The Case Against Education

The Case Against Education: Why the Education System Is a Waste of Time and Money[1] is a book written by libertarian economist Bryan Caplan and published in 2018 by the Princeton University Press. Drawing on the economic concept of job market signaling and research in educational psychology, the book argues that much of higher education is very inefficient and has only a small effect in improving human capital, contrary to the conventional consensus in labor economics.

Caplan argues that the primary function of education is not to enhance students' skill but to certify their intelligence, conscientiousness, and conformity – attributes that are valued by employers. He ultimately estimates that approximately 80% of individuals' return to education is the result of signaling, with the remainder due to human capital accumulation.

Summary

Human capital model

The foundation of the drive to increase educational attainment across the board is the human capital model of education, which began with the research of Gary Becker.[2] The model suggests that increasing educational attainment causes increased prosperity by endowing students with increased skills. As a consequence, subsidies to education are seen as a positive investment that increases economic growth and creates spillover effects by improving civic engagement, happiness, health, etc.

Present value of learning, adjusted for forgetting

The simple human capital model tends to assume that knowledge is retained indefinitely, while a ubiquitous theme in educational interventions is that fadeout (i.e., forgetting) reliably occurs.[3] To take a simple example, we may compute the present value of a marginal fact ${\displaystyle F}$ that increases a person's productivity by ${\displaystyle V}$ as:

$${\displaystyle PV(F)=\int _{0}^{\infty }e^{-rt}Vdt={V \over {r}}}$$

where ${\displaystyle r}$ is the discount rate used to compute the present value. If ${\displaystyle V}$is $100 and ${\displaystyle r}$ is 5%, then the present value of learning ${\displaystyle F}$ is $2,000. But this is at odds with the concept of fadeout. To correct for this, assume that the probability density function for retaining ${\displaystyle F}$ follows an exponential distribution – with the corresponding survival function ${\displaystyle S(t)=e^{-\lambda t}}$. Then the present value of learning ${\displaystyle F}$, accounting for fadeout, is given by:

$${\displaystyle PV(F)=\int _{0}^{\infty }e^{-rt}S(t)Vdt=\int _{0}^{\infty }e^{-(r+\lambda )t}Vdt={V \over {r+\lambda }}}$$

Since the expected value of an exponential distribution is ${\displaystyle \lambda ^{-1}}$, we may tune this parameter based on assumptions about how long ${\displaystyle F}$ is retained. Below is a table showing what the present value is based on the expected retention time of the fact:

Present Value of Learning ${\displaystyle F}$, with Fadeout

3 Months	6 Months	1 Year	2 Years	3 Years	5 Years	10 Years
$24.69	$48.78	$95.24	$181.82	$260.87	$400.00	$666.67

Regardless of the retention time assumption, the present value of learning ${\displaystyle F}$ is significantly reduced.

Signaling model

The main alternative to the human capital model of education is the signaling model of education. The idea of job market signaling through educational attainment goes back to the work of Michael Spence.[4] The model Spence developed suggested that, even if a student did not gain any skills through an educational program, the program can still be useful so long as the signal from completing the program is correlated with traits that predict job performance.

Throughout the book, Caplan details a series of observations that suggest a significant role for signaling in the return to education:

• Intelligence[5][6][7] and conscientiousness[8] are known predictors of educational and occupational success, and are relatively stable[9][10] throughout a person's life
• International estimates of the effect of an additional year of education on national income are much lower than those estimating the impact of an additional year of education on personal income[11] (p. 114-118[1])
• Many students forget material over the summer and after the end of a class (p. 39-40[1])
  • Adults tend to forget much of the information they learned in school (p. 39-50[1]). This builds on Caplan's earlier book The Myth of the Rational Voter.[12]
• Students look to take courses that offer easy As, instead of more difficult courses
• The sheepskin effect seems to be fairly large (p. 97-102[1])
• Transfer of learning to other disciplines appears to be low or nonexistent (p. 50-59[1])

Given the above signs of signaling, Caplan argues in Ch. 5–6[1] that the selfish return to education is greater than the social return to education, suggesting that greater educational attainment creates a negative externality (p. 198[1]). In other words, status is zero-sum; skill is not (p. 229[1]).

Cost-benefit analysis of going to college

For many students, Caplan argues that most of the negative social return to pursuing further education comes from the incursion of student debt and lost employment opportunities for students who are unlikely to complete college (p. 210-211, Ch. 8[1]). He suggests that these students would be better served by vocational education.

Policy recommendations

Caplan advocates two major policy responses to the problem of signaling in education:

1. Educational austerity
2. Increased vocational education

The first recommendation is that government needs to sharply cut education funding, since public education spending in the United States across all levels tops $1 trillion annually.[13] The second recommendation is to encourage greater vocational education, because students who are unlikely to succeed in college should develop practical skills to function in the labor market. Caplan argues for an increased emphasis on vocational education that is similar in nature to the systems in Germany[14] and Switzerland.[15][16]

Reviews

Positive

• Robin Hanson at Overcoming Bias[17]
• Naomi Schaefer Riley in The Wall Street Journal[18]
• Gene Epstein in City Journal[19]

Mixed

• Stephen L. Carter in Bloomberg Opinion[20]
  • "I’m not sure he’s right, especially about education being almost entirely for the purpose of signaling, but goodness does he make a strong case. Agree with him or not, you’ll never look at the schools and colleges in quite the same way."
• Tyler Cowen in Marginal Revolution[21]
• Ilya Somin at Reason[22]

Negative

• Sarah Carr in The Washington Post[23]
• Sean Illing at Vox[24]
• Joshua Kim at Inside Higher Ed[25]

See also

• Big Five personality traits
• Credential inflation
  • Grade inflation
• Education economics
• Intelligence
• Labor economics

References

1. Caplan, Bryan (2018). The Case Against Education: Why the Education System Is a Waste of Time and Money. Princeton, NJ: Princeton University Press. ISBN 978-0691174655.
2. Becker, Gary S. (1962). "Investment in Human Capital: A Theoretical Analysis" (PDF). Journal of Political Economy. 70 (5): 9–49. doi:10.1086/258724. ISSN 0022-3808. JSTOR 1829103. S2CID 153979487.
3. Cascio, Elizabeth U; Staiger, Douglas O (2012). "Knowledge, Tests, and Fadeout in Educational Interventions". NBER Working Paper No. 18038.
4. Spence, Michael (1973). "Job Market Signaling". The Quarterly Journal of Economics. 87 (3): 355–374. doi:10.2307/1882010. ISSN 0033-5533. JSTOR 1882010.
5. Ree, Malcolm James; Earles, James A. (1992). "Intelligence Is the Best Predictor of Job Performance". Current Directions in Psychological Science. 1 (3): 86–89. doi:10.1111/1467-8721.ep10768746. ISSN 0963-7214. JSTOR 20182140. S2CID 145352062.
6. Gottfredson, Linda S. (1997-01-01). "Why g matters: The complexity of everyday life". Intelligence. Special Issue Intelligence and Social Policy. 24 (1): 79–132. doi:10.1016/S0160-2896(97)90014-3. ISSN 0160-2896.
7. Deary, Ian J.; Strand, Steve; Smith, Pauline; Fernandes, Cres (2007-01-01). "Intelligence and educational achievement". Intelligence. 35 (1): 13–21. doi:10.1016/j.intell.2006.02.001. ISSN 0160-2896.
8. Barrick, Murray R.; Mount, Michael K. (1991). "The Big Five Personality Dimensions and Job Performance: A Meta-Analysis". Personnel Psychology. 44 (1): 1–26. doi:10.1111/j.1744-6570.1991.tb00688.x. ISSN 1744-6570.
9. Specht, Jule; Egloff, Boris; Schmukle, Stefan C. (2011). "Stability and change of personality across the life course: the impact of age and major life events on mean-level and rank-order stability of the Big Five" (PDF). Journal of Personality and Social Psychology. 101 (4): 862–882. doi:10.1037/a0024950. ISSN 1939-1315. PMID 21859226.
10. Plomin, Robert (2012). "Genetics: How intelligence changes with age". Nature. 482 (7384): 165–166. Bibcode:2012Natur.482..165P. doi:10.1038/482165a. ISSN 1476-4687. PMID 22318596. S2CID 4334163.
11. Fuente, Angel de la; Doménech, Rafael (2006). "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?". Journal of the European Economic Association. 4 (1): 1–36. doi:10.1162/jeea.2006.4.1.1. ISSN 1542-4774. S2CID 11547865.
12. Caplan, Bryan (2008). The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Princeton, NJ: Princeton University Press. ISBN 9780691138732.
13. Snyder, Thomas D.; de Brey, Cristobal; Dillow, Sally A. (2017). Digest of Education Statistics, 2017 (PDF). National Center for Education Statistics. p. 13.
14. Jacoby, Tamar (2014-10-16). "Why Germany Is So Much Better at Training Its Workers". The Atlantic. Retrieved 2019-08-14.
15. Bachmann, Helena. "Who Needs College? The Swiss Opt for Vocational School". Time. ISSN 0040-781X. Retrieved 2019-08-14.
16. Pethokoukis, James (2018-03-16). "The case against education: A long-read Q&A with Bryan Caplan". AEI. Retrieved 2019-08-15.
17. Hanson, Robin (2018-01-18). "Overcoming Bias : Read The Case Against Education". www.overcomingbias.com. Retrieved 2019-08-14.
18. Riley, Naomi Schaefer (2018-01-15). "Review: Deciding Against the Paper Chase". WSJ. Retrieved 2019-08-14.
19. Epstein, Gene (2018-10-19). "Compulsory Futility". City Journal.
20. Carter, Stephen L. (2018-12-20). "My 15 Favorite Nonfiction Books of 2018". Bloomberg Opinion.
21. Cowen, Tyler (2018-05-09). "My Conversation with Bryan Caplan". Marginal Revolution. Retrieved 2019-08-14.
22. Somin, Ilya (2018-03-24). "Bryan Caplan's Case Against Education". Reason.com. Retrieved 2019-08-15.
23. Carr, Sarah (2018-02-16). "Is education a waste of time and money?". The Washington Post.
24. Illing, Sean (2018-02-16). "Why this economist thinks public education is mostly pointless". Vox. Retrieved 2019-08-14.
25. Kim, Joshua (2018-10-18). "The Case Against 'The Case Against Education' | Inside Higher Ed". Inside Higher Ed. Retrieved 2019-08-14.

Further reading

• Becker, Gary S. (1964). Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education (3rd ed.). Chicago, IL: University of Chicago Press. ISBN 9780226041209.
• Bolton, Patrick; Dewatripont, Mathias (2005). Contract Theory. Cambridge, MA: The MIT Press. pp. 99–127. ISBN 9780262025768.
• Cahuc, Pierre; Carcillo, Stéphane; Zylberberg, André (2014). Labor Economics (2nd ed.). Cambridge, MA: The MIT Press. pp. 191–245. ISBN 9780262027700.
• Bahrick, Harry P.; Hall, Lynda K. (1991). "Lifetime Maintenance of High School Mathematics Content". Journal of Experimental Psychology: General, 120 (1): 20–33.

External links

• Noah Blaylock's Study Guide to The Case Against Education
• The Greatest Myth about Math Education
• Is education worth it?
• The Case against Education: Why the Education System Is a Waste of Time and Money
• AEI Viewpoint (Part I, Part II)
• Resolved: The Government Should Cut Off All Funding to Colleges and Universities (Debate between Bryan Caplan and Edward Glaeser)