I think the assumption that degree difficulty (ie signalling cost) depends only on individual IQ (i.e. is constant with respect to A) cannot be correct. Degree difficulty must be higher in higher-intelligence societies (holding all else equal). So K is some increasing function of A.
Basically it’s somewhere between “top 30% get a degree regardless” and “whoever is smarter than x gets a degree, where x is constant for all societies”
Right, this is the line that led me to the same objection you have...
"If you could increase IQ by sprinkling pixie dust on the population, education levels would rise despite the fact that education has zero effect on productivity."
Presumably if pixie dust made us all 50% more intelligent, universities would change in a way that made obtaining a degree harder (relative to today), so the signalling cost would not go down by 50% but something between 0-50%.
I think the assumption that degree difficulty (ie signalling cost) depends only on individual IQ (i.e. is constant with respect to A) cannot be correct. Degree difficulty must be higher in higher-intelligence societies (holding all else equal). So K is some increasing function of A.
Basically it’s somewhere between “top 30% get a degree regardless” and “whoever is smarter than x gets a degree, where x is constant for all societies”
Right, this is the line that led me to the same objection you have...
"If you could increase IQ by sprinkling pixie dust on the population, education levels would rise despite the fact that education has zero effect on productivity."
Presumably if pixie dust made us all 50% more intelligent, universities would change in a way that made obtaining a degree harder (relative to today), so the signalling cost would not go down by 50% but something between 0-50%.
Narrowly specific and hypothetical models are the best models, I say. Fascinating read!
Yes. The broader the implications of a model, the less credit I give them.
IQ is not uniformly distributed, but normally distributed. I don't see why you need this wrong assumption in your model.
So, this model would explain rising education as a reaction of to a rising productivity gap?