You've surely answered this question before, but under your model, why wouldn't companies proactively (i.e. no talent/applicant has to be contrarian) invent a cheaper proxy themselves to capitalize on the untapped smart-college-age population? This population would then gain "work experience", making the deal attractive to them aswell. (i.e. assuming the hypothetical company in question is prestigious enough such that this makes up for the lack of college degree such a deal would incur)
However, this seems to have not happened so far in the ~free market, which would call the signaling model into question.
If no such cheaper proxy could be devised, e.g. due to conscientiousness being hard to measure, this would make education efficient again (don't believe that, just responding to a possible objection)
One reason is that it's not the companies who are over-paying for over-education. Say you can send a young person to college for $200,000, or the company can train them for $50,000 and get the same result. Why should the company bother? They are not the ones paying $200,000. Even if they worked out a deal where the employee pays back the cost of the training, they still have to make the effort to set up the program. From their perspective it would solve a non-problem.
I agree that I failed to consider this. However, I think this ignores the opportunity cost under which the students themselves suffer, according to the signaling hypothesis. Your argument would still apply if education goes to age 50, and costs 1M$. Lastly, I think ~private education likewise remains unexplained.
Fair points. I think another dynamic that works into it is "The Tyranny of the Status Quo." I do see some private education options though. In my own field of software development, tech companies have for years hired candidates from boot camps and other alternatives to college. Some of those training companies offer the instruction for free and ask a cut of your salary the first few years if you get hired. I think that only works in professions where there are clear alternatives to grades and sheepskins, which is true in tech where companies often decide to hire or not based on a full day of tough programming exercises.
Disparate impact. Colleges degrees are an unprincipled exception to the government rule that any criteria for employment which does not perfectly match the racial and sexual demographics of the population is illegal.
Well the contrarian mind certainly likes to blame Griggs, but do you have any explanation as to why the EU is not the supposed psychometrician's paradise then? Or put normally, how does this explain the proliferation of college degrees outside of the United States, in your opinion?
When I was a young American male, my military obligation interfered with my education. In retrospect, it's hard to decide which was the greater waste (I was not injured or killed). Both were near tragic. Thank God for the "near."
I was successful in school, a failure in the navy. Since both, I've oscillated between these.
Bryan: “Because I disbelieve it (free market in education). It goes against everything I’ve seen. I’ve attended both public and private schools. They’re cut from the same cloth”.
Bryan makes the mistake many do when they believe that, if we had a truly free market in education, the future would be the same as today, with a few private, nonprofit schools competing with public schools. In a truly free market, there would be no public/ government schools. The almost one trillion dollars now spent on government schools would be in the hands of educational consumers (parents), creating a trillion-dollar K-12 educational industry. The schools would be owned and operated mostly by for-profit corporations. These would be like all for-profit companies in every other industry, competing for market share by providing a superior product.
I think some companies, as well as other institutions, sort of do this by taking on volunteers in an "internship". Some are paid a minimal wage, some are not. Students and others do it for the experience. The company can later determine if you are worth hiring at a regular wage.
You've surely answered this question before, but under your model, why wouldn't companies proactively (i.e. no talent/applicant has to be contrarian) invent a cheaper proxy themselves to capitalize on the untapped smart-college-age population? This population would then gain "work experience", making the deal attractive to them aswell. (i.e. assuming the hypothetical company in question is prestigious enough such that this makes up for the lack of college degree such a deal would incur)
However, this seems to have not happened so far in the ~free market, which would call the signaling model into question.
If no such cheaper proxy could be devised, e.g. due to conscientiousness being hard to measure, this would make education efficient again (don't believe that, just responding to a possible objection)
One reason is that it's not the companies who are over-paying for over-education. Say you can send a young person to college for $200,000, or the company can train them for $50,000 and get the same result. Why should the company bother? They are not the ones paying $200,000. Even if they worked out a deal where the employee pays back the cost of the training, they still have to make the effort to set up the program. From their perspective it would solve a non-problem.
I agree that I failed to consider this. However, I think this ignores the opportunity cost under which the students themselves suffer, according to the signaling hypothesis. Your argument would still apply if education goes to age 50, and costs 1M$. Lastly, I think ~private education likewise remains unexplained.
Fair points. I think another dynamic that works into it is "The Tyranny of the Status Quo." I do see some private education options though. In my own field of software development, tech companies have for years hired candidates from boot camps and other alternatives to college. Some of those training companies offer the instruction for free and ask a cut of your salary the first few years if you get hired. I think that only works in professions where there are clear alternatives to grades and sheepskins, which is true in tech where companies often decide to hire or not based on a full day of tough programming exercises.
Disparate impact. Colleges degrees are an unprincipled exception to the government rule that any criteria for employment which does not perfectly match the racial and sexual demographics of the population is illegal.
Well the contrarian mind certainly likes to blame Griggs, but do you have any explanation as to why the EU is not the supposed psychometrician's paradise then? Or put normally, how does this explain the proliferation of college degrees outside of the United States, in your opinion?
When I was a young American male, my military obligation interfered with my education. In retrospect, it's hard to decide which was the greater waste (I was not injured or killed). Both were near tragic. Thank God for the "near."
I was successful in school, a failure in the navy. Since both, I've oscillated between these.
Bryan: “Because I disbelieve it (free market in education). It goes against everything I’ve seen. I’ve attended both public and private schools. They’re cut from the same cloth”.
Bryan makes the mistake many do when they believe that, if we had a truly free market in education, the future would be the same as today, with a few private, nonprofit schools competing with public schools. In a truly free market, there would be no public/ government schools. The almost one trillion dollars now spent on government schools would be in the hands of educational consumers (parents), creating a trillion-dollar K-12 educational industry. The schools would be owned and operated mostly by for-profit corporations. These would be like all for-profit companies in every other industry, competing for market share by providing a superior product.
I think some companies, as well as other institutions, sort of do this by taking on volunteers in an "internship". Some are paid a minimal wage, some are not. Students and others do it for the experience. The company can later determine if you are worth hiring at a regular wage.