Book review: "The Case against Education: Why the Education System Is a Waste of Time and Money"

Author:  Bryan Caplan

Reviewer:     Jenna A. Robinson

I don’t want Bryan Caplan to be right. For many years, I have worked to reform higher education in the belief that the system is broken but ultimately repairable. Caplan’s new book, The Case against Education: Why the Education System Is a Waste of Time and Money, says otherwise.

Caplan’s basic premise, that our sprawling system of secondary and postsecondary education is largely wasteful, is hard to swallow. What about the fascinating courses? The brilliant lecturers? The breakthrough scientific innovations? The towering libraries filled with the history and insight of the many scholars who have gone before? Surely all of this wouldn’t exist without good reason.

And what about the relentless rush of data showing that, on average, college graduates earn significantly more money than high school graduates? And that high school graduates, in turn, vastly out-earn their peers who dropped out of high school? The data and the conventional wisdom apparently agree that education, if approached seriously, is a worthwhile investment.

Caplan debunks or incorporates these arguments, as relevant, with his theory of signaling. College, he says, is mostly a signal to employers that a graduate is intelligent, conscientious, and conformist. Employers value these traits. Thus, they pay more for employees who have successfully completed a degree than for those who have not. “The labor market doesn’t pay you for the useless subjects you master,” Caplan says; “it pays you for the preexisting traits you reveal by mastering them” (p. 13).

Caplan is careful to say that education is not exclusively a signal. He admits that there is some element of human-capital creation that explains the high returns to education. In particular, he notes that statistics and econometrics are useful in many data-driven occupations as well as in everyday reasoning and that the simple reading, writing, and arithmetic learned in elementary school are necessary basics for almost all future learning and working.

But his critics maintain that education is mostly human-capital creation—that is, education pays because students learn real skills valued in the market. Caplan uses a simple question to demonstrate the difference between the two competing theories. “Imagine this stark dilemma: you can have either a Princeton education without a diploma, or a Princeton diploma without an education. Which gets you further in the job market?” (p. 27).

Any sane person would choose the degree without the education. That’s because a degree from Princeton will open the doors of the job market. It is the degree, not the education, that confers the many benefits of college matriculation: more money, prestige, and career stability. After all, Caplan points out, a Princeton education is already free. Anyone can show up to Princeton courses—but their work won’t be graded or credited.

Caplan also provides data to further bolster his claims—too much to include it all here. He shows that the most lucrative years of education are those that are accompanied by a credential. The rewards for completing a single year of high school, Caplan observes, are not uniform. Completing the senior year is far more valuable than completing the freshman, sophomore, or junior years. The same is true for college. Caplan calls this credential correlation “the sheepskin effect” and explains the data: “High school graduation has a big [pay] spike: twelfth grade pays more than grades 9, 10, and 11 combined. In percentage terms, the average study finds graduation is worth 3.4 regular years. College graduation has a huge spike: senior year of college pays over twice as much as freshman, sophomore, and junior years combined” (p. 98).

(Incidentally, this is why students with some college but no degree are among the most likely to default on their student loans. They have incurred some of the costs but almost none of the visible benefits of higher education. Employers treat them almost as if they never attended college at all.)

In addition to amassing evidence for signaling, Caplan thoroughly debunks the idea that formal education significantly contributes to human-capital creation for most students. He cites evidence on the failed transfer of learning, the lack of durable improvements from education, and the abysmal results of college graduates on various measurements of critical thinking.

For example, he shows that first-year and fourth-year college students score the same on tests of informal reasoning; that evidence attributing IQ increases to extra years of schooling are conflating measured intelligence with genuine intelligence; and that schools teach very few job skills that employers actually find useful. The data are impressive—and interesting. Caplan concludes, “[H]uman capital purism looks not just overstated, but Orwellian. Most of what schools teach has no value in the labor market. Students fail to learn most of what they’re taught. Adults forget most of what they learn. When you mention these awkward facts, educators speak to you of miracles: studying anything makes you better at everything. Never mind educational psychologists’ century of research exposing these miracles as soothing myths” (p. 68).

These data shouldn’t be shocking to anyone interested in higher-education reform. They doubtless already know that college students show little improvement on standardized tests from freshman to senior year, know little of the scientific method, and routinely fail man-on-the-street interviews on simple civics questions. What’s more, college students themselves intuitively understand signaling. That’s why they skip class, search around for professors who give easy A’s, and cram for tests instead of committing the material to long-term memory. They know it’s the degree that matters to future employers, not the content of their courses.

From this sobering evidence, Caplan concludes that although there are considerable personal benefits to ever-increasing years of education (which he painstakingly measures), there are no corresponding societal benefits (also painstakingly measured). In fact, there are significant costs. That’s because most of the information provided by signaling is mere redistribution: “If education boosts compensation solely by raising worker productivity, society’s gain equals the worker’s gain; if education boosts compensation solely by revealing worker productivity, society gains far less. For most purposes, in fact, society gains zero” (p. 167). Education is a very expensive process for revealing worker productivity—and much of it falls on the taxpayer.

Caplan maintains that education either reveals individuals’ tendencies toward behaviors that benefit society (e.g., tendencies against criminal activity or toward political participation) or changes individuals’ rankings relative to others with whom they are competing. The purported health effects of education fall into the latter category. Caplan posits that the positive effect on health is a covert effect of status on health. He observes: “Insofar as schooling makes you healthier by raising your status, its health benefits are zero-sum: you can’t raise your rank without dragging others down” (p. 171). Again, of course, Caplan painstakingly measures and documents it all.

In short, extra years of education do confer some benefits. Students do learn some useful skills. But most of the process is an enormously wasteful shifting of resources from some groups of people to others.

Caplan concludes his arguments with an almost heretical prescription: “we need lots less education” (p. 195). Perhaps a modified version would read: we need “lots less formal education” or “lots less schooling.” Caplan’s prescription stands in stark contrast to the conventional wisdom and even most books by educational reformers—who conclude that we still need formal education, but that we’re doing it all wrong.

But Caplan’s data are compelling. The theory of signaling aligns with much that we know to be true about higher education. And even if signaling explains only half of the so-called gains from education, it offers reason enough to examine the whole system. After reading and reviewing the book, I am a convert.

Anyone interested in the economy, the workforce, or education policy would do well to pick up Caplan’s book but should be prepared to confront all of their former assumptions.

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UK: Private school pupils who take IGCSEs have better chance of getting top marks, exam watchdog admits

IGCSEs follow a  more traditional curriculum

Private school pupils who take IGCSEs have a better chance of getting top marks, the exam watchdog has admitted.

Roger Taylor, the chair of Ofqual, said it is a “problem” that a far higher proportion of children get As and A*s in iGCSEs – the majority of which are taken by those at fee-paying schools - compared to their state educated peers who have sat the reformed GCSEs.

He told the education select committee that this is a “disturbing” issue within the exam system, and agreed that it reinforces the privileges of children whose families can afford to pay for private school fees. 

Originally, private schools opted for iGCSEs as they saw GCSEs as too easy and not sufficient preparation for A level.

However, in a bid to make GCSEs more rigorous, the ministers overhauled the qualifications by removing most coursework and introducing a numerical grading system.

Earlier this year, research published by Education Datalab showed that two thirds of pupils achieved grade A* and A in IGCSEs in maths and English language, while just 18 to 20 per cent achieved the equivalent grades in reformed GCSEs.

Lucy Powell, the Labour MP for Manchester Central, said it is a “scandal” and an “outrage” that children at private schools who win top grades in their iGCSEs are looked on more favourably by universities and employers who cannot tell the difference between these exams and GCSEs.

Mr Taylor said that the difference can – at least in part – be explained by privately educated children generally having higher levels of attainment than children at state schools.

He said that iGCSES are not "systematically easier" than the reformed GCSEs. But since they are not regulated in the same way it means there is a “risk” that a “particular subject in a particular year will be easier and we don't have the mechanisms to do anything about that”.

GCSEs are regulated by Ofqual, which uses a statistical method called "comparable outcomes" to ensure that roughly the same proportion of pupils will be awarded each grade as in previous years.

Meanwhile, IGCSEs are not regulated by Ofqual, meaning that the number of top grades handed out are not in any way restricted.

Mr Taylor agreed with Robert Halfon, the Conservative chair of the education select committee, that currently there is not a “level playing field” between private and state school pupils. 

He said the best solution would be for iGCSEs to be renamed, and said the Ofqual has examined “legal routes” to address this. Mr Taylor added: “This is a situation that is not really conducive to public trust in the examination system. It is a problem. We obviously are monitoring this and have researched this because it is an area of concern.”

Labour committee member Ian Mearns said that there is a feeling that the current set up is “inherently unfair” on state school students.

Mr Taylor replied: "I think this is precisely why this is such a disturbing issue in terms of the fairness of the system. Because it is used in one sector of the education system and not in another."

Mr Halfon said: "Basically, what we are saying is that if you are wealthy enough to afford to go to private school, not only that, you're going to get an easier exam, which is called the same name and recognised by employers.

"But if you're not wealthy, you go to state school and do a higher quality, higher standard exam that is called GCSE, and you get potentially lower grades even though that person from private school is getting all those advantages."

Mr Taylor said he agrees with this analysis, but added that private schools are allowed to teach whichever qualifications they want so they are not breaking any rules.

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College Was Already Rigged

The FBI dropped a new bombshell on Tuesday, and this time the scandal is Russian-free. Dozens of wealthy parents, including notable celebrities, were charged in a college admissions scandal and accused of paying a total of $25 million in payments to cheat their children into school.

According to Politico, “parents paid a college counseling test prep business in Newport Beach, Calif., called ‘The Key’, which bribed college coaches and administrators and organized a scheme to help students cheat on college entrance exams, including the ACT and SAT.”

It is disappointing that these parents would resort to such measures to ensure that their children get into elite colleges. But Americans should not be surprised that the system is broken. It always has been, and working-class Americans are paying for it.

Take, for example, our student loan system.

For the most part, students who earn bachelor’s degrees have higher lifetime earnings than students with only a high school degree. So why have lawmakers promulgated policies like loan forgiveness, the in-school interest subsidy, and even “free” college, to remove financial responsibility from the elite one-third of Americans who obtain the highly sought-after bachelor’s degree?

The hardworking two-thirds of Americans who have bypassed this system altogether should not have to absorb the cost for students who are far more likely to achieve high career earnings.

These policies fuel the troublesome trend of degree inflation. It is true that higher levels of education indicate higher levels of earnings, and some may argue that this is because a college degree equips students with the skills necessary to succeed in the workplace. But it appears increasingly apparent that the simple attainment of a degree carries far more weight than the actual attainment of knowledge or marketable skills.

The signaling that occurs when a student obtains a degree tells employers that they have followed through on their education, but says little about their human capital development.

While most would not put it in so many words, this is a phenomenon that most Americans, including the wealthy parents wrapped up in this scandal, are well aware of.

As George Mason University’s Bryan Caplan has noted, if average students were presented with this scenario: You can either receive a bachelor’s degree from Georgetown University without going to a single class, or you can take classes at Georgetown but you walk away without the degree, most Americans would pick the former option, rather than the latter.

This is because most Americans with a small amount of motivation and an internet connection can seek out alternative means for obtaining career knowledge outside of the classroom. However, getting your foot in the door without a college degree is another story.

This admissions scandal should cause all Americans to rethink the system they are paying into. Celebrities such as Felicity Huffman and Lori Loughlin were able to cheat the system because of their elite celebrity status and high financial capital.

This is not the system President Lyndon Johnson sought in his vision for a “Great Society.” His hope was to grant all Americans, regardless of socio-economic status, a pathway to the American dream.

Instead, higher education in America today embodies a system that shackles American students and taxpayers alike with high student loan debt, and fails to create a proper education-to-workforce pipeline that enables graduates to pay down their loans.

American taxpayers should not have to spend roughly $75 billion per year on a broken system. Furthermore, students and taxpayers should not suffer under $1.5 trillion in student loan debt for degrees of questionable value.

In order to reinstate academic integrity in the higher education system, lawmakers should eliminate policies that favor the elite at the expense of working-class Americans. Loan forgiveness and “free college” only serve to pour money into a broken system that perpetuates elitism at the expense of working Americans and other viable pathways to upward mobility.

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