Noah Smith vs. Bryan Caplan on College Education and Singalling

     They're having an interesting debate on whether or not the real value of college is mostly what it signals to prospective employers. Actually the debate seems to go back some years around the issue of what economists call the 'Human Capital Model.'

      http://econlog.econlib.org/archives/2012/06/toga_toga.html

     Here is the latest:

     Noah Smith, writing for Bloomberg view, isn't happy with the educational signaling "fad."  Here's my point-by-point reply.  Noah's in blockquotes, I'm not.

"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?"

    "It does indeed "make sense."  And according to the only survey of which I know, economists in general are at least open-minded about educational signaling.  But Noah strangely neglects to mention that empirical labor economists in general, and education economists in particular, rarely engage the signaling model.  Human capital purism really is their dominant paradigm - and they studiously ignore the "when was the last time you actually used any of the things you learned in college at your job?" argument."

"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."

      http://econlog.econlib.org/archives/2015/04/educational_sig_1.html

      Much as I hate to agree with Caplan-as the 'signal' I get from him is of being an extreme Right libertarian-I think his general point about college may be dead on. Actually, I suspect that the importance of college as a signal may have wanted greatly. The trouble over the last 15 years is that too many people go to college now and get degrees.

     Many of these folks get their high falutin degrees and then are stuck flipping burgers or working at Dunkin Donuts anyway. There was a time when having a college degree was really perceived as a big deal-if you were a 'college boy' you were one of a select few. Today it's kind of par for the course.

     I remember my own experience trying to break into the accounting world with a degree where employers wouldn't' take a chance as I lacked the experience-this was around 2002 and on. It becomes the catch-22: you can't get a job because you lack experience-degree or no-but you can't get experience as they refuse to give you a job.

    I joined the labor force in 2001 and literally saw it change overnight-from it being easy to get a job until June, till overnight being very difficult-what the economists call a 'tight labor market.'

      Again, I was unlucky as to when I broke into the job market, it changed overnight from a seller's market to a buyer's market.

     During the 90s, they would hire you and if you were unqualified or incompetent they'd only figure this out after paying you for a month. But with the change, they were able to become a lot more choosy. No one wanted to take on someone for the first time.

    So even if Caplan is on the Right on this point he may be, well, right' It's not only he who is speaking out against college-Krugman has for a long time argued that it is overemphasized.

    http://www.economist.com/blogs/schumpeter/2011/04/higher_education

    I am quite suspicious that technological progress over the last 15 years has led to a major dropoff of many higher end kinds of jobs.

    So I kind of agree with Caplan about education but that's partly because I think that it's golden age as a signal has long since peaked. We're long since the time when even more education has reached the level of diminishing returns.

    So my complaint with it is that it's signal is no longer strong enough.