Credentialism

This post from the Carnival of Homeschooling led to this article about two Pennsylvania sociologists who decry our society's increasing emphasis on useless credentials:

Collins, for instance, marvels at the common notion that producing more degree-holders will help more people achieve the American Dream, claiming the concept “has a kind of dog-chasing-its-tail quality to it.” Increasing the number of credentialed people competing for a finite number of jobs tends to ratchet up the educational requirements for those jobs without increasing anyone’s income. “Imagine if we said we want every school in the country to have a championship football team, that every team should win 90 percent of its games,” he says. “People would recognize the flaw in that thinking. But we say that about education all the time.”

Says Berg, “More and more lower-income people are attending college at higher rates than they ever did before. And they are taking jobs way below what college degrees would have gotten them years ago.” Graduates burdened by student loans discover that the job market is so glutted that they can’t find work that pays well enough to discharge their debts. “It’s a real menace,” he adds. “These kids are mortgaged to the hilt.”
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The dirty secret in the article title is Collins’ observation that credential inflation keeps universities flush with tuition dollars, which help to finance the livelihoods of senior faculty such as himself. “Most intellectuals in liberal society, we take it pretty much as an article of faith that we need to expand education,” he says. “It’s also for us a rather self-serving argument. It provides our positions.”

That's no surprise. Professors and intellectuals are prone to the same cognitive error as every other business enterprise: What's good for them simply must be good for America.

I was especially intrigued by this paragraph:

The introduction of jet travel in the late 1950s gave Berg’s team a unique opportunity to test whether cognitive skills are best honed in school or on the job. To run the nation’s new system of air-traffic control, the Federal Aviation Administration hired and trained 507 men, half of whom had no formal education beyond high school. Years later, when Berg and his assistants evaluated the group’s job performances by counting the numbers of awards the men had earned from supervisors, half the college graduates had earned no awards, while a little over one-third had earned two or more. Among high-school graduates, though, only 30 percent had earned no awards and 43 percent had earned at least two. Results were mixed among controllers who had some education past high school. “Education,” Berg concluded, “proves not to be a factor in the daily performances of one of the most demanding decision-making jobs in America.”

As Berg saw it, the “great training robbery” of the postwar years was the massive waste of government spending on an education system that does little or nothing to enhance worker productivity. At the time, annual expenditures on U.S. higher education stood at about $17 billion. Today, the figure is $270 billion, of which $55 billion is supplied by state appropriations, with another $81 billion coming from federally funded student financial aid.

So why do so many people pursue higher education? One word: signaling.

Education and Jobs sold surprisingly well when it was published, and it influenced a young Stanford economist named Michael Spence who would go on to win the 2001 Nobel Prize for his work on “market signaling.” Spence was among the first to apply rigorous economic theory to Berg’s notion that employers were using education as a simple screening device and not as an indicator that job applicants with more education possess superior skills. Spence’s theory is that, even if education is devoid of any practical content, a high level of education can “signal” to an employer that an individual is productive enough to endure the costs in time, effort, and money to advance.

I wouldn't be surprised if blame-avoidance played some role as well. If a particular person doesn't work out on the job, it's easier to say, "How was I to know that an MBA wouldn't be up to snuff?," while if the person was a mere high school graduate . . .

The sociologists also point out that when society expects people to go to college in order to have a good job, this inhibits social mobility. This is because only the wealthier segments of society tend to be able to sacrifice 7 or 8 working years to pursue bachelors' and graduate degrees.

Bottom line: What our society needs is a cheaper way to signal intelligence and the capability for hard work.

The last thing that we need to do is increase access to higher education, as if a society that was 100% college-educated could survive by everyone doing each other's taxes or filing lawsuits against each other. (Compare G.K. Chesterton's great line: "We cannot all live by taking in each other's washing.")

Someone would have to do the manufacturing, the farming, the manual labor, the service jobs, etc. And even in the world of business, I'd bet that the vast majority of people end up using knowledge that they learned on the job. Most college graduates are going to end up under-employed or employed in a different field. Thus, increasing access to college means that, on average, you're putting more people in debt and increasing their under-employment.

Just throwing out an admittedly tongue-in-cheek idea here, but maybe Congress should ban all but the top 20% of students from going to college. (Or maybe 25%? I'm open to negotiation on the exact percentage.) Counterintuitive, no? But that might be the only thing that would work. There's a collective action problem here. If everyone else in a society is racing to get the best credentials, then you as an individual may well be worse off if you drop out of the race -- even though everyone in society would be better off if more people dropped out. Same for businesses: If you're the human resources director for a corporation, and you know that most hard-working and intelligent people in our society do in fact have a college education or a graduate degree, then it is only rational for you to demand those credentials too -- even if their formal education is going to be absolutely useless on the job.

But with a ban in place, you'd have a lot of people in America who would be hard-working, intelligent, and deserving of good jobs. And the people doing the hiring would recognize that fact. They would no longer be able to assume that if you lacked a college degree, you must be in the bottom 30%.

Thus, businesses would necessarily have to come up with some other way to find out whether someone is worth hiring. And I bet that whatever method that they come up with will be cheaper than requiring everyone to spend 4-to-8 years and many thousands of dollars (both in real costs and in opportunity costs), not to learn anything that they will actually use on the job, but just to signal that they are a decent person.