In brief: there are strong reasons to believe that much of higher education and even large parts of school serve not to teach but to test students. An English major doesn't lead to higher pay because it makes one a substantially better worker. It does so because achieving it signals three primary traits to the potential employer: intelligence, conscientiousness, and conformity.

This isn't education's only function. Some learning undeniably still takes place. But in Caplan's estimation signalling is probably about 80% of the payoff.

This picture is supported by a large number of observations:

- Why do even top schools like Harvard make little to no effort to prevent non-students from attending lectures?

- Why do students cheer when class is canceled?

- Why does ratemyprofessor.com have the measures "overall quality" and "difficulty" but not an explicit "informativeness" measure and why is high difficulty considered bad?

- Why do students cheat on tests and why do teachers make such a large effort to prevent it?

- Why do employers rarely show concern that you might've forgotten what you learned?

- Why do statistics indicate that graduation year has a much greater effect on wages than all the other years?

All these points contradict the "education = learning" viewpoint but are straightforwardly explained with the signalling model.

And once you acknowledge the importance of signalling it puts statements such as

> And, a good education pays off even for less gifted people. Their lives are better, they contribute more to the economy and less to crime.

into a completely new perspective. As Caplan writes:

> The classic example: You want a better view at a concert. What can you do? Stand up. Individually, standing works. What happens, though, if everyone copies you? Can everyone see better by standing? No way. Popular support for education subsidies rests on the same fallacy. The person who gets more education, gets a better job. It works; you see it plainly. Yet it does not follow that if everyone gets more education, everyone gets a better job. In the signaling model, subsidizing everyone’s schooling to improve our jobs is like urging everyone to stand up at a concert to improve our views. Both are “smart for one, dumb for all.”