Tyler Cowen speculates

Men are born beasts. But education gives you a peer group, a self-image, and some skills as well. Getting an education is like becoming a Marine. Men need to be made into Marines. By choosing many years of education, you are telling yourself that you stand on one side of the social divide. The education itself drums that truth into you.

I think that this hypothesis says that education’s effects should differ across people of different temperaments.Apart from the specific hypothesis, what is notable is that Tyler dismisses, at least implicitly, the notion that the actual content of education accounts for its value. That would seem to imply an enormous profit opportunity: come up with a way to provide the mysterious benefit of education at less cost.

As he points out, that has always been a weakness of the signalling literature. If education is nothing but a signal, then it would pay an entrepreneur to come up with a more efficient signalling mechanism.

As long as we’re just speculating, let me suggest another hypothesis. Education is supposed to increase our ability to learn. It is not that we accumulate useful knowledge in school, but we build up the mental equivalent of muscles. But many people stop learning at some point in life, resulting in mental atrophy.