Bryan Caplan writes
The vast majority of research on the [returns on higher] education – including IVs, RTCs, etc. – does not empirically distinguish between human capital and signaling. The better papers explicitly admit this.
Students spend a lot of time learning subjects irrelevant to almost all occupations (except, of course, teaching those very same irrelevant subjects).
Teachers often claim that they’re “teaching their students how to think,” but this goes against a hundred years of educational psychology’s Transfer of Learning literature.
When education researchers measure actual learning, it’s modest on average, and often zero. And yet employers still pay a big premium to e.g. college students who’ve learned little or nothing. The same goes for the return to college quality. It doesn’t seem to improve learning, but it substantially improves income.
There is a growing empirical literature using the El-SD (employer learning – statistical discrimination) approach to measure the effect of signaling. It usually finds moderate signaling, at least for non-college grads. It looks like you have to finish college to quickly get employers to reward you for measurable pre-existing skills.
The sheepskin literature finds large effects of merely finishing degrees. They eventually fade out, but it takes 15-25 years. This isn’t iron-clad evidence for signaling (what would be?), but it’s strongly supportive.
My book will also argue that ability bias is a much bigger problem than the David Card consensus will admit, and that the positive externalities of education are overrated. So the social return to education turns out to be quite low. In terms of policy implications, I’m going to argue for large cuts in government spending on education, and a lot more vocational education on the German model.
We are not paid for our knowledge. We are paid for the rate at which we assimilate and adapt to information and circumstances. We are paid to quickly and inexpensively solve problems in dynamic economy.
Universities successfully filter for those people able to assimilate and adapt to information and circumstances. People who pass the filter are more likely to adapt to the shock of entering the work force and quickly learn the nuances of both organizations and business processes.
Since IQ is largely an expression of the RATE someone is capable of learning, the data should show that universities essentially sort by IQ. And it appears to show just that.
I am not convinced (and I think you’ve come to the same conclusion) that people learn anything of value in university other than work discipline. (Sowell has been saying this for years.)
It also appears that people eventually sort by IQ in the work force regardless of their education. So, it would seem that an education is a means of temporarily increasing your earning capacity at the median, and a way of shortening your access to income at the top. But at the bottom higher education’s a waste of time, and a burdensome debt.
Americans try to educate everyone to join the upper middle class, and it’s a waste of effort and produces an incompetent working class. instead, we should, as the Germans do, focus on creating a superior working class, because the upper 20% will succeed as long as we don’t impede them too much.
As you’ve stated elsewhere, and as the economic evidence shows, the German model is a superior education system, and perhaps the Finnish model is the best primary school system. For certain, boys should start school later than girls. and should be physically active despite the risk of ‘being boys’.