The Return to SAT Preparation Classes
This raises a deeper question. Suppose a randomized controlled experiment proved that SAT prep classes noticeably raised your lifetime income. Since employers are extremely unlikely to know that you took an SAT prep class, you can’t just say, “SAT classes send a good signal to employers.” So what’s the right story?
A few possibilities:
1. SAT classes really do permanently raise your cognitive ability, tons of other evidence notwithstanding.
2. SAT classes permanently improve your non-cognitive ability – a.k.a. “character.”
3. SAT classes get you into a better college, which in turn sends a good signal to employers.
Perhaps my personal experience is atypical, but it is extreme: Everyone I’ve ever talked to about SAT preparation believes #3. It’s a simple story, it makes sense, and it’s true to life.
My claim: Economists should take this SAT preparation example to heart. If the labor market really rewards preschool, summer enrichment, or small classes, that hardly proves that a little extra education permanently improve students’ minds or souls. There is a plausible, depressing alternative explanation. Namely: extra education helps students get over the next educational hurdle they’re going to face. Once they get over that hurdle, they reap handsome rewards – even if they’re only slightly more productive than peers who didn’t make the cut. The educational innovations that social scientists keep looking for may, like SAT preparation classes, turn out to be nothing more than rent-seeking.