The Case against Education

Why the Education System Is a Waste of Time and Money

Bryan Caplan

• Publisher: Princeton University Press
• Year: 2018
• ISBN:
  9781400889327
• Topic: Education
• Subtopic: Higher Education

Why we need to stop wasting public funds on education

Despite being immensely popular--and immensely lucrative—education is grossly overrated. In this explosive book, Bryan Caplan argues that the primary function of education is not to enhance students' skill but to certify their intelligence, work ethic, and conformity—in other words, to signal the qualities of a good employee. Learn why students hunt for easy As and casually forget most of what they learn after the final exam, why decades of growing access to education have not resulted in better jobs for the average worker but instead in runaway credential inflation, how employers reward workers for costly schooling they rarely if ever use, and why cutting education spending is the best remedy.

Caplan draws on the latest social science to show how the labor market values grades over knowledge, and why the more education your rivals have, the more you need to impress employers. He explains why graduation is our society's top conformity signal, and why even the most useless degrees can certify employability. He advocates two major policy responses. The first is educational austerity. Government needs to sharply cut education funding to curb this wasteful rat race. The second is more vocational education, because practical skills are more socially valuable than teaching students how to outshine their peers.

Romantic notions about education being "good for the soul" must yield to careful research and common sense— The Case against Education points the way.

CHAPTER 1

The Magic of Education

Don’t tell fish stories where the people know you; but particularly, don’t tell them where they know the fish.

—Mark Twain

For an economics professor I have broad interests.1 Economics aside, I read widely in philosophy, political science, history, psychology, and education. But what do I really know how to do?

In all honesty, not much. In junior high and high school, I worked a few hours a week manually collating sections of the Los Angeles Times. In 1990, I had a summer data-entry job with a homebuilder. I haven’t had a real job since. People pay me to lecture, write, and think my thoughts. These are virtually my only marketable skills. I’m hardly unique. The stereotype of the head-in-the-clouds Ivory Tower academic is funny because it’s true.

The Ivory Tower routinely ignores the real world. Strangely, though, the disinterest is not mutual. Employers care deeply about professors’ opinions. Not, of course, our opinions about epistemology or immigration. But employers throughout the economy defer to teachers’ opinions when they decide whom to interview, whom to hire, and how much to pay them. Students with straight As from top schools write their own tickets. A single F in a required course prevents graduation—closing the door to most well-paid jobs.

Every now and then, foolhardy critics of the education industry flatly deny the financial benefits. Since all statistics are against them, they turn to anecdotes. “I know a girl who finished her B.A. four years ago, but still works at Starbucks.” “My son has a Ph.D. in philosophy—and he drives a cab.” “I can’t get a job with my M.F.A. in puppetry.” While such things do happen, the world is vast. The key question is whether anecdotes about failed investments in education are the exception or the rule.

Statistics give a clear answer: as a rule, education pays. High school graduates earn more than dropouts, college grads earn more than high school grads, and holders of advanced degrees do better still.2 Enduring another year of school will, on average, get you a raise for the rest of your career. What kind of raise? A standard figure is about 10%. Better-educated workers also enjoy higher noncash benefits, better quality of life, and lower unemployment.3 Apparent rewards shrink after various statistical corrections; we’ll see how later on. Still, no matter what corrections you make, schooling pays in the labor market.

Otherworldly Education

Most actual job skills are acquired informally through on-the-job training after a worker finds an entry job and a position on the associated promotional ladder.

—Lester Thurow, “Education and Economic Equality”4

The key question isn’t whether employers care a lot about grades and diplomas, but why. The simple, popular answer is that schools teach their students useful job skills. Low grades, no diploma, few skills. This simple, popular answer is not utterly wrong. Literacy and numeracy are crucial in most occupations. Yet the education-as-skills story—better known to social scientists as “human capital theory”—dodges puzzling questions.

First and foremost: from kindergarten on, students spend thousands of hours studying subjects irrelevant to the modern labor market. How can this be? Why do English classes focus on literature and poetry instead of business and technical writing? Why do advanced math classes bother with proofs almost no student can follow? When will the typical student use history? Trigonometry? Art? Music? Physics? “Physical Education”? Spanish? French? Latin! (High schools still teach it, believe it or not.)5 The class clown who snarks, “What does this have to do with real life?,” is on to something.

The disconnect between curriculum and job market has a banal explanation: educators teach what they know—and most have as little firsthand knowledge of the modern workplace as I do. Yet this merely amplifies the puzzle. If schools boost students’ income by teaching useful job skills, why do they entrust students’ education to people so detached from the real world? How are educators supposed to foster our students’ ability to do the countless jobs we can’t do ourselves?

Anyone who thinks I exaggerate the gap between the skills students learn and the skills workers use can look at the current graduation requirements for my alma mater, Granada Hills High School (now Granada Hills Charter High School).6 Students need four years of English, two years of algebra, two years of the same foreign language, two years of physical education, and a year in each of the following: geometry, biology, physical science, world history, American history, economics/government, and a visual or performing art. Students also have to complete ten to fourteen elective classes. If you fail more than two classes, you do not graduate.7

Passing all this coursework serves one practical function: college entry. Granada’s high school graduation requirements almost perfectly match admission requirements for the University of California and California State University systems.8 But what additional practical function do these requirements serve? For college-bound students, the honest answer is “not much”; few college graduates use higher mathematics, foreign languages, history, or the arts on the job.9 For students who aren’t college bound, the honest answer is “virtually none.” If you don’t go to college, your job almost certainly won’t require knowledge of geometry, French, world history, or drama.

Graduation requirements for the University of California, Berkeley, where I earned my bachelor’s degree, are similarly otherworldly. Suppose you’re in the College of Letters and Science. To graduate, you need a total of 120 credits—roughly four courses a semester for four years. You have to pass your “Breadth Requirements”—one course in each of the following: Arts and Literature, Biological Science, Historical Studies, International Studies, Philosophy and Values, Physical Science, and Social and Behavioral Sciences.10 You also have to complete your major requirements. Suppose you major in economics, widely seen as a “practical,” “realistic” subject. Graduates need introductory economics, statistics, intermediate microeconomics, intermediate macroeconomics, econometrics, five upper-division courses, and a year of calculus.11 While this coursework is decent preparation for econ graduate school, students are likely to use only two—statistics and econometrics—in a nonacademic job. Even that shouldn’t be overstated: statistics and econometrics courses at elite colleges emphasize mathematical proofs, not hands-on statistical training.12

Permanent residents of the Ivory Tower often congratulate themselves for broadening students’ horizons. For the most part, however, “broaden” means “expose students to yet another subject they’ll never use in real life.” Put yourself in the shoes of a Martian sociologist. Your mission: given our curriculum, make an educated guess about what our economy looks like. The Martian would plausibly work backward from the premise that the curriculum prepares students to be productive adults. Since students study reading, writing, and math, you would correctly infer that the modern economy requires literacy and numeracy. So far, so good.

From then on, however, the Martian would leap from one erroneous inference to another. Students spend years studying foreign languages, so there must be lots of translators. Teachers emphasize classic literature and poetry. A thriving market in literary criticism is the logical explanation. Every student has to take algebra and geometry. The Martian sociologist will conclude the typical worker occasionally solves quadratic equations and checks triangles for congruence. While we can picture an economy that fits our curriculum like a glove, that economy is out of this world.

If education boosts income by improving students’ skills, we shouldn’t be puzzled merely by the impractical subjects students have to study. We should be equally puzzled by the eminently practical subjects they don’t have to study. Why don’t educators familiarize students with compensation and job satisfaction in common occupations? Strategies for breaking into various industries? Sectors with rapidly changing employment? Why don’t schools make students spend a full year learning how to write a resume or affect a can-do attitude? Dire sins of omission.

The puzzle isn’t merely the weak tie between curriculum and labor market. The puzzle is the weak tie between curriculum and labor market combined with the strong tie between educational success and professional success. The way our education system transforms students into paid workers seems like magic. Governments delegate vast power to a caste of Ivory Tower academics. The caste wields its power as expected: Every child has to study teachers’ pet subjects. Educators then rank students on their mastery of the material. Students rapidly forget most of what they learn because “they’ll never need to know it again.” Employers are free to discount or disregard the Ivory Tower’s verdicts. Yet they use academic track records to decide whom to hire and how much to pay.

The process seems even more magical when you’re one of the wizards. I go to class and talk to students about my exotic interests: everything from the market for marriage, to the economics of the Mafia, to the self-interested voter hypothesis. At the end of the semester, I test their knowledge. As far as I can tell, the only marketable skill I teach is “how to be an economics professor.” Yet employers seemingly disagree.

Anyone who’s not dumbstruck should be. Do students need to understand the market for marriage, the economics of the Mafia, or the self-interested voter hypothesis to be a competent manager, banker, or salesman? No. But because I decide these topics are worth teaching, employers decide students who fail my class aren’t worth interviewing. Abracadabra.

Unlike many magic tricks, this is not a case of “the hand is quicker than the eye.” The mystery doesn’t go away when you review the process in slow motion:

• Step 1: I talk about topics I find thought-provoking.
• Step 2: Students learn something about the topics I cover.
• Step 3: Magic?
• Step 4: My students’ prospects in management, banking, sales, etc. slightly improve.

When I train Ph.D. students to become economics professors, there’s no magic. They want to do my job; I show them how it’s done. But the vast majority of my students won’t be professors of economics. They won’t be professors of anything. How then do my classes make my students more employable? I can’t teach what I don’t know, and I don’t know how to do the jobs most of my students are going to have. Few professors do.

Making Magic Pay

Magic isn’t real. There has to be a logical explanation for the effect of Ivory Tower achievement on Real World success. And here it is: despite the chasm between what students learn and what workers do, academic success is a strong signal of worker productivity. The labor market doesn’t pay you for the useless subjects you master; it pays you for the preexisting traits you reveal by mastering them.

Certifying preexisting skills is so easy that, despite my life-long sequestration in the Ivory Tower, I know how to do it. How? By acting like a typical professor. I lecture about my nerdy obsessions. I make my students do some homework and take some tests. When the semester ends, I grade them based on their mastery of the material. Absent a miracle, my students will never apply the economics of the Mafia on the job. No matter. As long as the right stuff to succeed in my class overlaps with the right stuff to succeed on the job, employers are wise to prefer my A students to my F students.

I naturally have to share influence with my fellow educators. I can tip my students’ Grade Point Average by only a decimal point. Still, mild influence adds up; I’ve taught thousands of students over the years. And my condemnation is devastating. A single F can derail graduation—and prompt employers to trash your resume. Students who value worldly success therefore strive to impress educators with their brilliance and industry—or at least avoid appalling us with their stupidity and sloth. Practical relevance makes little difference: you won’t use Shakespeare on the job, but without the right credentials, the job you crave will forever elude you.

Basics of Signaling

Signaling is no fringe idea. Michael Spence, Kenneth Arrow, Joseph Stiglitz, Thomas Schelling, and Edmund Phelps—all Nobel laureates in economics—made seminal contributions.13 The Nobel committee hailed Michael Spence’s work on signaling as his prize-winning discovery and added:

An important example is education as a signal of high individual productivity in the labor market. It is not necessary for education to have intrinsic value. Costly investment in education as such signals high ability.14

Signaling models have three basic elements. First, there must be different types of people. Types could differ in intelligence, conscientiousness, conformity, whatever. Second, an individual’s type must be nonobvious. You can’t discover a person’s true work ethic with a glance. You certainly can’t ask, “How good is your work ethic?” and expect candor. Third, types must visibly differ on average; in technical terms, “send a different signal.” Deviations from average are okay. A signal doesn’t have to be definitive, just better than nothing.15...