicants.
Why does signalling pay off for individuals but is bad for society? Well, Caplan uses the analogy of a football match. If one person stands up in his seat he gets a better view, but if everyone stands up then everyone is worse of than if they’d sat down. Getting a university degree is really just like getting a booster seat at Old Trafford. This is why students are happy when lectures are cancelled, they just want to get better marks than their peers and get a 2:1, they don’t want to actually learn (because there is little to learn). If you’re not convinced then try attending lectures at Harvard or Cambridge, I’d be amazed if anyone stopped you, it’s the degree that’s valuable, not the “knowledge” taught on the course.
Obviously, this doesn’t include the social and emotional benefits of university, these may well be considerable but I’m not sure it’s the role of government to subsidise three years of downing jagerbombs in nightclubs, especially when it’s the richest 50% of society that disproportionately benefits. The opportunity cost of three years in work is high, even if government support for university was utterly withdrawn university would still be expensive for society.
Caplan is certainly an extremist; he provocatively entitles one chapter “What’s so wrong with child labour?” and suggests the ideal government funding for education is between 0 and a negative number (meaning a tax on higher education to reduce signalling’s negative externalities). You don’t have to be such an extremist as he is to agree that a degree is a requirement for too many jobs and that too much time in school is spent on subjects that students won’t remember. The better way to prepare students for the world of work would be, well, work (or, failing that, core literacy and numeracy skills).
What do I think as a teacher? I think the Chinese system where English, Chinese and Maths make up 90% of the primary curriculum has a lot of merit. I think reducing government support of university while expanding support of apprenticeships would make “I didn’t go to university because it was a waste of time” something far more socially acceptable to say, which would be a net welfare gain for society. Will I tell my students that their classes are mostly signalling and they’re learning almost nothing from me? Maybe only after they take their final exams, then their cynicism is an issue for their professor rather than their teacher…
Goodreads score: 4.0