School Is Expensive. Is It Worth It?
If America listened to Bryan Caplan, he’d probably have to find another job. And he loves his job.
Mr. Caplan, 47, is a professor of economics at George Mason University, a public institution in the Washington suburbs. He enjoys exploring against-the-grain ideas, as evidenced by the titles of his books: “The Myth of the Rational Voter,” “Selfish Reasons to Have More Kids” and the one I’ve come to discuss, “The Case Against Education.”
The new volume’s subtitle is “Why the Education System Is a Waste of Time and Money.” But if you’re hoping for permission to raid your kids’ college fund, forget it. Mr. Caplan doesn’t mean schooling is a waste of your money—or his, for that matter. He holds a bachelor’s degree from the University of California, Berkeley, and a doctorate from Princeton. He’s home-schooling his twin sons, gifted 15-year-olds who study quietly in his office when I drop by. Before he took them out of public school, he looked into college admission practices and found that home-schooled applicants these days face what he calls “only mild discrimination.”
Thus Mr. Caplan’s case against education begins by acknowledging the case in favor of getting one. “It is individually very fruitful, and individually lucrative,” he says. Full-time workers with a bachelor’s degree, on average, “are making 73% more than high-school graduates.” Workers who finished high school but not college earn 30% more than high-school dropouts. Part of the difference is mere correlation: Mr. Caplan says if you adjust for pre-existing advantages like intelligence and family background, one-fifth to two-fifths of the education premium goes away. Even so, it really does pay to finish school.
The prevailing view among labor economists—Mr. Caplan disdains them as “human-capital purists”—is that education works “by pouring useful skills into you, which you then go and use on the job.” That’s true to a point, he allows. School teaches basic “literacy and numeracy,” essential in almost any workplace. Specialized skills carry their own premium, so that a degree in engineering is worth more than one in philosophy or fine arts. But that 73% college premium is an average, which includes workers who studied soft or esoteric subjects.
Break it down, Mr. Caplan says, and “there is no known college major where the average earnings are not noticeably higher than just an average high-school graduate.” Yet there aren’t many jobs in which you can apply your knowledge of philosophy or fine arts—or many other subjects from high school or college. He goes through a list: “history, social studies, art, music, higher mathematics for most people, Latin, a foreign language.” That is the sense in which education is a waste of time.
“Whenever I talk to people about my book,” Mr. Caplan says, “as long as I don’t mention policy, as long as I just describe what it’s like to be a student, almost no one disagrees. Almost everyone says, ‘Yeah, my God, I wasted all of those years in trigonometry—what a waste of time that was.’ Or, ‘I had to do Latin for four years—what a waste of time that was.’ ”
Which leads him to ask: “Why is it that employers would pay all of this extra money for you to go and study a bunch of subjects that they don’t actually need you to know?”
The answer is “signaling,” an economic concept Mr. Caplan explains with an 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.
Suppose you have a bachelor’s in philosophy from Mr. Caplan’s doctoral alma mater, and you’re applying for a job somewhere other than a college philosophy department. What does the sheepskin signal? His answer is threefold: intelligence, work ethic and conformity. “Finishing a philosophy degree from Princeton—most people are not smart enough to do that,” he says. At the same time, “you could be very smart and still fail philosophy at Princeton, because you don’t put in the time and effort to go and pass your classes.”
As for conformity, Mr. Caplan puts the signal into words: “I understand what society expects of me. I’m willing to do it; I’m not going to complain about it; I’m just going to comply. I’m not going to sit around saying, ‘Why do we have to do this stuff? Can’t we do it some other way? I don’t feel like it!’ ” It’s easy to gainsay the value of conformity, a trait the spectacularly successful often lack. Think Mark Zuckerberg. But then imagine how he would have fared as a 21-year-old college dropout applying for an entry-level corporate job.
Mr. Caplan believes these signals are reliable, that college graduates generally do make better employees than nongraduates. Thus it is rational for employers to favor them, and for young people to go through school. Yet the system as a whole is dysfunctional, he argues, because the signaling game is zero-sum. He illustrates the point with another analogy: If everyone at a concert is sitting, and you want to see better, you can stand up. “But if everyone stands up, everyone does not see better.”
The advantage of having a credential, that is, comes at the expense of those who lack it, pushing them to pursue it simply to keep up. The result is “credential inflation.” Today a college degree is a prerequisite for jobs that didn’t previously require one—secretary, rental-car clerk, high-end waiter. And to return to the concert analogy, if you’re unable to stand, you’re objectively worse off than before. “People who are in the bottom 25% of math scores—their odds of finishing college, if they start, are usually like 5% or 10%,” Mr. Caplan says. They end up saddled with debt and shut out of jobs they may be perfectly capable of performing.
Signals weaken as they become widely diffused. Mr. Caplan says studies that track how students spend their time confirm the suspicion that higher education isn’t as rigorous as it once was. “In the mid-’60s, a typical college student would be spending 40 hours a week on academic stuff—classes plus studying. And now, it’s about one-third less,” he says. “College is kind of a party now.” A college degree doesn’t signal the same intensity of work ethic as it did then, but because of the zero-sum nature of signaling, those without degrees look lazier than before.
Likewise, ironically, with conformity: The greater the number of people who conform, the less they stand out—and the more that nonconformists do. “If there’s a middle-class kid who says, ‘I don’t feel like going to school,’ this is almost like saying, ‘I’m going to worship Satan,’ ” Mr. Caplan says. “You are basically spitting in the face of your teachers, your parents, your peers, our entire society”—not to mention potential employers.
Because educational signaling is zero-sum, and because its benefits tend to flow to those who were well-off to begin with, the system promotes inequality without creating much wealth. Research comparing the personal and the national payoffs of schooling finds a wide discrepancy—in “the ballpark of, if a year of school for an individual raises earnings about 10%, [then] if you go and raise the education of an entire country’s workforce by a year, it seems to only raise the income of the country by about 2%.” Mr. Caplan therefore reckons that roughly 80% of the education premium comes from signaling, only 20% from marketable skills.
Some critics, noting all this inefficiency and the indebtedness it occasions—$1.49 trillion in outstanding student loans nationwide, according to the latest Federal Reserve estimate—have described higher education as either a “bubble” or a sclerotic industry vulnerable to disruption. Mr. Caplan doesn’t believe it. Because educational institutions are heavily subsidized by government, “they’ve got a massive guaranteed paycheck regardless of their customers.”
Besides, what would the alternative look like? “Online education is only a viable competitor if you think that the main thing going on in schools is teaching useful skills,” Mr. Caplan says. He doubts that any internet certificate can supplant the signaling function, especially when it comes to conformity: “If your new, weird signal of conformity attracts a bunch of nonconformists, it fails as a signal of conformity.” One more analogy: The men’s business suit “has lasted for a couple of centuries now—what a stupid uniform for working in a hot, humid city,” Mr. Caplan says. It endures “because it signals conformity.” Mr. Zuckerberg goes to Washington.
The irrational actor in this whole drama, Mr. Caplan says, is the voter, who almost without exception wants to keep the tax money flowing. “Only about 5% of Americans say that we should spend less on education,” he says. Even among self-identified “strong Republicans,” the figure is a mere 12%. In this regard, Mr. Caplan is quite the nonconformist. In the new book, he says his ideal would be a complete “separation of school and state,” a position he describes as “crazy extremism.”
He’s more modest in our conversation, suggesting a 2% spending cut. Even that, he admits, is “a very unpopular view”—and one that invariably meets resistance: “When someone says that we need more money for education, people don’t then fold their arms and say, ‘Well, how exactly do you propose to spend this money?’ ” But whenever he suggests cutting it, they demand specifics: “How could we possibly even take this idea remotely seriously unless you tell us exactly how?”
He does throw out one idea, when I ask about vocational education: Why not “take the money that we put on foreign-language programs and put it into welding or plumbing”? Don’t hold your breath waiting for a politician to support that. The idea of vocational school may be fashionable, but there’s still a widespread assumption that it carries a stigma.
“This means that for society, maybe it’s even better than it looks,” Mr. Caplan says. “People are not primarily there to look good; they’re there to learn something and learn how to do something.”
That’s true of some college students, too—and Mr. Caplan acknowledges that learning has intrinsic value for those who have the passion. “I’m not one of these professors that resents teaching or dislikes teaching. I love it,” he says. “Maybe most of the students aren’t that interested,” but if “there’s one person in the room that cares, that person to me is the center of the universe.”
Mr. Taranto is the Journal’s editorial features editor.
Appeared in the April 14, 2018, print edition.