By Bryan Caplan
Josh Barro shined his spotlight on signaling last week:
How many of the people talking down college as “mostly signaling” learned about signaling in a college economics class?
— Josh Barro (@jbarro) February 13, 2015
I could be wrong about Barro’s intent, but he seems to be accusing education skeptics like me of living in denial.
The thrust of his rhetorical question is that most people who believe in signaling’s importance wouldn’t hold their position if they hadn’t learned it in college. Hence, college plainly teaches one important lesson. While this isn’t a knockdown argument against the power of signaling, it’s suspicious. Are we really supposed to believe that signaling is an isolated exception to the rule that schools teach little of practical value? If you have to go to school to learn reasons why school is overrated, you probably have to go to school to learn lots of great stuff. Signaling isn’t exactly self-refuting, but it definitely seems self-undermining.
Assuming I correctly divine Barro’s intent, do I have a rebuttal? Yes, a three-part rebuttal.
1. Suppose it’s really true that signaling’s fans were first exposed to their idée fixe in college. Before you “sense a tension,” remember that the signaling model never denies that students learn stuff in school. What it claims, rather, is that much of that stuff fails to yield practical job skills. To demonstrate a troublesome tension, you need to show that learning about signaling markedly increases worker productivity.
Unless you’re a professional intellectual, it doesn’t. You don’t need to understand the signaling model to succeed in business. You don’t even need to understand the model to succeed in school. Once students know that doing well in school leads to career success, and employers know that good students are good workers, consciously grasping the signaling model conveys little additional selfish benefit.
Thus, the tension is illusory. The signaling model typifies the non-vocational focus of the curriculum. It’s like history or foreign languages. The knowledge is genuine, and good grades help you get the career you want. But the labor market doesn’t mind if you forget such material as soon as you submit your final exam, because you rarely if ever use it on the job.
2. If signaling is socially wasteful, and students discover this truth in school, doesn’t this at least show that education has major positive political externalities? It would if education heavily undermined political support for impractical education. Unfortunately, it doesn’t. Most students never learn about signaling, and most of those who do learn it never accept that a lot of education is socially wasteful. Economists who teach signaling normally treat this contrarian implication as a curiosity, not a deep policy lesson.
The central flaw in the positive political externality argument, though, is that signaling is a microscopic subset of the overall curriculum! Run-of-the-mill K-12, college, and graduate classes strive to convince students that education is awesome and should be subsidized to the skies. If signaling is true, this amplification of students’ pro-education bias is another big negative political externality of education as we know it.
3. In any case, the main thing students learn about signaling in economics classes is its technical name. Virtually every child swiftly grasps the idea of signaling from first-hand academic experience. That’s why students love class cancellations, seek out easy-A’s, happily forget material right after the final exam, and don’t think cheating is “only cheating yourself.” Sure, most kids are inarticulate – and few voters grasp signaling’s policy implications. But resigned awareness that, “To get ahead in life, I have to learn this useless material” usually emerges long before college.
P.S. Although I think Barro’s rhetorical question is misguided, I commend him for appealing to people’s first-hand pedagogical experiences. Economists would see education much more clearly if they spent less time desperately searching for instrumental variables and more time vividly recalling all the junk they had to study in school.