College as signaling – exceptin’ always Steam

Some economists [like Bryan Caplan] are now arguing that the benefits of college are almost entirely signaling – showing that you can learn and how much crap you can swallow – rather than conferring knowledge that makes you better at doing something people would pay you for. Ideally, something genuinely useful.

This cannot be entirely true, at least if you consider education in the broadest sense. Once upon a time nobody knew how to build a decent steam engine. After James Watt developed one, other people learned about it at some point in their lives – maybe not in college, but somewhere. Acquiring that knowledge increased their human capital.

But it’s mostly true. If you look at college majors, it is easy to see most college instruction is not very useful. 21% business majors, 10% social sciences and history, 7% educational majors, 6% psych majors, 5% in visual and performing arts, 5% in “communication, journalism, and related programs”, 3% English and literature – well over half at first cut. When I looked at a more detailed breakdown, I had a hard time arguing that the useful fraction was as high as 20%. Even when someone studies a subject that is potentially useful, there’s a significant probability that they’ll end up doing something entirely different. And then there’s forgetting – I don’t think most people retain much of what they studied in school, unless they use it in their work or happen to find a subject fascinating.

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54 Responses to College as signaling – exceptin’ always Steam

  1. josh says:

    most people only learn the bare minimum required to pass the test. This isn’t knowledge. It’s useless in the real world.

  2. ursiform says:

    I think many people go to college to get a high school education.

  3. The Right Honourable Clifton Hugh Lancelot de Verdon Baron Wrottesley says:

    Higher Education?

    Dissolution of the Monasteries is my recommendation.

  4. MawBTS says:

    I don’t have a good feeling about any kind of education.

    There are parents called “unschoolers” who don’t give their children any kind of tutoring at all (this is illegal in the US, they lie on government forms and say they’re homeschooling). The only study we have on these kids has them doing worse than traditionally schooled children by one school year.

    The tiny N makes me suspicious. But think of the implications if true: your kid can basically absorb the equivalent of a Year 11 education by doing literally nothing…or you throw away lots of money (plus 14,000 hours of their childhood) and get them educated to Year 12.

    • JayMan says:

      Selection effects…

    • Dale says:

      I read somewhere “When parents are given school choice, they generally choose schools with a strong day-care component.” Don’t underestimate the value placed on getting the kids out of the house for six hours a day!

    • Former Darfur says:

      Many quite successful businesspeople I have known had little or no schooling.Most of them had definite gaps in their overall knowledge but so do many people with college educations.

      These people were not so much uneducated as self-educated. They would find someone who could teach them specific skills if they were not able to figure it out themselves.

    • dlr says:

      The study you cited tested kids who were on average 8 years old (ranging from around 5 1/2 to 10 1/2). That’s the equivalent of being on average in the 2nd grade (and ranging from 1st grade to 4th grade). So, they are about one year behind after an average of about 2 years of schooling. It seems kind of risky to make the generalization that they will still only be one year behind in the 12th grade. It seems like just as defensible of an extrapolation to suggest that they will be 6 years behind by then.

      It is kind of hard to believe that most ‘free range kids’ are going to learn how to read on their own, or how to add or subtract either. Those are skills that have to be taught, and then practiced.

  5. Erik Sieven says:

    are there any non-MINT but useful college majors?

  6. Ray Maddon says:

    Oh yeah, exactly right. I have one friend who majored in computer science and now makes real money coding, but he’s an exception. The vast, vast majority of college students are there because they know they need to signal to employers that they are the right sort of people. And of course, to screw around for 4 more years before entering the dreariness of a 9-5 they probably have little real passion for

    • Wency says:

      “because they know…”

      I don’t think this point is generally respected, at least among people of middling intelligence. People are propagandized into the value of education from an early age — it’s part of the grand theory of the blank slate, that perceived differences in intelligence are simply differences in education level. You go to college to become smart.

      I majored in econ and ended up going into finance. Early on, I let myself be intimidated that I didn’t know very much — my only relevant coursework as an undergrad was Accounting 101. I quickly found that most Finance majors knew much less than I did. They had studied a lot of abstract, mostly useless information and then forgotten it after the exam. I actually paid attention in Accounting 101 and knew how to use Excel, which is really all you need to get started in most areas of business or finance.

  7. pyrrhus says:

    In the US, the Feds allow companies to pre-screen applicants by demanding a college degree, which avoids discrimination lawsuits. So for students who aren’t actually gifted at academic pursuits, it was long a valuable credential. Now that they are handing out college degrees to students who can barely read and write, that is evaporating….

  8. pyrrhus says:

    The other problem–massive cheating on entrance exams…

  9. Jim says:

    From what I’ve heard of the starting salaries for freshly graduated petroleum engineers in the Houston area the oil companies seem to think they are very valuable.

  10. Many of those non-functioning majors you listed could be useful, but aren’t best taught by the same method. Newspapers thrived for two centuries without many college-educated people. I grant that some geography and history in a classroom would benefit them. Does anyone still do that? College math instruction was a lecture on what the new symbol we were using meant, some examples of it, and a pat on the back as we were told to go home and teach it to ourselves. Theater, art, and music are probably best taught in a theater, studio, or music room. All societies have assigned those value, but not as academic studies. A few classroom courses here and there could be valuable.

    • Dale says:

      There was a day when a proper college art curriculum taught you the basics of a number of media, demanded that you master at least one medium, and taught you enough design theory that you were aware why some things looked better than others. But that approach seems to be being abandoned, even in “elite” colleges.

      • William O. B'Livion says:

        My degree is a Bachelor of Fine Art from a well respected institution, and that’s mostly what I got. Graduated 21 years ago.

  11. Todd says:

    The real benefit of a college education was that only some people had them. So basically it was kind of a class, general education discriminator. In the best example, it became the sole discriminator between officer and enlisted material, since more medieval notions fell away.

    Since good colleges have now also become degree mills, other discriminators are popping up, like do have a Master’s degree or do you run marathons and triathlons. In another fifty years, people will want to know if your parents were married.

  12. Todd says:

    …but to clarify. Obviously college should be a place ‘to gain knowledge’ and nothing else. We’ll get there. It’ll happen around the time that job applications ask if your parents were married.

  13. The Lindy Effect would suggest that subjects which have been taught continuously for the longest period of time will be the most likely to be considered useful going forward.
    Falconry was taught to young men of high station centuries ago, but lately, not so much. (Though, there’s an interesting career path today, eh? Might catch on. Sign me up for a weekend.) majoring in Social Media, or Leisure Studies, may be the falconry of our day. Portuguese/Brazilian Studies at Smith may not enhance the mere fact that you got accepted to Smith all that much, but Civil Engineering is likely to still be a going concern in some form a hundred years out.

  14. Andrew says:

    The uselessness of college is less the major than the required general education requirements. Its mostly fluff to get more teaching hours from the student. Classes like basket-weaving have little value.

    I did 2 years in Business before switching to Math/Statistics. I find the core two years of Business to be essential for some work I later did. Consider the typical classes required for AA in business:

    Statistics – more should be required
    Business math/Calculus – useful
    Financial Accounting – I needed this to understand the financial structure of my company.
    Managerial Accounting – Need to know when to shut down and move to China.
    Macroeconomics – Homo Economicus may not be rational, but some models are useful.
    Microeconomics – More of some useful models.

    I thought a BA in Business had diminishing returns ( see, a useful model ) since topics covered were less useful because they were more specific about things that might be learned on the job. Marketing covered what a marketing department does without talking about marketing strategy.

    Charles Murray was spot-on in the days he stated the BA is the work of the devil. I agree on the reasoning that the BA is the mechanism that colleges bundle useless crap with some classes that are truly useful.

  15. JayMan says:

    To that point:

    Educational attainment, unlike most everything else, shows a shared environment effect.

    The Son Becomes The Father

    However, nothing downstream of that (like say income) does. Even more to the point, a population-wide twin study (Bingley et al 2015) in Denmark found that MZ twin discordant for educational attainment weren’t discordant for income. Education is indeed mostly signaling.

  16. not my name says:

    How does this discussion not in include a mention of Griggs vs Duke Power. Particularly as it relates to the phenomenon of “signaling”.

    I’m somewhat torn by this topic. Yes, for the average or slightly above average individual, all other things being equal, here the conventional wisdom is correct. More education is better. And, the cheaper, the better(***). It’s pernicious to promote anything else.

    On the other hand, kids with smart (and caring) family or friends, will give them guidance to know that, for instance, almost all of an undergraduate math curriculum is a waste of time (particularly if you’ve taken AP math and physics), you can learn it all on your own time in high school, and start out in graduate level classes on day one in college. So, in that sense, and combined with the original post’s stats on various majors, yes, the general education curriculum is a colossal waste of time and money.

    I’m sympathetic to busting up wasteful power structures, especially ones that have become indoctrination centers.

    But, I still think a formal, structure education is beneficial and should be promoted

    (*** I got a top-notch graduate degree for several hundred dollars a month via in-state tuition, taking a commuter bus 30 miles each way, while living with my parents. Checkin on-line now, it looks like that schools in-state grad school tuition/fees are $10K. I don’t think that changes my basic position too much.)

  17. Jeff R. says:

    Business classes at the undergraduate level include a lot of vocational-type material in accounting and finance, which are useful to know if you wind up working in either of those capacities, which lots of people do. For whatever reason, to me it seemed like most of the fluff was actually at the graduate level…all these case studies, presentations, group projects, etc. Not that you don’t learn stuff, but geez. It’s not going to prepare you to run General Motors or anything.

  18. Paul says:

    Caplan’s former blogger partner, Arnold Kling describes the degree signal as the Three Cs: cognition, conscientiousness, and conformity. Important signals to select a first round of potential new hires, to be sure. I’ll applaud the day colleges lose the near monopoly on granting that signal. They deserve the bubble burst they’re in for.

  19. Moe says:

    Obviously, college in the US is mostly for one thing, banks.

    The U.S. student loan debt exceeds $1.5 trillion dollars. That is more than credit cards and auto loans. And unlike the others, it is very hard to get out of paying. Only mortgages are bigger, and the house is usually worth most of that money, and can be sold.

  20. Dale says:

    In theory, a proper liberal arts education teaches you, or at least develops your talents in the most abstract cognitive domains, “learning how to learn”. But the recent research shows that on the average the students don’t improve in that sort of cognition. (Of course, most students don’t even pretend to be studying the liberal arts, either.)

    And the long down-slide in amount of effort students put into college ( suggests things are getting worse…

    • Gringo says:

      We find that full-time college students in 1961 devoted 40 hours per week to academics, whereas fulltime students in 2004 invested about 27 hours per week.

      I ended up studying 60+ hours a week for my engineering degree. Most of my fellow engineering students spent about the same time, except for a genius or two.

      • dearieme says:

        I remember being told by a university librarian in the sixties that undergraduates worked an average forty hour week. “What about the engineers and medics?” I enquired.
        “They’re cancelled out by the Social Scientists”.

      • gcochran9 says:

        I remember playing six-hour Risk games.

        • Frank says:

          Wouldn’t the smartest college kids put in the least amount of work? So maybe the people going to college are all very intelligent now. They have extra time for the modern equivalent of Risk (which must be having sex, or something like that).

          • Mark F. says:

            I discovered a could put in very little work (maybe 10 hours a week outside of class) and still maintain a “B” average, which was good enough for me. And I’m not a Mensa member.

  21. melendwyr says:

    High school is no different. Really, what purpose do most classes serve? None at all. People in my HS geometry class complained a great deal about how they’d never use any of that information, and in fairness, they were right. Even people who might eventually go into advanced careers in science and technology are unlikely to need most of what was covered.

    • not my name says:

      You learn geometry because it teaches you to reason logically.

      • Jim says:

        The advantage of elementary synthetic geometry as an introduction to axiomatic reasoning is the intuitive appeal of the subject. On the other hand it’s inherently a very complex subject and many treatments such as Euclid’s are riddled with fallacies. It’s probably better to teach it intuitively rather than use a traditional phoney-baloney axiomatic approach.

      • melendwyr says:

        If you can’t reason by the time geometry class comes around, it’s not going to help any.

    • RCB says:

      My guess is that basic geometry is the most widely useful math topic (apart from basic arithmetic of course). Useful almost any time you’re going to build something. It deals with shapes that actually have analogs in the real world. In contrast, algebra is mostly about learning the rules for moving abstract symbols around on a piece of paper.

  22. To me, one underrated piece of evidence for the signaling hypothesis is that the amount of time students study has been declining, even in the hard sciences, while the college wage premium has remained steady. If they were really building skills through their classroom learning, this would be reflected in some way.

    One could argue that it’s somehow the non-classroom socialization where the “human capital” is developed, but I haven’t seen much evidence for it. Commuter schools should be less valuable if that were the case, for example.

  23. WG says:

    Assuming that there aren’t as many productive jobs as there are people to fill them, maybe the whole education sector exists to give large numbers of people something to do.

    If we don’t assume that, then things appear to be completely out of hand, especially when it comes to higher education: too many students, too many schools, too many degrees, and too much debt.

    Undergraduate degrees have become common, so more and more people herd into graduate and professional programs. They spend their best years chasing credentials. The glut of PhDs is downright tragicomical:

  24. Ivar Berg, Education and Jobs: The Great Training Robbery.

  25. Dr. Dave says:

    I majored in chemical engineering and had a career in chemical process development. Without the skills and information I picked up in the degree programs, I couldn’t have even had a conversation about the process development objectives:
    Improve the process yield. What’s yield? How is it calculated?
    Improve heat exchanger efficiency. What’s a heat exchanger? How does it work?
    Improve discounted cash flow return on investment. How do you compare a one time capital cost for a process improvement with a multi-year, recurring decrease in variable costs? What is a variable cost? What is a capital cost?
    Report your weekly progress. You mean, like, in writing?

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