What is the value of an education?

An education is valuable. We all know that. Statistics tell us those with higher levels of education earn more over a lifetime.

But why?

In an interview with book author and college professor Bryan Caplan, Wall Street Journal editorial features editor James Taranto elicits an apt analogy. Caplan’s book is titled “The Case Against Education.”

In answer to the question as to why employers are willing to pay more for the more highly — or all too often really just longer — educated, Caplan explains the answer is “signaling.”

Caplan’s analogy:

“There’s two ways to raise the value of a diamond. One of them is, you get an expert gemsmith to cut the diamond perfectly, to make it a wonderful diamond.” That adds value by making the stone objectively better — like human capital in the education context. The other way: “You get a guy with an eyepiece to look at it and go, ‘Oh yeah, yeah, this is great — it’s wonderful, flawless.’ Then he puts a little sticker on it saying ‘triple-A diamond.’” That’s signaling. The jewel is the same, but it’s certified.

So, a higher level of education signals to the employer that the job candidate is capable of spending long hours doing stultifying menial tasks and conforming to expectations.

That’s why we have $1.49 trillion in outstanding student loans, not because anyone is really leaning any job-related skills.

 

 

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7 comments on “What is the value of an education?

  1. Rincon says:

    Signaling is certainly a major part of the reason grads make more money, but I did learn some valuable things in high school and college. Those valuable lessons constituted perhaps 10% of my education. Very inefficient.

  2. Precisely his point.

  3. Anonymous says:

    I guess if his point was that an education isn’t valuable until someone is willing to pay you for what you’ve learned, then maybe he ought to wear more hats.

  4. Vernon Clayson says:

    There’s the old saw that “education is its own reward” but that “reward” doesn’t put meals on the table, for many of the educated and unemployed meals and a roof are at their parents. There’s work in Las Vegas and most jobs don’t require a college degree, most require a willingness to work, not a degree. As a homeowner, I admire people that work with their hands, plumbers, electricians, and landscapers more than bankers, lawyers, etc. I’m retired from law enforcement, I have AAS and BA degrees that look good on the wall but counted little confronting violent criminals and even disgruntled citizens over 26 long years.

  5. Anonymous says:

    Sure hope I never get to the point where I base my opinions about the value of learning something, on whether that knowledge is going to make me money or not.

    Those robots coming on the horizon’ are going to make real short work of these folks making their entire life’s “work” seem meaningless and their futures non-existent.

    I didn’t learn how to play the piano, or throw a football or catch a fish, because of how much I was going to get paid to do it in the future, but based on what Bryan Caplan said above, I was just wasting my time.

    No thank you Mr. philosopher.

  6. Rincon says:

    The primary goal of taxpayer funded education is to learn useful skills and accumulate useful knowledge. The word useful here is important. Learning things not useful is often termed entertainment. In high school, I was taught to convert cosines to tangents and how to perform geometric proofs, but was not taught about investing or how to change a ballast on a fluorescent light. Come to think of it, there was no training in the use of statistics or logic either. Judging from some of the political arguments I’ve heard (elsewhere, of course!), that one omission alone explains a great deal about the dysfunction of our political system.

  7. Bill says:

    Learning versus education. The two are not synonymous. We are dealing with 18th Century methodology in the 21st century. If you want to improve education, the first thing you do is get rid of the educators.

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