Bryan Caplan  

Tell Me the Value of a Fake Harvard Diploma

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Our story begins with a 22-year-old high school graduate with a B average.  He knows an unscrupulous nerd who can hack into Harvard's central computer and give him a fake diploma, complete with transcript.  In the U.S. labor market, what is the present discounted value of that fake diploma?

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COMMENTS (29 to date)
Emerson White writes:

I do not have an answer, so perhaps I should keep mum, however... obviously you aren't going to get that lucky.

A case could be made that it's the costly signal that matters most, and that he will not miss any of the things he didn't learn in those 4 years he wasn't in school. However he is at a real disadvantage when it come to networking. A real Harvard grad not only has a flashy signal to potential employers, but they also have at least 100 contacts and acquaintances that also have that signal and are in contact with said graduate.

steve jobs writes:

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Noah Yetter writes:

To a first approximation, zero, because in the real world claimed diplomas are never verified (much less a transcript!). If you want to pretend you have a degree from Harvard, just say you do. It'll work.

(I realize this misses the point, but it's the first thing that came to mind.)

Emerson White writes:

Nice Noah!

OneEyedMan writes:

I don't know what value this person would get from a Harvard degree they wouldn't get from a 3rd tier college. I suspect many people would speak to him and rapidly suspect that something was wrong unless he was an elaborate liar. Their best bet would be to go into a credentialed job, but most of those jobs don't care you went to Harvard.

So how about this. Instead of going into the Army as an enlisted man (who they would train) he takes his fake credential and instead goes to OCS and becomes an officer.

"...the average enlisted salary for soldiers between 0 and 20 years of service is $3,350.10 per month....Using the same methodology as before, the average salary for commissioned officers in the Army is $8,935.80."
Source

Now it is easier to become a higher ranking NCO than an CO, so maybe we really should round, say 4k a month for the first and 8k a month for the second. At a 6% discount rate, that perpetuity is worth about $800k.

My understanding is that the estimated (net of ability and skill formation) lifetime earnings difference of high school and college educated workers is 900k , so this estimate strikes me as too high.

Will writes:

In his first job he'd expect a premium, but get layed off soon. Second job, still a premium, since a first job match can fail, layed of soon. Third job, premium nearly gone (true potential) and then on the right track for his abilities.

A small premium perhaps?

Tyler Cowen writes:

I would say he's paid his marginal revenue product in well under ten years. Some of the possible counterexamples to this are more support for a credentialing model than a signaling model.

Also keep in mind that Harvard is about 1600 students a year and at an extreme of the signaling curve. Looking at a more representative pool, the signaling value of a high school degree is pretty low, see this "gold standard" study: http://www.irs.princeton.edu/pubs/pdfs/557.pdf.

lrobb writes:

Assuming he was able to sneak in to the on-campus recruiting events, land a job, wasn't a complete dolt, and joined a company with an excellent training program?

I would start with the average earning of a Harvard alum compared with the average earnings of a high school grad.

($120 000 * 45yrs) - ($30 000 * 45yrs) = $4 050 000

Alex Godofsky writes:

This doesn't work anymore. He doesn't have any facebook friends at Harvard, and isn't even a member of the group - and if he joined it, everyone he knew would find out.

Jody writes:

Tyler: How is a highschool degree more "representative" of signaling?

If what's being signaled is something that most people do (up to 90% graduate from high school in some areas), then it's not carrying that much information, e.g., see http://en.wikipedia.org/wiki/Self-information, where the information content is log2(1/0.9) = 0.15 bits.

Compare this to the probability of being a college grad (~35%) carries information of about 1.5 bits.

Perhaps we're thinking along the same lines, but representativeness of the general population and effectiveness of signaling should tend to push in opposite directions.

Michael writes:

Depends on what he does with it.

If he applies to some mid-level job that is well below what an average Harvard grad could expect, he would get by, and probably get a premium for it.

For any high-paying job a physical diploma wouldn't be enough to convince anyone.

A Harvard email address might work better.

Floccina writes:

I think that it is very telling that a person could probably audit all the Harvard classes needed to get a degree without enrolling but very few do. (Some classes are even free online.)

Most people act as if the Harvard education is not worth much but that degree is very valuable.

Imagine that people were convinced that Harvard taught some knowledge/secrets that would allow people to live longer and better lives what do you think that they would do? I mean I know people who will deny themselves the pleasure of sugary and salty foods for chance that it will make them live a little longer and healthier lives on the thinnest of evidence but Harvard Grads live considerably longer richer healthier lives. I think that they would find a way to get what is taught at Harvard.

Education is cheap it is credentials that will cost you!

Nathan Smith writes:

The value of a bachelor's degree is estimated at $900,000. I think he could get about that return if he had (a) a bit of skill at bluffing, and (b) was willing to learn, to the best of his mediocre ability, at the jobs he got post-school. A lot of Harvard students get (a) cocky, and/or (b) idealistic, and are willing to forgo potential earnings for the sake of power and prestige or to change the world. Having the degree without the money-rivaling values might be an advantage. And a lot of jobs that Harvard grads end up in leave a lot of their brainpower unused. But the added earnings wouldn't be enough to offset the disutility of being constantly summed up by colleagues as, for a Harvard grad, a little dim.

Fred Stone writes:

I've been involved with engineering interviews for many years. I will assume that the Harvard diploma on the resume is accepted without checking (which is likely and reasonable).

If a recent grad, fake-Harvard will increase the probability of entry for interview. But the interview process will evaluate knowledge and abilities. Fake-Harvard will not help with this at all unless the interviewer is intimidated (possible, not likely, the opposite may happen, the attempt to shoot down and put int place the Harvard grad).

If the interviewee has many years experience, say ten, fake-Harvard is worth almost nothing. We have to assume here that experience on resume is real, only the claim of Harvard is fake. Fake-Harvard is worth almost next to nothing (a slim chance to increase entry).

So fake-Harvard can increase entry, but that's about it. And as Cowen points out, this is a very marginal case. Anecdotal at best. We learn very little from it.

Ben writes:

Is this supposed to be a plug for the new USA Network series Suits?

ross writes:

Not as much as actually attending. Proximity to others matters for making connections and landing a good job. Harvard is as much as a social club as a school. In fact, Harvard does have social clubs in DC and New York.

Michael Church writes:

Drawing on the evolutionary ecology literature, costly signals need only be honest on average to be an evolutionarily stable solution, so the very rare case of a fake degree isn't particularly useful from an analytic standpoint. Determining whether a four-year degree is a costly signal might require a comparison of a Harvard degree versus, say, a University of Arizona degree. It might also require an evaluation of who pays the monetary costs of the degree. If the costs are paid by parents, a high-cost degree says much more about the parents than the offspring.

Silas Barta writes:

@Tyler_Cowen: The discussion is about the impact of college, not high school. A result about high school is not resposive to what your critics are saying, especially given that they generally already agree that the signalling effect (relative to human capital effect) is much smaller for HS.

It's a bit discouraging that you deem that citation so informative on this matter.

siredge writes:

It is my understanding that earnings generally grow as a person shifts from one position to the next, but that most workers only move up in salary as they change positions voluntarily. Assuming that is the case, the first job out of college seems to be very important- someone making $100k per year is on an entirely different growth curve than someone that starts making $60k per year. Something I'm trying to adjust for is whether or not fake-Harvard would be able to provide sufficient value that each employer would continue to increase the salary on the same curve that a regular Harvard grad would be on or whether it would adjust down to non-Harvard levels. I would think that even if some adjustment occurred, fake-Harvard would probably still be better off by a substantial amount during working years, barring unemployment due to the inability to produce value commensurate with salary.

Another point that may be interesting is how much the direct networking matters versus indirect networking. If fake-Harvard approached some older-generation grads and recruited them into his network, he might then be able to arrive at similar opportunities to real-Harvard. If that is true, then I would expect the salary curves to be nearly identical, again barring unemployment.

Finally, it may be the only particularly hard working and social people are successful getting into Harvard and completing the program, so it may be that fake-Harvard would lack the work-ethic/focus that real-Harvard would have even after accounting for networking deficiencies, and therefore fake-Harvard would have a lower salary curve than real-Harvard.

Then again, maybe fake-Harvard would have to develop just those qualities just to pull off this whole scam. Interesting thought exercise, Bryan.

Jason Malloy writes:

"In the U.S. labor market, what is the present discounted value of that fake diploma?"


Assuming he would otherwise get the same degree at a generic college: $400,000:

"... among students of similar aptitude, those who attended the most selective colleges would earn an average of $2.9 million during their careers; those who attended the next most selective colleges would earn $2.8 million; and those who attended all other colleges would average $2.5 million."

If the same people did not attend college that's another 10% reduction ($250,000). So a value of about $650,000 for the fake diploma.

SWH writes:

If the fake degree were in engineering from MIT, then, oddly enough, it is worth less than zero. During or after the interview, the lack of ability of the interviewee would easily be found. He would lose the job and have a record of deceit. The fake degree would not provide the necessary requirements to keep the job if he ever got it. Maybe that's not the case in economics?

Brandon Berg writes:

Is there any research which considers the effect specifically of skills acquired by students in fields of study which do not obviously lead to the development of marketable skills?

That is, I think it's probably pretty uncontroversial that getting a STEM degree is going to lead to the development of marketable skills. And so if we look at the average effect of college education, we're going to see that some of the wage premium is due to skill acquisition.

Which is fine as far as it goes, but what we really want to test is the stronger claim that even fields of study which do not obviously lead to the development of marketable skills nevertheless do improve productivity through some less tangible mechanism.

Andy writes:

It seems to me the big variable is the degree. Are we talking a Harvard Chemistry or pre-law or women's studies or performing arts? Also, there are a limited number of degrees that a high school student might reasonably bluff their way through once they land a job.

mdc writes:

Quite minimal. He can apply for prestigious jobs, will get many interviews, very few job offers and no long-term employment in any of them.

I don't see this as an argument against the signaling model. The signaling model postulates that it's the candidate's underlying intelligence, conscientiousness, etc. that is valuable, and that Harvard degrees are just a proxy indicator of possessing these qualities. When it comes to interview, or on the job performance, it becomes clear that the candidate does not possess them.

Most of the posts claiming a large value are arguing either that he is capable of doing everything someone who got in to Harvard can do anyway (in which case, why couldn't he just get in? - it's postulated at the start he's a mediocre high school student), or just implicitly assume this by comparing to value added for people who actually could get in.

So the education system, under this model, is just an expensive add-on to the shredder in the Human Resources Dept. Once you're in, no one cares anymore - your job performance and previous employers are now your strongest signal. And that's more or less what happens, isn't it?

The same is not necessarily true conversely, btw. For instance, we could ask, what is the marginal loss for someone who successfully gets into Harvard and passes all his classes with a good GPA declining his degree at the end? He presumably will earn more than someone who only graduated HS because that was the best he could do. But he misses a vital link in the signaling chain to a high paid, prestigious job by falling victim to HR's shredder.

PrometheeFeu writes:

That would depend upon how he used that diploma.

In a normal career path, it would have a very high initial value and a rapidly decreasing one. In your first job, showing the diploma gets you the interview and it gets people to listen to you seriously. After your first job, fewer and fewer people care where you went to school and what you studied.

I have my own experience as (admittedly anecdotal) evidence: When I got my green card I decided I wanted to become a software engineer. I had the skills necessary to enter the industry, but my degree was in the wrong field. Getting any interview was incredibly difficult. After failing at 2 interviews during which I learned the standard interview format and another 2 where the skills were not a match (they were using a programming language I just did not know and had no intention of learning it), I got 2 offers. I took one and dutifully updated my resumes and social networking profiles with my new job. Within 6 months, I was getting half a dozen interview invitations a month and that number has since increased. After a year, I switched job to a company affording me the opportunity to work for a higher salary, better benefits and more importantly for a much more innovative company. Of course, my degree was on my resume, but I very clearly remember how when the recruiter called me back to make me the offer, she at that point asked: "You do have an undergraduate degree right?" They cared so little about my $120,000 degree that they checked only after they had made the decision to hire me.

To be fair the market for software engineers is exploding and I may have caught the wave. But I don't think this accounts for the entirety of my experience. I have come to the conclusion that if I had graduated in computer science from MIT, I would probably have made more money at first and gotten interviews much more easily. But every month that passes I believe brings me closer to where I would be if my degree was in the CS field. By my estimate, the difference will be gone in 2-3 years tops.

Vernon L. Smith, Chapman University writes:

If you tell me the value of a fake Harvard degree, I will tell you the value of a real Harvard degree.

Bill writes:

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J writes:

I didn't fake a Harvard diploma, but once, long long ago and far, far away, I needed some specialized credential for a job. This was much before xerox and photoshop were invented, it was done actual photography lab work. I got the job and then was faced by the imperative of delivering. I spent the following months studying 24 hs a day (smoke, coffee, etc,). I survived and concluded that I had worked for that paper on the wall more than if I had earned it bona fide. Conclusion, if you survive with a faked Harvard diploma, you had no need to fake it at all and real Harvard would have been a קייטנה summer camp for you.

Now, to your question, what is the present discounted value of that fake diploma? I dont know, but it is not worth it.

J writes:

I didn't fake a Harvard diploma, but once, long long ago and far, far away, I needed some specialized credential for a job. This was much before xerox and photoshop were invented, it was done actual photography lab work. I got the job and then was faced by the imperative of delivering. I spent the following months studying 24 hs a day (smoke, coffee, etc,). I survived and concluded that I had worked for that paper on the wall more than if I had earned it bona fide. Conclusion, if you survive with a faked Harvard diploma, you had no need to fake it at all and real Harvard would have been a קייטנה summer camp for you.

Now, to your question, what is the present discounted value of that fake diploma? I dont know, but it is not worth it.

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