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Comment by nosefurhairdo | Hacker News Reader

On signaling != waste:

Of course signaling is not wasteful. Caplan, like any good economist, would readily agree (prices as signals is a cornerstone in microeconomic theory). Employers need a mechanism to identify who is worth hiring, which for entry level jobs is typically the college degree. The problem is that a college degree is an extraordinarily expensive signaling device to obtain, and in a population saturated with college degrees they become less meaningful, and those without degrees have no chance at competing even if they would be better suited for a particular job.

To me, The Case Against Education is a prompt to identify or create more efficient signals. In regular conversation it seems like most people agree that college is too expensive and really you're just in it for the "piece of paper" at the end, yet when you formalize the arguments folks get defensive and will pontificate on the intangible value of a liberal arts education.

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Is the labor market tight enough for the signaling requirements to relax naturally? If employers struggle to hire enough entry level people who can read memos and learn basic office software, they probably won't require a generic 4 year degree. But as long as there's enough labor that employers can still be picky, I don't see why/how employers will drop that easy (if blunt) 4 year degree filtering mechanism.

The signaling value of a traditional degree will go up if fewer people acquire it, so the optimal outcome for parents anxious about their own children's future prospects is that other people's children should consider vocational education or go straight from high school into the work force.

I say this aware that many high school grads without academic inclinations are nudged toward universities by default, to their irritation and to the detriment of their more seriously academic classmates. I don't see how to fix it until/unless the labor market gets tight enough to squeak. Until then, every small move to fix the problem will raise the reward for "defecting" back toward earning a degree as a signal.

You can just make college more expensive, that should punish 'defecting' all by itself.

My favourite policy suggestion for that: make it so that student loans can be discharged in a bankruptcy like any other loan. (Or more precisely, new student loans taken on after the new policy takes effect. No retro-active loan forgiveness.)

It's my favourite policy suggestion, because it's a common populist complaint that student loans stay with you forever. So my suggestion looks like it's giving in to that populist sentiment.

What is actually does: most students have no assets just after graduation, so bankruptcy is 'free' for them. Thus lenders can't count on getting the loans repaid, and thus won't loan as freely. Cutting off the spigot of student loan money will bring down the price of education.

but the source lender is the US government, which is awful at adjusting to market economics, and would likely require legislation to slow(?) down lending. How would you convince these populists to support this (not very sneaky) legislation?

reducing money flowing into higher education industry would reduce overall education levels of the population. I don’t think you really want the population to be less educated. Go see what life is like in places with lower levels of education. College is expensive for those people. You don’t want that.

Germany, for example, has much less money flowing into education than the US. They seem plenty educated enough to me.

Germany spends roughly the same annually through post-secondary (normalized by total population) and that amounts to a higher percentage of GDP to support a lower per capita student count at all grade levels. They do have a lower population and thus lower absolute spending, but that shouldn't be relevant.

Interesting. What are your sources?

What kind of spending are you talking about? Total spending (both private and public), or just official government spending?

I agree that all comparisons should be done on a per capita basis or as a proportion of GDP.

Given that we know that there can be multiple types of intelligence and that college only tests a small fraction of those types - are you comfortable with this binary framing? That the only way to go is up (in years of education)? There's no alternate model, different framing, etc. to educating a populace outside of these two choices?

Please - let's approach this question with an open mind - there are plenty of alternative approaches worth considering just from other parts of the globe.

Why would anyone not immediately declare bankruptcy upon graduation under this model?

Because under this model nobody would make student loans.

That doesn't seem to happen in other jurisdictions where student loans are dischargable in bankruptcy.

Presumably people don't do that because having a bankruptcy on your record comes with consequences. It might even disqualify you from persuing certain careers.

Well, the point of my suggestion was to discourage student loans. Exactly as https://news.ycombinator.com/item?id=36626179 points out.

bankruptcy stays on your credit report for 7 years iirc. that's a long time to get denied (or approved with terrible terms) for credit cards, auto loans, mortgages, etc.

if you have a reasonable student loan balance and a solid job offer (maybe you got a stem degree from a public university), it would still be much better to make payments and have access to other credit.

7 years of being unable to finance a home purchase and having to pay cash or a huge down payment to get a car, but in exchange my entire college education is free?

Which is realistically a worst case scenario because there will always be someone who will try to figure out how to correctly evaluate the lending risk of people who are all equally handed free money and thus for whom the bankruptcy signal doesn't differentiate much.

And as a fresh college graduate I'm necessarily the most mobile I will likely ever be in my life, with no kids yet and maximum disposable income relative to my needs at this time of young adulthood, thus unlikely to be able or interested in looking for a settle-down home anyway for several years?

better believe I'll take that deal, or I would if I was back in that age group and stage of life.

it's only a no-brainer if you went to an expensive school or have low expectations for your career in your 20s.

total in-state tuition for a four year degree is ~$40k. that's not nothing, but at least for me, getting that wiped out in exchange for no house, driving a shitbox to work, and even getting extra scrutiny on rental applications would not have been a good start to my 20s.

if I went to a private school, wanted to be a teacher, etc, the calculus might be different.

Sounds like you have a pretty good bargain going wherever you are, because here in California as a resident, a four-year degree even at a state school like the UC is going to run 65k and that's without housing or expenses. Books, supplies, and lab materials alone can add another 12 grand to that over the course of a 4y degree. If you're going to pursue a master's then you can almost double that. And double it again if you're not a resident or are going to a private school of comparable repute.

Obviously there's the option of a less expensive State School like one of the CSUS or a Cal Poly, as well as clever short circuiting of the tuition by taking Community College equivalents where possible but if you're going to get everything forgiven at the end of college then why bother with all that.

Standardized testing is the benchmark for efficient signaling. Of course, it is in a college’s financial interest to insist that their “branded” signal is much more valuable, since a test doesn’t care how you studied for it.

A personal anecdote on this point: I enlisted in the US Navy after failing out of UIUC because I preferred to smoke weed and play video games instead of going to class. While on active duty I resumed my studies with online classes at military-friendly Strayer University, which accepted CLEP exams as credit for many lower level courses. I ended up taking like 8 different exams to take care of all my general requirements like sociology and Western civilization, each of which cost $0 thanks to military reimbursement.

> Standardized testing is the benchmark for efficient signaling.

I suppose it is indeed the benchmark, but standardized testing has mixed results.

Aircraft pilot testing is, I believe, somewhat standardized and does demonstrate that at least when you it you met some baseline level of safety.

The bar exam shows you have some baseline level of competency (as a non-lawyer who never read any law I am sure I would not pass) but I doubt it’s especially predictive as to how good a lawyer you will be.

I took the SAT and got into a bunch of schools, but I was struck by how it didn’t seem to reflect much of anything we learned in school, except some of the math (we were not given any sat prep nor encouraged to get any). Note: I know MIT says SAT is somewhat predictive as to whether you will graduate, so…?

I wonder about these full-cohort tests that control school admissions, such as in China, Korea, Japan, or France. Are the “winners” actually better in some useful way or is it simply a sorting hat that bins students into institutions with good/mediocre/bad networks?

I can tell you about the test in Spain: Ultimately it's actually testing what you learned in school, vs the SAT's IQ + Vocab proxy. Since it asks for so much, in practice it's testing for the quality of your school too, as if your classmates in high school were bad enough, or your teacher cared little about covering the material, you might not have even covered some of the questions. So in practice, some schools averaged extremely good results in some subjects even for the worst students, while in others the very best always scored badly: Imagine in the foreign language test, one school might have a teacher that could actually communicate well in English, while others didn't.

Another fun part is that it limits how much a motivated high school can do regarding unfair grading: In my year, the average grades in high school and the grades in the University test, while relatively correlated, had some very big outliers.

Do note that in Spain, more than a matter of which university you'll go to, it's also a matter of which major you'll be allowed to study. In general, high paying, low unemployment majors are basically unachievable by someone that tested badly, or had bad high school grades. So it's not a matter if you are going to the right university, but whether you can study anything you care about at all. I had friends that liked computer science, but were C students, so they had no prayer of studying CS. And also note that, even after you get into college, chances of flunking out are very high. About 15% of students are expelled every year from that CS program, to which you have to add the ones that drop out voluntarily.

So more than sorting people into colleges, there's a whole lot of sorting into just getting a useful degree in a timely fashion.

> as in China, Korea, Japan, or France. Are the “winners” actually better in some useful way or is it simply a sorting hat that bins students into institutions with good/mediocre/bad networks?

I can't speak to the latter three, but for China it's in large part whether you tested into a good middle school (at age 10 or whatever), and then tested into a good high school, and then spent a sufficient amount of time (read: 20hrs/day) cramming in the ~year before the exam supported by your good high school.

Or have rich parents to pay your way into the good high school, or pay for top end tutoring / cram school if that route of corruption isn't available.

Or I guess live in an area where the gap between <City Name> #1 High School and the next one down isn't as stark

> I can't speak to the latter three, but for China it's in large part whether you tested into a good middle school (at age 10 or whatever), and then tested into a good high school, and then spent a sufficient amount of time (read: 20hrs/day) cramming in the ~year before the exam supported by your good high school.

> Or have rich parents

So sounds like a useful test then: actual knowledge or skill is at best second order, but ability to fit into the upper tier networks has been demonstrated.

> Standardized testing is the benchmark for efficient signaling.

No, it's not. And your anecdote proves it.

Or rather, standardized testing just show how well you do on an exam. That means it tests how smart you are, and how well you can study the material on the test.

But (according to Caplan) that's barely the point in the kind of signalling education is good for. You could mostly just give people an IQ test as part of your hiring process.

Education takes years doing mostly pointless tasks, so that you can signal your long term _conformity_. You might be able to see how an employer might value someone who can credibly show that they can be a good cog in the machine for a long time (even if they don't see the point of the machine).

>> You could mostly just give people an IQ test as part of your hiring process

Not allowed. Griggs v. Duke Power Co.

"What Congress has forbidden is giving these devices and mechanisms controlling force unless they are demonstrably a reasonable measure of job performance. Congress has not commanded that the less qualified be preferred over the better qualified simply because of minority origins. Far from disparaging job qualifications as such, Congress has made such qualifications the controlling factor, so that race, religion, nationality, and sex become irrelevant. What Congress has commanded is that any tests used must measure the person for the job and not the person in the abstract."

So I guess under that decision, they considered IQ tests as measuring the person in the abstract.

Eh, that decision hasn't hindered companies too much in practice. Eg software companies still give you 'programming problems' that are essentially badly designed IQ tests in disguise.

If I remember right, Bryan Caplan addresses this court case in his book already.

>> software companies still give you 'programming problems'

They've had to come up with all these ridiculous interview techniques when a simple "what's your IQ" would suffice.

> Education takes years doing mostly pointless tasks, so that you can signal your long term _conformity_.

Also persistence—that you started doing something that would take 4 (or more) years, and stuck with it when it got hard.

Especially Caplan argues that the signalling works just as well for employers, if we give less (or no) subsidies to education.

If anything, you can argue that the signalling works even if we severely tax education. And as the signalling arms race is a negative externality on society, we _should_ tax education. (Or rather, we should tax capital-E Education that is useful for signalling, like university degrees. Libraries and Wikipedia don't need to be taxed.)

Did you get a refund for your defective university education? Mine was incredibly educational, in the topics I studied. It's almost like you can learn immense amounts in higher education if that's your goal.

Caplan explicitly addresses this in his book.

He says that education should at least either teach you something useful or be fun for the student. You seem to have had both. (I also liked attending university to study math, but high school was a waste of time.)

What Caplan argues against is subsidising boring, tedious education for people who don't want to be there. People who just want their piece of paper at the end.

Colleges and universities in the US also advertise job placement rates for their various programs.

Any argument for the intangible benefits of a liberal arts education must, at minimum, recognize that these are all secondary benefits. Any degree without a clear path to a well paying career is, based on the cost of tuition, a luxury good. This is true regardless of whether the tuition is paid by loans or taxes.

There is no good reason why tuition is as expensive as it is. Georgia Tech offers a $7k online MS in CS. Community college classes cost hundreds of dollars. You could study in Germany as an unsubsidized international student for a fraction of the cost of a U.S. four year university.

The problem is that America is infested with rent seeking parasites who have turned every social good into a scam. Our healthcare system is the most expensive in the world, and yet we have a lower life expectancy than Cuba. We have the most expensive education system in the world, with little to show for it.

Why are we devaluing education itself, just because far too many colleges are being run by despicable businessmen? Why are we accepting their rigged game as fixed? Boomers went to college for next to nothing. Gen X didn’t have to pay that much either. The neoliberal corruption of higher education, from a social good into a scam, is a very recent phenomenon.

The root of the rot is all the pointless add-on services. Colleges don’t need to run dorms, meal plans, health centers, or any of that. The only thing that should be offered is academics. 18 year olds can go to war. They can manage to live independently, and the ones who can’t will receive Darwin Awards.

Cheap college exists but students and families repeatedly choose more expensive schools with more services. Low cost colleges go out of business because they are seeing declining enrollment numbers. There are low cost options for those who are looking.

In terms of America having little to show for the Education system, a disproportionate number of the top colleges and universities are in the US.

Isn’t proliferation and ease of availability of student loans making college more expensive?

I’d hate to have college only be for people with means to pay. But I think tuition fee increases have far outpaced inflation.

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