My debate partner David Balan poses a fascinating test of the signaling model in the comments:

Here’s a possible test. Among Israeli Jews there is a substantial religious
minority known as “Ultra-Orthodox” or “Haredi” Jews. In this group a
large fraction of the adult men neither go to the army nor to work,
instead they spend most of their lives in yeshivot studying religious
texts. They usually receive little or no secular education. Because of
the poverty that this causes, which is exacerbated by large families, a
relatively small number of Haredi men are starting to seek vocational
training and going out to work. This number may or may not grow
significantly, depending on how various intra- and inter-communal
political battles play out.

These yeshiva students have definitely been trained in
self-discipline; yeshivot have much much more demanding schedules than
regular schools. And the study of the religious texts, particularly the
Talmud, involves a certain amount of what, stretching the term a bit,
could be called logical reasoning (though most definitely *not*
rationalism), so they have a relatively high level of cognitive
training and literacy.

So here’s the question for Bryan. If these guys do ever decide to
enter the work force in large numbers, how do you think they’ll do? If
education is all about signaling, then it seems like they should do
pretty well: they can demonstrate having done difficult deeds, just
like someone who got into and out of a selective college. Moreover, to
the extent that what school actually teaches you is merely basic
reasoning and literacy, they get a fair amount of it, which also
suggests that they should do OK. If, on the other hand, secular
education actually teaches you something beyond how to read and do
certain narrow cognitive tasks, they should have a lot of trouble.

What do you think will happen? Does your answer depend on how many
of them enter the workforce at once (maybe there are niches that a
relatively small number of them could successfully work in, but not
enough to employ a very large number of people with that background)?
There may even be a bet in here somewhere.

I wouldn’t accept this as the make-or-break test of the signaling hypothesis, but I’ll certainly agree that the more important signaling is relative to human capital, the better the prospects of the ultra-Orthodox who choose to enter the modern economy. 

The fly in the ointment is that there are obviously non-educational differences between the ultra-Orthodox and other Israelis; in particular, they’ve shown multi-generational indifference to worldly success.  But I’ll still predict that ten years after they enter the secular labor force, the ultra-Orthodox will perform much better than their years of secular educational attainment predict.