Noah Smith has had it up to here with economists and pseudo-economists calling everything “signalling“:
Talk to economists, and you’ll find a large number who believe that college — that defining institution of America’s privileged youth — is mostly signaling. It makes sense, after all — don’t most people go to college because they think it will get them a job? And honestly, when was the last time you actually used any of the things you learned in college at your job?
Possibly the biggest promoter of the signaling theory of education is George Mason University’s Bryan Caplan. Caplan believes so passionately in the model that he’s writing a book about it, called “The Case Against Education.” He has already written enough blog posts on the topic to make a small book!
Caplan’s message is bound to appeal to people who dislike the institution of college, whether because they think it’s too politically leftist, or they’re worried about high tuition and student loans. But there are some big holes in the case. Caplan’s GMU colleague, Tyler Cowen, is rightfully skeptical of claims that college is mostly signaling. Let me add my voice to the skeptical chorus.
The piece isn’t just about college, and I’ll get to the rest later, but let’s start with college. He goes on to say:
Well… it depends. In theory, at least, going to work for 3-4 years may convey useful information about your work ethic… but will employers see it that way? More importantly, will the employers you want to work for see it that way? It depends on the job, I’m sure. I wouldn’t spent 3-4 years on a job you can get with only a high school diploma finding out, unless I could get the right job on the right track out of high school, which isn’t easy in large parts of the country.
So is college a way to signal conscientiousness and willingness to work? Maybe. But an even better way to signal that would be to actually work at a job for four years. One would think that if young people needed to do some hard work to signal their work ethics, some companies would spring up that gave young people real productive work to do, and provided evidence of their performance. Instead of paying through the nose to send a signal of your industriousness, you could get paid. But we don’t see this happening.
When you think about it this way, the whole idea of college-as-signaling becomes a little absurd. People’s careers last for 35 to 45 years. But after you’ve been working for a while, prospective employers can look at your work history — they don’t need the college signal anymore. Caplan’s theory therefore is that many young people are spending four years — and lots of tuition money — on something that will only affect the very beginning of a career.
The problem with going straight into the workforce is that it can put you on a single track and it can be hard to get off that track. Unless you have somehow gotten a job where you’ve learned some useful work skills that employers want, I’m not sure “But I’ve shown up at McDonald’s every day for the last four years” is going to be that strong an argument. Now, maybe Smith would argue that’s proof that it’s value-added… but only if the employer is correct. More likely, the employer would just assume that you couldn’t go to college, are unambitious, or 100,000 other assumptions that don’t reflect well on you. They might just assume that you are the person who is meant to work at a job where you need to wear a funny hat. It’s a stages-of-life thing. Working at McDonald’s as a teenager might reflect well on you or might not, but working at McDonald’s past the stage where you’re supposed to be working at McDonald’s makes it look like you were held back a grade.
I didn’t realize how much I felt that employers felt this way until I moved to Deseret, where that was very conspicuously not the attitude. Some of it may be the big city vs small city distinction, but say what I will about Deseret and Mormons, they are people that seriously, seriously value a good work ethic. “You spent two years answering phones about cell phone service and were promoted to a vaguely supervisor job title? Wow, that’s great! You can probably learn XHTML! And completely not in a condescending way!” At best, the sense I got from Colosse is that at best you were biding your time. And why weren’t you going to college? A lot of this is really a collective action problem. By going to college, or not going to college, you’re putting yourself in a particular category with particular people. Which is sending a signal (whether in the way that economists are supposed to use the term or not).
I am not nearly as skeptical of college as Caplan is. I believe a lot of people really do get something out of it. I believe that I did. I believe that most people who spend their free time reading and commenting sites like Hit Coffee and Ordinary Times do. I also believe, as Smith goes on to mention, that there can be significant networking effects. Even at a non-stellar school like Southern Tech, you meet people. This is one of the reasons why for-profit universities so often have such terrible returns, and why which school you go to can matter a great deal at either the high end (Ivy Leagues!) or the lower end (bidirectionals, community colleges, or workbag schools).
Smith goes on to talk about other things, where the arguments range from particularly weak to particularly strong. Fashion? Yeah, a lot of fashion is signalling. Quite conscious and deliberate signalling at that. Leisure, though, is far less likely to be a signalling activity. Is its value embedded in other people knowing about it? Then signalling is probably involved. But if you don’t care what others think about it, then it’s probably not (or, at least, less so…).
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