MCViewPoint

Opinion from a Libertarian ViewPoint

For 12 Years and Tens of Thousands of Dollars, Is Schooling Worth It?

Posted by M. C. on April 25, 2022

Among economists who study the effects of education, there is a great divide between those who believe that education augments your skills and thereby enables you to do a better job (the “human capital” crowd) and those who think that education mostly reveals your pre-existing abilities and thereby enables you to get a better job (the signaling crowd). Caplan is firmly in the latter camp. 

by George Leef 

https://libertarianinstitute.org/articles/for-12-years-and-tens-of-thousands-of-dollars-is-schooling-worth-it/

The Case against Education: Why the Education System Is a Waste of Time and Money by Bryan Caplan (Princeton University Press, 2018, 395 pages).

Almost every book on education policy (and I have read a great many of them) springs from the set of assumptions that education “experts” embrace: that schooling builds our stock of knowledge and skill, that it needs to be done mainly by government, that it makes us better human beings, and that we owe our prosperity to our great “investment” in education, kindergarten through college.

Among the tiny number of books that challenge the conventional wisdom about education, the latest and perhaps the most daring is Bryan Caplan’s Case against Education. Caplan, a professor of economics at George Mason University, is not, of course, against people’s acquiring skills and knowledge, but contends that our current system of education does a poor job of that, and at inordinate cost to taxpayers. He would like to see government subsidies for education stopped and believes that in an ideal world, education would be kept separate from the government.

Caplan puts his case starkly: “Most critics of our education system … miss what I see as its supreme defect: there’s way too much education. Typical students burn thousands of hours studying material that neither raises their productivity nor enriches their lives. And of course, students can’t waste time without experts to show them how.”

At this point, nearly all readers will be thinking, “Well, that is obviously wrong, since we know that college brings a handsome payoff to graduates. That college premium certainly shows that more years of education are valuable.”

Here is Caplan’s reply: “How could such a lucrative investment be wasteful? The answer is a single word I want to burn into your mind: signaling. Even if what a student learned in school is utterly useless, employers will happily pay extra if their scholastic achievement provides information about their productivity.”

How signalling works

Among economists who study the effects of education, there is a great divide between those who believe that education augments your skills and thereby enables you to do a better job (the “human capital” crowd) and those who think that education mostly reveals your pre-existing abilities and thereby enables you to get a better job (the signaling crowd). Caplan is firmly in the latter camp. He argues that the education premium that people enjoy for having crossed various educational thresholds is about 80 percent due to signaling and only 20 percent due to human capital improvement.

Education signals three broad traits: intelligence, conscientiousness, and conformity. Employers of all kinds want workers with those traits. While it is possible for a person to acquire them in the absence of formal education, it’s almost impossible to let the rest of the world know that — and without such knowledge, few employers will take a chance on you.

Suppose you try to signal your employability in some way other than by getting educational credentials, say by dropping out of high school to prove the Riemann Hypothesis or something equally brainy. Unfortunately, even if you are able to convince some people that you’re a math genius with your proof, to most employers that actually sends a bad signal — your lack of conformity. Trying to get noticed without educational credentials rarely works. Consequently, Americans have become so fixated on those credentials that nearly everyone feels compelled to play the expensive “sheepskin” game.

See the rest here

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