How Does Belief in the Signaling Model Affect Educational Attainment?
Lectures about the signaling model of education usually provoke excellent reactions from the audience. But they also provoke some truly obtuse questions. The worst of the worst: “So I might as well just drop out of school?”
No! A thousand times no. The signaling model says that education pays despite its uselessness. That’s the whole point of the model.
Still, this obtuse question raises an interesting issue. If you believed that the signaling model was true, how would this affect your educational attainment? I can think of two credible, mutually offsetting mechanisms.
If you’re narrowly self-interested, belief in signaling should actually increase your educational attainment. The mechanism: Suppose you harbor doubts about the usefulness of some of the curriculum. Every marginally observant student occasionally asks himself, “Am I really going to use this stuff after graduation?” The signaling model silences these inner doubts: “The market rewards academic performance even if you are studying utterly useless material. So suck it up and stay in school.”
If you’re ethically minded, however, belief in signaling does indeed tend to suppress educational attainment. Suppose you’re somewhat utilitarian. Then when you decide whether to pursue another degree, you won’t just ask yourself, “Will it benefit me?” You’ll also ponder the effect on all your rivals in the labor market, who will look slightly worse in comparison. As a result, you’ll be a little less eager to continue your education.
As an economist, my strong prior is that self-interest usually overpowers ethics. On balance, then, an individual’s belief in the signaling model probably increases educational attainment by quelling doubts about the practical relevance of the curriculum. The offsetting ethical effect is small by comparison. Depressing? Slightly. But that’s life.