Bill Dickens versus the Signaling Model of Education

I’m with Bill.

I’m with Bryan.

I’ll be a senior Physics major starting tomorrow and I still haven’t learned what I need for the job market. My entire undergraduate degree is just signaling to graduate school (which is basically a job if you’re a physicist because you teach and do research) that I like physics and I can handle the workload.

I think the consumption component of education is at least as big as the signaling component.

All very commonly used expressions whose meanings would probably be completely lost on someone who had three years of trade school after grade school and then went straight to work. But anyone who attended college has probably been exposed to those ideas through conversation if not through attending classes.

I’d wager that a shocking number of college graduates would not be familiar with phrases like “original position” or “zero-sum game.” The desire to be an intellectual of some sort does not reside in most people, even most college graduates. When all your friends are academics, intelligent lawyers & physicians, and other intellectual types, it is easy to forget that most people, even those who are of above average intelligence, don’t care about Metropolis and its critique of modern society, and the like.

@David Friedman

Does being mostly an autodidact in your field make you see college as more signaling than it would be if you worked in the field you were externally trained for?

One thing that has gone without mention here is that regardless of one’s position, the degree to which either the human capital or signaling theories of education are “correct” is always a matter of degree. If 90% of what is taught has no effect on productivity, and thus wages, the signaling theory explains 90% of the issue. I think a more useful debate is whether this percent should be higher or lower and not over which theory is correct or incorrect in some misleading dichotomous manner.

Bill wrote:
“Mainstream schools have experimented with programmed learning, lectures on video, self-paced learning, etc. and none of the methods have caught on. Why wouldn’t they if they worked?”

These methods do not work because they are not costly signals and thus do not create separating equilibriums. The signaling theory of education is based on the assumption that the signal is sufficiently difficult for certain agent types send (i.e. the lazy/unintelligent). This assumption is independent of whether or not formal education effects productivity.

Most his Bill’s arguments are non-responsive in similar ways.

“1. Perhaps students are getting smarter anyway and, by going to college, they are just waiting until they are smarter to enter the job market.”

If this were the case, why would students and society spend so many valuable resources on college? Why not just wait four years, read books, and play thought provoking games or do the crossword? Unless college itself is providing a real benefit or acting as a signal, no reason to pay the tuition.

” an environment where you have considerable freedom about how you spend your time. ”

This could make sense for people who work at home alone but most people work in an office or other environment with other workers.

Some college is consumption. Some people spend a lot of money and get deep in debt for said consumption. Why is this a good thing?

” The original position,” “fair game,” “zero-sum game,” “categorical imperative” etc. etc. All very commonly used expressions whose meanings would probably be completely lost on someone who had three years of trade school after grade school and then went straight to work”

These are not common expressions for college graduates I know. Most Americans, including college grads, use sports and Hollywood for their cultural references. Robert Byrd was the last politician who quoted Shakespeare.

Don’t get fancy. Formal schooling is largely an artifact of organized violence (the State).

K-12 schooling is compulsory. E.G. West argues that compulsory attendance laws empower rent-seeking by public-sector employees and other contractors to the system.

Post-secondary credential requirements allow businesses to discriminate against people whom anti-discrimination laws would otherwise protect.

(1) Signaling is not “a nearly unproductive enterprise.” Signaling is communicating important information. Self-instruction loses out in competition with formal schooling because it fails *as signaling*. (2) “High school allows you to practice showing up on time and doing what you are told. College allows you to practice and work out techniques that work for you that allow you to take on and complete on time complicated multi-part tasks in an environment where you have considerable freedom about how you spend your time.” The former is especially important. But completing high school also constitutes a *signal* that you can show up on time and do what you are told. Generating the signal is more important than producing the disposition itself, which (in any case) many people have innately. (3) “[T]he shared culture produced by the education experience expands our common language with a lot of meaning, and that produces huge network externalities.” I’d want to see some measurement of that “huge”; I doubt that the common-cultural effects produced by formal education are very important in practice. (4) “Reading, writing and numeracy are all obviously important.” That takes us through third grade. If formal schooling doesn’t convey those skills within three or four years (and for many pupils it doesn’t), it’s time to try some other method.

(4) “Reading, writing and numeracy are all obviously important.” That takes us through third grade. If formal schooling doesn’t convey those skills within three or four years (and for many pupils it doesn’t), it’s time to try some other method.

No. I can grant the numeracy point if by that term all one means is arithmetic (but it certainly doesn’t hold if it includes algebra, geometry, calculus, statistics, etc.). But improving one’s writing is a life-long process. Even the most gifted writers go through many drafts, at least if we’re talking about books, scholarly articles, professional memorandums, and other serious writing. And most will say they improve as writers the more they write. The idea that one could learn all he or she needs to know about writing by third grade is absurd. Sure, most people never write (important) things for others, but even peons have to write emails at work these days.

Moreover, the idea that one could learn all she needs to know about reading after three or four years of primary schooling is similarly laughable. I won’t bore the readers by detailing why this is true.

To state the painfully obvious, rejection of the idea that all necessary education should be completed by the third grade is not mutually exclusive with the theory that collegiate education is wasted on most people.

“But improving one’s writing is a life-long process.”

I agree. But I’m not sure that college (or high school) courses play a large role in that process.

…

“Moreover, the idea that one could learn all she needs to know about reading after three or four years of primary schooling is similarly laughable.”

Again, I agree–but one learns to read mostly by reading, not by taking English courses.

As someone generally sympathetic to the signaling model, I’d like Bryan to explain why he assumes that all or most educational signaling is inefficient. In a world of costly information, a separating equilibrium can be efficient. Of course, signaling is inefficient if there exists a lower-cost means of providing the same information — but that’s not obviously the case, given that higher education signals qualities other than IQ. In addition, the costs of educational signaling must be discounted by the degree to which they have other benefits.

Without having considered the systematic evidence, I offer an alternative hypothesis based on my experience working at a publicly funded university: that college once provided a relatively efficient separating equilibrium, and the subsidization of higher education over the last half-century has largely been an attempt to replace the separating equilibrium with a (less efficient because non-informative) pooling equilibrium — for egalitarian reasons. The attempt has only been partially successful, because GPA and brand name still allow some differentiation.

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.

@David J. Balan: Isn’t your question based on the assumption that if you forbid a ‘secular’ student to go to college, his ‘usability’ to the potential employer when he turns 24 would be the same as the ‘usability’ of the haredi jews?

Didn’t anyone here study computer science or engineering?

Prof. Caplan, do you concede that it’s possible that some kinds of education can directly add to a person’s productivity on the job?

@Tracy W

Your post supports my earlier post, but your tone seems to be antagonistic towards me. Did you confuse me for another poster? Or did I misread the tone?

Ph.D. in the Humanities
M.A. in English
B.A. in Recombinant Gene Technology, minors in Chemistry and English

Job: hotel night auditor

Clearly my signaling sucks.

Or, what am I signaling?

@Tracy W

It appears I misread your post. Thanks for clearing that up!