Here’s an excerpt from the latest draft of The Case Against Education.

The link between practical skill and worldly success is subtler than either mainstream defenders or contrarian detractors of modern education imagine.  The skillful do a good job.  The successful have a good job.  Despite its weak effect on skill, education remains the modern economy’s surest stairway to prosperity.  The more steps you climb, the better the market treats you.  If you personally know a lot wealthy dropouts and indigent college grads, you personally know a lot of exceptional people.

Challenge the data all you like.  Correct for brains, motivation, family background, choice of major, and beyond.  The education premium will shrink before your eyes.  Yet the shrinking stops long before the education premium disappears.  Vocational majors are especially lucrative, but even Fine Arts and Archaeology degrees boost your income by 30% or so.  While you count the cash, don’t forget the equally solid effects of education on employment, health insurance, pensions, and beyond.

Why would shrewd, money-grubbing employers pay such exorbitant rates for archaeologists?  Education’s contrarian detractors typically blame the government, but their stories fall flat.  Government sinecures?  The private sector pays more for education than the public sector.  Regulation?  The education premium in licensed and unlicensed jobs is roughly the same.  Lawsuits?  Legal doctrine notwithstanding, the IQ “test tax” is only a pittance.

Contrarian detractors should stop avoiding the obvious explanation: signaling.  Going to school to certify your skill can be as lucrative as going to school to enhance your skill.  If archaeology B.A.s are better workers than high school grads, an employer needn’t waste his time wondering, “What useful skills do archaeology programs really teach?”  Instead, he’ll skip the bottom line: “When I pay 30% extra for an archaeologist, I get my money’s worth.  End of story.”

Education’s contrarian detractors and mainstream defenders have one illusion in common: Both think they can kill two birds with one stone.   The detractors find little effect of education on job skills, so they ignore the evidence about the strong effect of education on worldly success.  The defenders find a large effect of education on worldly success, so they ignore the evidence about the weak effect of education on job skills.  Both sides make strong cases as long as they stick to the evidence they know.  Both sides falter, however, when they use one body of evidence to close two separate cases.

The wise approach is to take all the evidence seriously.  To understand education, we have to look at skill and success, at learning and earning.  Irrelevant education really is financially rewarding.  Human capital purism can only respond with denial and dismay.  We should be thankful, then, that the signaling model is ready, willing, and able to pick up the slack.