Signals, not Learning: A review of Bryan Caplan’s The Case Against Education

April 2018

“We don’t need no education”
—Pink Floyd, “Another Brick in the Wall, Part 2”

As an undergraduate, I always crammed for exams and rarely remembered anything I may have “learned” beyond the next week. I certainly did not remember much after a several months, not to mention after a year or two.

More than four decades of teaching at the university level convince me that my experiences are no different from those of most students. This observation is at the heart of Bryan Caplan’s new book, The Case Against Education: Why the Education System Is a Waste of Time and Money(Princeton University Press, 2018).

The major point of Caplan’s study is that high school diplomas and undergraduate degrees generally do not show that the students actually learned and retained much that will be useful after graduation (those who go on to teach are, to some extent, exceptions). Rather, completion of high school or the BA signals a student’s ability, intelligence, work ethic, and willingness to perform to satisfy teachers’ requirements.

Caplan reviews the evidence that even after taking account of ability, intelligence, and a host of other variables, students who complete high school on average earn more than those who don’t, and those who complete a BA earn more than those who don’t. Completion of a programme clearly is valuable to potential employers. The puzzle is: why do those students earn more even though they don’t remember, much less use, most or any of what they studied?

Caplan’s answer: The fact that they completed high school or received an undergraduate degree is worth so much because completion sends valuable signals, i.e. conveys valuable information about students’ character traits and general abilities, despite telling very little about specific skills and learning.

I have been reading these ideas from Brian Caplan for nearly a decade, as he has posted them at the blog Econlog. I was so persuaded by them that several years ago I gave a public lecture at The University of Regina “I Didn’t Learn a Thing as an Undergraduate.” in which I summarized his ideas.

Caplan questions why we need so much education if the primary purpose of education is to certify and to generate signals, but not to foster learning. He points to all the language courses students are forced to take but forget quickly, to the required history courses despite which so many people know so little basic history, and even to the math and science courses that so many students take in high school only to signal their suitability for university. If the primary reason students take these courses is to signal character traits, not skills or knowledge, then it is wasteful. Surely students would be better off if they spent more time learning skills and less time signaling.

Let’s face it: you don’t need a BA for many, maybe even most, of the jobs that require one, but employers require BAs because students with a BA signal that they generally have more ability, better work ethics, and greater willingness to conform to the employers’ work standards.

While that might be correct overall, it likely does not hold for any given individual. A reasonable student can rightly ask, “How can I send a reliable message to potential employers and universities about my abilities and personality if not by completing my education programme? Doing so is next to impossible.”

As a result, the student quite sensibly decides to signal quality by getting more education. And so do millions of other students, all contributing to a signaling war with each one trying to send a signal that they are better-suited — i.e. better credentialed — than other job or college applicants.

Caplan’s conclusion is clear: all this signaling is costly and wasteful. It is a negative sum game in that everyone devotes more and more scarce resources (time and money) to advancing themselves and/or their progeny in the credential war, trying to create more impressive signals.

High school students take courses that signal their willingness and ability to submit to the rigours of college or university coursework. They also join extra-curricular activities to prove they are well-rounded; they participate in or even start their own charity fund-raisers to show they care about others; and they vie for “leadership” positions in local groups to show their leadership potential. Many sign up for SAT training courses or buy books with sample questions and guidance on how to improve their SAT scores. These are all attempts to signal. They have little to do with producing what economists call “human capital”— i.e. skills and useful knowledge.

In many ways, signals are good things. They aren’t perfect, but they are short-hand ways of conveying generally useful information. When someone completes high school, they signal they have the mental ability to grasp the basic material, and they also have the personal ability to withstand boredom and to jump through hoops, an important signal to potential employers. Further, if they get high enough grades and high enough SATs, they signal they probably have the mental ability and the personal characteristics to finish an undergraduate degree.

Similarly, completing a BA tells potential employers the student has even more ability intellectually, more stamina, and more willingness to conform.

Caplan suggests that from a societal perspective there must be a more efficient way to generate these signals. Having people spend, say, 16-17 years in school to create these signals is a very expensive way to do it.

Indeed, some of his critics have argued that if there were a more efficient way to acquire this information, employers and intermediaries would have developed mechanisms for doing so by now. Caplan’s first response to this is weak: he responds that the signals from education are so strongly embedded in our culture and psyches that we don’t trust alternative signals. If that is the only reason, I expect things will change, and fairly quickly over the next few decades.

However, his second response has more strength: we have had a credential explosion as students (encouraged by their parents and by educators) scramble to create better signals to make themselves more attractive than others to college admission officers and employers. Caplan argues that these signals are relative, in comparison with the applicant pools, and not absolute. If they were measured according to some absolute scale, then a high school diploma today would signal the same thing it did a generation ago (assuming high school standards haven’t changed much; however, see below). But when an employer is faced with a job applicant with stronger signals, like a BA, then the one with the BA tends to win.

According to Caplan, there are two big problems with this signaling war that is set off when we use schooling to signal character traits: War is a negative sum game, and the education signaling war induces grade inflation.

The signaling war is a negative sum game because it is to each student’s advantage to get a high school diploma (or to complete a BA), but only because they are competing with other students who are also spending time and money on the race to acquire better credentials. Caplan argues that using schooling to signal abilities and character traits has no social benefits and hence generates far too much waste, with students taking courses they don’t want and don’t need, only to create acceptable signals.

I like Caplan’s case that signaling is a major part of schooling and education. But there are some positive aspects to this signaling war that Caplan either ignores or dismisses too easily. The longer students are in school, the more they tend to learn and practice good work habits along with conformity to teachers’ and professors’ assignments. Caplan’s response is that they can learn and demonstrate these same skills on the job if they go into the workforce; they don’t need to spend so much unproductive time in school to learn and demonstrate these skills. My sense is that the two are not the same; it takes a long time and repeated exposure to learn how to tolerate boredom, to learn what types of conformity and non-conformity are acceptable and to whom, and to learn to set longer term goals and work toward them.

The credential war has another pernicious effect in addition to being negative sum: it induces grade inflation. High school teachers feel pressure to ease up just a bit so students can receive a diploma or so that those who might otherwise be borderline are admitted to college or university. Similarly university professors are under pressure from students to be lenient so the students can get into professional schools. And department chairs put pressure on professors to ease up so the students don’t migrate to other departments to take easier courses to raise their grade point averages.

If students are increasingly studying less, as seems to be the case, and receiving higher grades, then the signals are being diluted. To that extent, students who want to impress employers and admissions officers need to generate additional and stronger signals. Many will choose to further their studies. Others will look for other signals. For example, students seeking admission to top business school programmes now are expected to do something to demonstrate their entrepreneurial drive and talents such as starting a business or organizing a fund-raising campaign. When I talk with these students, it is often the case that they don’t really want to do these things, but “it’ll look good on the application forms”; i.e. it’s part of the signaling war as they try to distinguish themselves from all the other applicants who have good, inflated grades.

Even if you are persuaded by Caplan’s arguments that schooling is mostly signaling and doesn’t really contribute much to the skills and talents of most students, you may be less persuaded by his recommendation for dealing with the high costs of signaling wars.

His solution is to eliminate taxpayer support of education. As a life-long educator who has enjoyed feeding at the trough of the public fisc, I cringe at this recommendation. I am especially reluctant to endorse it for grades K-12. At the university level, though, it makes sense to at least consider reducing the sizes of the government subsidies. I realize my experiences may not be generalizable, but they probably are: there are far too many students in university who will learn very little and use next to nothing of what they were taught. They are there, in part, because governments subsidize their participation in the credentialing wars.

Caplan’s book is an easy read. He writes with serious humour, if that makes sense. I have smiley faces in the margins all through the book. My major complaint is that the publisher chose to use endnotes instead footnotes, meaning I was constantly flipping back and forth to check the footnotes, many of which are well-worth the effort.

I certainly urge those who might be interested in Caplan’s views to read the introductory material in Chapter One. After that, Chapters Four and Five become tedious — necessary to bolster his case, but tedious, as he develops and carefully references his case numerically. Also his conversations near the end of the book are interesting. But for those who want the Readers’ Digest version of the book, I highly recommend Caplan’s column in the Los Angeles Times, which presents his case extremely well.