Free Education Valued at Cost

Signalling theory

I’ve just gone back and read the post from earlier this year about the idea that education is mostly just signals and not really educational.

I can’t help but think that if a college degree is on average just a signal (and not significantly cognitively beneficial) the signalling theory implies that if any employers who could devise a cheaper, quicker and more accurate method of deciding the quality of their hires than making them spend four years at useless college would clean-up by being able to employ much cheaper no-college kids who are equal in quality to degree-dolders.

The incentive to do this is massive, given the differential in salaries between those with and without degrees. The fact that this does not happen implies to me that college _is_ educational.

The reason economists are sympathetic to signalling is that they are very smart (yes, really) and are among the people who probably don’t benefit greatly from college, they learned how to think at high school and are mostly self-educated anyway. To understand educational benefit I think you need to focus firmly on the middle of the distribution curve – Cal State, not Berkeley.

I share your feeling that this may not be the beginning of a big change in industrial organisation in the provision of higher education. At the same time, I think you are underestimating potential demand for free “attendance” at lectures at top notch schools. I think a market exists among high quality students, graduates and teachers at lower quality universities internationally. They do not have the option of coming to class at Yale because of prohibitive transaction costs.
They may find it selectively of great value to be able to sit/skim through a full course in their area of study (or teaching) as a shortcut to staying in touch with the mainstream of world (or Anglo-Saxon world) science.
I believe the international market may be large enough to be interesting in terms of viewership and even revenue potential.
It should also be noted that before Yale other universities of similar stature have provided free video lectures (e.g. http://webcast.berkeley.edu/courses).
The next boundary may be the use of commonly accessible audio and video communication technologies (microphones, webcams, VOIP) to allow eLearners more active participation in lectures. That would be industrial change – getting a Yale education via Skype and email with access to library collections but without the cost of travelling to and living in CT.

I can’t help but think that if a college degree is on average just a signal (and not significantly cognitively beneficial) the signalling theory implies that if any employers who could devise a cheaper, quicker and more accurate method of deciding the quality of their hires than making them spend four years at useless college would clean-up by being able to employ much cheaper no-college kids who are equal in quality to degree-dolders.

Indeedido… but I say old chap… have you ever heard of Griggs Vs Duke Power 1971?

I do not think that college can be free. Some one has to do something in order for someone else to learn it. And no one does anything free anymore. Also, you can look at it on the time and hard work level. Someone is giving up their precious time to learn new skills. Also, nothing comes without doing a little work. So you could say that one person gets it free money wise but someone else has to pay for it.