[Kaiserschmarrn]

Bryan Caplan’s ‘The Case Against Education’ — A Review



A review of The Case Against Education: Why the Education System Is a Waste of Time and Money by Bryan Caplan. Princeton University Press (January 2018) 416 pages.

Almost no issue unifies commentators across the political spectrum as support for education, though their motivations strongly differ. For the left, affordable education is a great leveler for disadvantaged groups and also a force for cosmopolitanism. For the right, it represents an equality of opportunity that can substitute for a generous welfare state. But almost everyone seems to believe that more people with high-quality education means better and more productive workers.

Among the exceptions are a minority of economists studying education. Beginning with Nobel Prize winners Kenneth Arrow and Michael Spence in the 1970s, these economists proposed that people with more years of education earn more not merely because of the skills and knowledge they accumulated during their time in school (“human capital”) but largely as a function of the information their degree signals to employers. The Case Against Education by George Mason University economist Bryan Caplan is the most thorough and compelling synthesis of the research in favor of the signaling model of education. The essence of the book is an empirical claim — that only a fraction of the extra wages that graduates earn can be explained by skills and knowledge — and a set of policy proposals to end wasteful spending on unnecessary education.

Signaling

The signaling model is compelling to many skeptical autodidacts in part because people spend years toiling in classrooms learning things that their careers do not require. Caplan calls this puzzle the “ubiquity of useless education”, and it is not just a matter of comparative literature majors never using critical theory for their day job. Even heavily quantitative and practical majors like computer science are filled with theory courses that are never used by the vast majority of professional software engineers. Caplan even takes aim high school education, arguing that large chunks of class time are devoted to coursework which only improves job performance in very rare occupations.

Yet there is also a vast empirical literature that analyses the effect of education on wages, and at first glance, it is not kind to Caplan’s signaling model. For example, we might ask if the estimated extra earnings of more educated people (called the “wage premium” in the literature) is confounded by the fact that they also tend to have traits like higher intelligence. David Card, an economist at UC Berkeley, reviewed the literature and found that the bias in the estimate was pretty small. His most convincing evidence looks at the earning difference of identical twins with different levels of education, where the ability bias only explains about 10% of the wage difference. So the rest of the premium must be explained by skills and knowledge, right?

A shallow read of the literature might suggest so, and that education raises human capital by making workers more productive. But the virtue of The Case Against Education is that Caplan synthesizes many lines of research that approach the question with different methods. By showing that signaling is the only model consistent with all the convergent facts, his conclusion is more robust than any that comes from a thin slice of the evidence. Aside from the ubiquity of useless education, he looks at three lines of research most consistent with the signaling model.

First, he looks at how much learning students forget over time. People who take a foreign language or geometry class forget more than half of what they learned within 5 years (though the more math they took, the more they retained). Using the National Assessment of Adult Literacy survey, he shows that only about half of high school graduates achieve “intermediate” or “proficient” mastery of basic quantitative questions (an example of a task of this level is calculating the total cost of ordering specific office supplies from a catalog). Despite most high school graduates taking several years worth of science courses, less than a third know that atoms are bigger than electrons. All this leads Caplan to ask: “Why do students rejoice when the teacher cancels class?” A human capital model where the “capital” is an accumulation of classroom learning is difficult to square with these celebrations.

What if students forget the specifics but learned how to learn and think critically? Here too the evidence is shockingly bad for the human capitalist camp. In quantitative courses, students diligently learn how to solve the problems that appear in their homework sets and tests, but their ability to use this knowledge correctly is highly sensitive to contextual clues. According to one survey, just 28% of students who completed a mechanics course could identify the number of forces acting on a coin midair after it is tossed. There is strong evidence from meta-analysis that years of education raises IQ by 1 to 5 points a year. But an IQ score is just a proxy for the latent g factor, or “genuine” intelligence as Caplan calls it. It may be that students’ IQ scores go up because education trains them to answer the kinds of questions on IQ tests, while the g factor remains the same. Some research suggests this to be the case, and it is certainly consistent with the finding that improvement on cognitive training tasks does not transfer over to other tasks.

There are other ways that more schooling could make better workers. A good education could boost “non-cognitive skills” by making students more extroverted and agreeable — that is, they’d be more socialized for white collar work. Another possible channel is that education gives people access to better jobs with more skilled peers, whose combined effect might otherwise be mistakenly attributed to the schooling itself. But these are not what education advocates typically point to in making their case for education.

Most of the rewards of education come in the final year

Caplan’s second (and strongest) line of evidence of signaling are “sheepskin effects”: the tendency for the bulk of the rewards of education to come in the final year. (The name comes from the fact that old diplomas used to be made with sheepskin.) In the human capital model, returns should be fairly linear and steady within classes of degrees, since a high school or college senior takes about the same course load as a freshman. A steady increase in human capital should lead to steady increases in wages. But surveying ten studies, Caplan finds that for 9th through 11th grade, each extra year of education raises wages only by about 4%, while finishing the 12th grade raises wages by 16%. Similarly, each of the first three years of college only raise wages by about 6%, while the last year raises them by 30%.

The results are more consistent with a model where students who fail to finish their degree signal a lack of work ethic, conscientiousness, or some other set of traits employers want to avoid. Alternatively, it represents a bias in the kinds of people who drop out, but Caplan cites studies that cast doubt on this possibility.

Last, Caplan looks at the effect of increased years of education on national income. If signaling explains the bulk of the education premium, then more degrees mostly just means inflating away the relative significance of credentials. What we would expect if this was true is that the national return on education would be lower than the return to the individual. Caplan reviews the evidence and finds consistently that an extra year of national education brings a “puny” 1.3% in extra income to a nation (though there are exceptions in this line of research, some careful work finds national returns can exceed private returns under certain conditions). The implication here is that the gains from education are mostly zero-sum, where credentials help educated workers at the expense of others rather than adding much to the economy as a whole.

This arms race for educational credentials in most apparent in Taiwan and South Korea where college attainment has exploded in recent decades. Thirty years ago, about 20% of South Koreans had some tertiary education; today about 70% of 25-34 year olds do. Rather than unleashing extraordinary growth as a human capital model would predict, the results have been devastating to lower skilled Koreans who thought college was their ticket to a better life:

Seongho Lee, a professor of education at Chung-Ang University, criticizes what he calls “college education inflation.” Not all students are suited for college, he says, and across institutions, their experience can be inconsistent. “It’s not higher education anymore,” he says. “It’s just an extension of high school.” And subpar institutions leave graduates ill prepared for the job market.

A 2013 study by McKinsey Global Institute, the economic-research arm of the international consulting firm, found that lifetime earnings for graduates of Korean private colleges were less than for workers with just a high-school diploma. In recent years, the unemployment rate for new graduates has topped 30 percent.

Equally convincing is research that looks at the effect on students when the number of years to achieve an equivalent credential is suddenly reduced or increased for everyone. For example, in the German state of Saxony-Anhalt, the duration of secondary school was reduced by a year. Women’s wages went up and men’s went down only by 2-4%. The opposite of this experiment occurred in China, which added a year of schooling to achieve the same credentials in the 1980s. Economists found only a 2% increase in wages from this change. There are also well-designed studies with the opposite conclusion in more limited contexts: Colombian economics students whose post-university wages dropped significantly after their university eliminated some rigorous quantitative courses as a requirement for graduation.

Policy Implications

The signaling model gives us a fresh perspective on the rapid rise in the cost of university tuition, which have tripled in price over the last few decades (though it is less severe than it looks, since many students don’t pay the full cost). This rise is sometimes blamed on Baumol’s Cost Disease, a phenomenon where salaries of workers who do not become more productive over time still go up because employers are in competition with industries whose workers are becoming more productive. The problem with this characterization is that professors’ salaries have mostly stagnated at the same time, while the number of administrators — who are not so central to building students’ human capital — has exploded. According to the best research on the topic, the rise in tuition is most related to the rise in the college wage premium and availability of student loans. If true, a free college for all plan might just allow university administrators to capture a substantial portion of the subsidies.

But Caplan is not just content to end the gravy train for useless administrative bloat. He gives a series of policy suggestions. First: remove from graduation requirements “useless” school subjects. Second, remove subsidies for education so that their unsubsidized price greatly reduces the supply of students. He even toys with the idea of taxing education, though he dismisses out of hand on libertarian concerns. His most plausible proposal is to vastly increase enrollment in vocational training programs.

Even for those of us convinced by his empirical arguments about signaling, these policy suggestions are unsatisfying and scary because we have no model of what a developed country without useless coursework and education subsidies looks like. In Switzerland, with its extensive vocational training programs, about 30% of young people still graduate from university. There is some evidence that education accelerated the industrialization process, and without a counter-example, it is not hard to imagine that a less educated population might miss out on future waves of innovation.

Thanks to Caplan’s excellent point that education signals conformity and conscientiousness, not just intelligence, we know what a replacement for the current model won’t look like: a decentralized system of learning with certification tests. This is the hope of many autodidacts who dislike the gatekeeping power universities have over us. But it won’t work in the current equilibrium: these certificates might signal social dysfunction, just like GEDs (General Equivalency Diplomas) are inferior replacements to high school diplomas. One exception is a field like software engineering, where students could put up examples of their code on Github and demonstrate their skills quickly in a technical interview (and where traits like conformity are less important.) In this case, a “teacherless university” is possible, but it is likely impossible to scale to all other fields.

The most politically viable route to defunding higher education arises from the culture wars. Thanks to the rising level of political extremism and hostility to political diversity in the academy, Republican support for these institutions has plummeted. The leftist commentator Freddie deBoer has written: “I am increasingly convinced that a mass defunding of public higher education is coming to an unprecedented degree and at an unprecedented scale…the monsters are coming, and I am afraid.” He might be right, but if The Case Against Education is to be believed, we have a lot less to lose than deBoer thinks.

I haven't read the book, but what seems to often be missing from analyses like this are socialisation (that goes beyond just signalling conformity) and networking effects. Networking in particular might affect only a minority of students but is surely an important factor in Ivy League unis or Oxbridge and is one reason why I believe some people will always choose to attend uni in person even if equivalent distance education in terms of knowledge and skill delivery becomes available.

There's also the fact that undergraduate education increasingly involves a lot of hand holding compared with the past, at least if older generations are to be believed. This would agree with the claim in the article that higher education has just become an extension of high school. Standards would also have to be lowered to get a reasonable pass rate for the increased number of potentially not suited or less capable students.

[Potemkin]

Althusser pointed out back in the 1960s that the primary purpose of educational institutions is not to educate people or improve their skills, but to reproduce the existing class hierarchy from generation to generation. It does this through signalling, through exclusivity, and through indoctrination. Why is anyone surprised by these ideas 50 years later? I thought these ideas belonged to the category of 'The Bleedin Obvious' by now, but apparently not.

[Sivad]

Althusser pointed out back in the 1960s that the primary purpose of educational institutions is not to educate people or improve their skills

I doubt any system of education could make much of a difference though in terms of scholastic proficiency. You can't be dumbed down unless you're kind of dumb to begin with.

[Kaiserschmarrn]

Althusser pointed out back in the 1960s that the primary purpose of educational institutions is not to educate people or improve their skills, but to reproduce the existing class hierarchy from generation to generation. It does this through signalling, through exclusivity, and through indoctrination. Why is anyone surprised by these ideas 50 years later? I thought these ideas belonged to the category of 'The Bleedin Obvious' by now, but apparently not.

It's hard to argue that tertiary education is exclusive and perpetuates existing hierarchies when e.g. 70% in South Korea go to university. IIRC it's almost 50% in Britain as well.

The networking I mentioned in the OP is closer to what you are talking about I think and is, as far as I can see, not often addressed.

[Potemkin]

I doubt any system of education could make much of a difference though in terms of scholastic proficiency. You can't be dumbed down unless you're kind of dumb to begin with.

Indeed. Though 'dumb' in this context could more accurately be called 'conformist'. After all, if you belong to a professional middle-class family, then there's a huge potential payoff for conformity. Which is why most such people tend to be conformists, of course. This has nothing to do with innate intelligence. After all, from their perspective, the smart thing to do is to allow themselves to be dumbed down. They earn more that way. Lol.

It's hard to argue that tertiary education is exclusive and perpetuates existing hierarchies when e.g. 70% in South Korea go to university. IIRC it's almost 50% in Britain as well.

The networking I mentioned in the OP is closer to what you are talking about I think and is, as far as I can see, not often addressed.

The middle-classes have been fretting about "educational inflation" since at least the 1970s - they understood what ending the social exclusivity of tertiary education would mean for their hereditary class privileges, and they didn't like it one little bit. The argument which was often used against them was that a modern economy requires a highly skilled and educated workforce. If the OP is to be believed, this counterargument was fallacious, and the middle class critics of widening access to tertiary education were correct. The signalling and social networking functions of tertiary education are more important by far than its official function of educating or training people for the workplace.

[Sivad]

Indeed. Though 'dumb' in this context could more accurately be called 'conformist'. After all, if you belong to a professional middle-class family, then there's a huge potential payoff for conformity. Which is why most such people tend to be conformists, of course. This has nothing to do with innate intelligence. After all, from their perspective, the smart thing to do is to allow themselves to be dumbed down. They earn more that way. Lol.

Reminds me of that old Upton Sinclair quote: "It's difficult to get a man to understand something, when his salary depends upon his not understanding it!”

But I think that's only due to the fact that most people are innately conformist. We don't tend to value independence and originality, if we did, conformity wouldn't pay off and we'd be living in a very different world. We evolved in a world where conformity and group cohesion was an absolute necessity for survival so it's no surprise that conformity comes so naturally to so many of us.

[Kaiserschmarrn]

The middle-classes have been fretting about "educational inflation" since at least the 1970s - they understood what ending the social exclusivity of tertiary education would mean for their hereditary class privileges, and they didn't like it one little bit. The argument which was often used against them was that a modern economy requires a highly skilled and educated workforce. If the OP is to be believed, this counterargument was fallacious, and the middle class critics of widening access to tertiary education were correct. The signalling and social networking functions of tertiary education are more important by far than its official function of educating or training people for the workplace.

Point taken, but today's signalling, with the exception of the exclusive universities, is quite different. It's essentially a very expensive and long selection process to tell employers that an individual is probably reasonably intelligent and conscientious.

As somebody coming from a country which has always had comparatively low rates of uni grads but with few problems producing a skilled and educated workforce, I've never found the counterargument persuasive.

[One Degree]

I doubt any system of education could make much of a difference though in terms of scholastic proficiency. You can't be dumbed down unless you're kind of dumb to begin with.

We all love to show others how dumb they are. People are dumbed down by being constantly told they are stupid in subtle ways. This is a demand for conformity, but it is also simply a human flaw. For the vast majority, this is done by those closest to them who don’t understand they are doing it. Except for the rare instructor, students are basically graded on their ability not to disagree with the instruction. I wish everyone could experience what I did, when I convinced students they were being lied to about being stupid. The improvement was amazing.
Socialization does not require educational institutions. I have always found it amusing so many accept this obvious fallacy. Young people seek out socialization, therefore someone will see the advantage of offering it. A city skating rink offered the same opportunity for many years for example.

[MistyTiger]

Higher education is important. It seems though that you don't always need college but for me, I wouldn't have my current job without it.

I just saw on the news that kids who learn welding can make around 45-50 grand a year in my area if they learn welding in high school and get their welder certification, which is pretty good. I don't even make 40 grand a year.

The best way to prevent stupidity is by being raised by smart parents and the smart parents actually taking time to teach their kids to be smart and the kids are willing to learn.

[Potemkin]

Point taken, but today's signalling, with the exception of the exclusive universities, is quite different. It's essentially a very expensive and long selection process to tell employers that an individual is probably reasonably intelligent and conscientious.

Agreed, but that is only true if you assume that the primary purpose of tertiary education is to educate people or train them for the workplace. This assumption is not correct, and was never correct.

As somebody coming from a country which has always had comparatively low rates of uni grads but with few problems producing a skilled and educated workforce, I've never found the counterargument persuasive.

Neither have I, but that's because I don't accept the implicit assumption of most of the people advancing that counterargument that the primary purpose of tertiary education is to educate or train people. They missed the point which the upper class and middle class 'stick-in-the-muds' have always understood - that the primary purpose of tertiary education is to reproduce the existing class hierarchy from generation to generation; in other words, to safeguard the hereditary class privileges of the elite. The universities were the guardians of privilege. If you want to educate or train people for the workplace, then the German way of doing things is probably the best - forget about university for the majority, and focus on vocational training for the working class. The Anglosphere didn't do this because, you know, who cares about the welfare or educational status of the working classes? Teach them how to read and write, and you're done. We can always import trained workers from abroad if our native ones are only good for pulling levers or pressing buttons.

[Hong Wu]

Seems like they're deliberately wasting people's time while setting up a false dichotomy between useless education and no education.

[Kaiserschmarrn]

Agreed, but that is only true if you assume that the primary purpose of tertiary education is to educate people or train them for the workplace. This assumption is not correct, and was never correct.

I don't follow. This is how it has been used in practice. It's not that people come out of university fully educated and trained, but graduation signals that it's likely they can be educated and trained for the job the employer wants them to do. Of course, if you have almost three quarters of people graduating, this is a less useful signal and many uni courses become more of an extension of high school.

Neither have I, but that's because I don't accept the implicit assumption of most of the people advancing that counterargument that the primary purpose of tertiary education is to educate or train people. They missed the point which the upper class and middle class 'stick-in-the-muds' have always understood - that the primary purpose of tertiary education is to reproduce the existing class hierarchy from generation to generation; in other words, to safeguard the hereditary class privileges of the elite. The universities were the guardians of privilege.

Both sides are wrong when it comes to how the university system has been working over the last few decades. While the main effect is still signalling, the argument that it helps preserve class privilege can only be made with respect to the most exclusive universities. If you look at the whole tertiary education system, this is no longer its main purpose.

If you want to educate or train people for the workplace, then the German way of doing things is probably the best - forget about university for the majority, and focus on vocational training for the working class. The Anglosphere didn't do this because, you know, who cares about the welfare or educational status of the working classes? Teach them how to read and write, and you're done. We can always import trained workers from abroad if our native ones are only good for pulling levers or pressing buttons.

Agreed, it amounts to outsourcing the selection of a suitable candidate and to be fair in many cases maybe the first year of on the job training.

As for the Anglosphere, if up to 50% of people go to university there will invariably be quite a lot of working class people among them. What we are seeing is not so much a cynical ploy to keep the working class down, but a misguided policy that assumes anybody can be taught anything if we only throw enough resources at the education system.

[Zamuel]

Seems like they're deliberately wasting people's time while setting up a false dichotomy between useless education and no education.

Yes … you're right.

Educated people are hard to manage. They're more interested in their own ideas than yours. I grew up in Iowa, (where the "standards" tests originated.) When WWII ended, Iowa dedicated itself to developing the finest educational system in the world, and they succeeded. I was introduced to algebra and geometry in the 4th grade and mastered them in the 5th. I began Latin studies in the 7th grade, calculus in the 9th. In my Jr, year at High school I was working on wave mechanics. All this In Public Schools.

I was lucky … A few years after I graduated they "Switched" educational priorities and eliminated both advanced subjects and the teachers who taught them. Enlightened Administration was replaced with a draconian organization that made teachers into overseers and emphasized "Discipline." Education everywhere has gone downhill since.

The system I was educated under worked because in 2nd and 3rd grade, students were taught to "THINK," to use their minds, to solve problems, to research, investigate, and discover. They don't do that any more. Students are taught to obey, accept, and repress.

The value of REAL education is inestimable. Our children are being taught to eat the fish provided, and not to dare try fishing on their own.

Zam

[Decky]

It's hard to argue that tertiary education is exclusive and perpetuates existing hierarchies when e.g. 70% in South Korea go to university. IIRC it's almost 50% in Britain as well.

Universities are not equal. In the UK you have 1)Oxbridge 2) Redbricks 3) The shit ones (the vast majority).

University is definitely part of perpetuating the UK's system of social stratification. Attending university is not some binary thing where the only import thing is the divide between those with degrees and those without.

[Saeko]

Speaking of useless shit, let's get rid of hospitals because even if you're cured of whatever ails you, you still have the same chance of getting sick again as you did before. And on top of that, you're still going to die anyway, so why even bother?

[Zagadka]

Higher education is important.

I find that vocational education is more important for most people. More students should get vocational education at community colleges than enrolling in costly universities, racking up debt, and being untrained.

[Kaiserschmarrn]

Universities are not equal. In the UK you have 1)Oxbridge 2) Redbricks 3) The shit ones (the vast majority).

University is definitely part of perpetuating the UK's system of social stratification. Attending university is not some binary thing where the only import thing is the divide between those with degrees and those without.

Agreed and I did mention the ivy league unis and Oxbridge as examples where to this day the future elite get to know each other and is socialised.

I think it's fair to say that at one point the opening up of tertiary education had thoroughly positive consequences, but the idea back then was to do this based on merit where merit was supposed to be measured objectively. In the UK this selection process started in school and if I remember correctly, @Potemkin mentioned that he was able to attend uni based on being able to get into grammar school. The massive expansion of universities, number of students and which professions required a degree is quite a different issue in my view.

It also shouldn't surprise anyone that those who relied on exclusivity were trying everything to keep it that way. One of the problems today is that they manage to do this in part under the guise of increasing the number of minority students, by arguing a holistic approach to admission is needed which, as it happens, often favours the elite. See also the documents that were released as part of the current Harvard law suit by an Asian advocacy group for an example of how ridiculous this admission process actually is.