Learning How (Not?) to Learn

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by Amy Willis
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Bryan Caplan on the Case Again... Jordan Peterson on 12 Rules fo...

by Alice Temnick

What does the "sheepskin effect" tell us about earning a college degree? Does a college education buy more than a Grade A premium employee stamp?

sheepskin.jpg Bryan Caplan discusses human capital, the ability bias, and the particular importance of signaling as the reason for the greater earnings of college graduates as compared to high school graduates. In questioning the difficulty of measuring the value of a college education, host Russ Roberts steers this week's conversation toward how we learn, some of the shortcomings of K-12 and college education, and how we apply what we learn in practical settings.

1. Given the value of signalling and the findings of the sheepskin effect, to what extent is a college education a waste of time and/or money? What other factors, such as the acquisition of the first post-college job in one's desired field, to their eventual career trajectory?

2. Would median income data of high school and college grads that reduces the effect of the number of outliers (extremely high income earners with college degrees) enhance or detract from the argument of the case against a college education, and why?

3. What fields of study or subject areas best challenge Caplan's claim that little is actually learned in college that is related to relevant skills for the modern labor market? Explain.

4. Russ questions the "measurability" of the subtleties of learning, of learning how to learn (meta-learning) and the overall impact of school on one's neural networks. Caplan believes the right test can measure any learning. How do you weigh in?

5. Caplan ends with discussion in favor of kids getting practical work experience. Since this has gone on for decades in the form of after school and summer jobs (right???), could he mean work in place of schooling? What are your thoughts about how this might or might not work in practice?


Alice Temnick teaches Economics at the United Nations International School in New York City. She is an Economics examiner for the International Baccalaureate, teaches for the Foundation for Teaching Economics and Oxford Studies Courses and is a long-time participant in Liberty Fund Conferences.

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COMMENTS (8 to date)
Per Kurowski writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Dr Golabki writes:
"5. Caplan ends with discussion in favor of kids getting practical work experience. Since this has gone on for decades in the form of after school and summer jobs (right???), could he mean work in place of schooling? What are your thoughts about how this might or might not work in practice?"

When Caplan said this in the episode it sounded like he was suggesting pushing kids at the margins. Encourage your kids to work after school and over the summer rather some other "enrichment" activity. Encourage your kids to take a year off before college. If you're kids on the margins of college encourage him or her to skip it.

However, I'm unclear on what Caplan thinks the ideal structure is. Is it something like the marginal change above...

...Or is it terminating formal education at grade 6 and having most kids over the age of 10 enter the work force (making middle school, high school and college more like graduate school is now, for kids with strong interest in an area + attitude + means)...

...Or is it changing education methodologically, maybe to a more "self directed" process.

I'm not sure which is Caplan's view, but I find the idea of making middle/high school and college like grad school interesting... even if it's concerning in terms or the potential impact on equality of opportunity and totally implausible politically... and pretty hysterical from the HR perspective.

Dr Golabki writes:

"2. Would median income data of high school and college grads that reduces the effect of the number of outliers (extremely high income earners with college degrees) enhance or detract from the argument of the case against a college education, and why?"

I think Russ was right to bring this up because when you are talking about "average" income the top 0.1% can really dominate the signal.

It sounds like we don't actually know the numbers, but lets assume the median value of a college degree is lower than the mean value of a college degree.

My guess is that top group is heavy with people that are high on natural ability (non-casual). In addition, I think the very top earners are mostly executives and entrepreneurs, and partners at top firms... where the value of there actual the education is pretty limited beyond signalling. So if you take the median approach one might expect that the measured magnitude of the value of education would go down, but the measured proportion of that value due to casual effects (signaling + actual learning) to go up, and within that causal segment, the measured value of actual learning to go up.

I think Bryan said the breakdown is something like 55% (sorting, non-causal), 35% (signaling, causal), 10% (learning, causal). Maybe that changes to 45% (sorting, non-causal), 40% (signaling, causal), 15% (learning, causal)?

Speculation running amok.

Jason Bray writes:

I enjoyed this episode quite well, but I have to make a point that I'm surprised neither Russ nor Bryan seemed to acknowledge. Let me disclaim that I am basing this entirely off anecdotal and personal experience.

I find it strange that neither person pointed out that it is virtually universally understood that the degree is what matters with regard to college. I can't think of a single person in my social circle that would say that the signal isn't what makes the difference. I have personally been told that by my parents for my entire life.

Perhaps it's because these two work in a field where their degree is directly relevant to what they do on a day to day basis. For an English major who manages a retail store or even a computer scientist (where only the very basic concepts in the first year are really directly relevant and most of our actual day-to-day skill-set is learned on the job), we all know that the reason we got the job is because we had a degree and that we wouldn't have gotten the time of day without it.

The amount of staggering incompetence you see from college graduates that are far outshone by anyone with even a few months of experience in most job fields should make it obvious that for most jobs there is very little weight to the human capital aspect. In my (anecdotal and personal) experience, almost everyone agrees that an apprenticeship would be a better way to go if it weren't for the social pressure to go to college and the signalling value of a company being able to see a piece of paper showing that this person is worth giving a chance to.

Just odd that no one seemed to acknowledge that everyone in the "real world" already agrees with Caplan and that his statement that the value of a college degree is the signal is no more controversial than that the sky is blue.

All that said, maybe my friend-group is just an outlier and that everyone else in the world thinks you learn useful skills in college and that there really is no substitute for higher education.

JK Brown writes:

I have a test for the Sheepskin effect.

I've suggested on forums that perhaps we should permit school tuition debt to be discharged in bankruptcy after 10 years or so, but require they give up the credential. They can keep the education, such as it is, but the schools would be prohibited, subject to severe penalties (say 1% of endowment), from acknowledging the individual graduated or was conferred a degree. They could only confirm the individual was enrolled over the period of time, without any specificity to classes or grades. It would be last received, first given up so someone with a Ph.D or a medical degree couldn't give up the BA and keep the credential they only qualified for by having the BA when applying.

The individual could use any knowledge they gained. Perhaps employers would retain them even without the credential?

How many of those with student debt would go for this deal? How might employers react.

Dr Golabki writes:

@Jason

The average acedemdic is in the 99th percentile of people that found college both enriching in a personal sense and rewarding in a financial sense.

Madeleine writes:

I am sure someone has brought this up before, but maybe the "sheepskin effect" is just the dividend society pays for not being a quitter? Surely we value highly someone who sees a task to its conclusion.

JK Brown writes:

I was watching a movie this weekend, 'Why Him', that had a serious plot device of the daughter's decision to drop out of Stanford with just a semester to go to run a foundation the rich boyfriend was financing for her. And it wasn't a Hollywood jab at flyover country as in "Look at these rubes from Michigan all upset over their kid not getting a diploma". It was a very concerned father upset his daughter was "ruining her future" and would always be a "college dropout." But the happy ending comes with the daughter deciding to finish college, then save Africa.

And let's face it, if there is a college that you can drop out of a semester from graduation and still have employers (and venture capitalists) give you the time of day, it's Stanford.

The Sheepskin effect is strong within out culture.

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