The Case Against Education is now in paperback, with a new Afterword by yours truly.  Highlights from the Afterword:

My earlier work (Caplan 2007) maintains that when economists and the public disagree, the economists are usually right.  The Case Against Education, however, focuses on a rare topic where economists and the public are on the same page.  The sad result, in my view, is that economists end up rationalizing popular errors rather than correcting them.  Not all economists, of course; Michael Spence won a Nobel Prize for developing the signaling model on which my book relies.  Yet by and large, labor and education economists thoughtlessly equate schooling with “human capital formation.”

Though this allegation may seem harsh, I stand by it.  Almost all of the evidence on jobs and incomes that economists present on behalf of the human capital model is equally consistent with the signaling model.  To adjudicate the debate, we need to go beyond economics to psychology, sociology, and education research – the fields that directly measure students’ learning and workers’ skills.  Yet few economists who specialize in education bother to skim this extra-economic research, much less read it carefully.

What about that Arteaga study?

An excellent article, but given the massive quantity of prior research, I am baffled by the idea that any one paper could appreciably tip the scales.  If the numbers from Universidad de Los Andes came out the other way, can we really imagine many economists abandoning the human capital model, or even significantly moderating their support?  In any case, the Colombian curriculum reform axed some of economics and business students’ most vocational coursework!

[T]he reform: (i) took six mandatory courses and change them to optional courses (Monetary Policy, Public Finance, Trade, Marxist Economics, Colombian Economic Policy, and Social Programs Evaluation); (ii) reduced the number of optional courses by four; (iii) combined two probability and statistics courses into one; and (iv) combined accounting and economic measurement courses into one. The business department eliminated Computer Programming, Simulations, and Microeconomics I. In addition, the requirement of six upper-division electives was reduced to three. For both majors, instruction time was reduced from 4.5 years to 4 years. (Arteaga 2018, p.214)

After interviewing employers, Arteaga reports:

(i) most knew about the reform from talking to recent graduates; (ii) they believe they can detect changes in human capital through tests they administered in the recruitment process; (iii) they argue that for some jobs, the content made optional in the new curriculum is critical; (iv) they believe that taking fewer elective courses affects graduates’ labor prospects beyond the recruitment process, because the professors in those courses are helpful with job offers and job referrals; and (v) wages for new graduates are fixed.

Obviously Arteaga had to work with the natural experiment that really occurred, but she is looking for signaling outside its native habitat.  Looking forward, researchers should instead keep their eyes peeled for curriculum reforms that add or subtract clear-cut “fluff.”  The foreign language requirements so many Ph.D.s in the sciences used to endure are one fine example.

Big picture:

After ceding sprawling intellectual territory to signaling, however, most respondents balked at my top policy recommendation: educational austerity.  If we’re wasting hundreds of billions of taxpayer dollars on a vast academic arms race, why not cut the subsidies?  The balkers coalesce into four main groups: humanists, reformers, egalitarians, and fatalists.

How do all four groups go wrong?  Buy the book to find out!