Bryan Caplan  

Toga! Toga!

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"Excellent."  That's what Tyler calls Noah Smith's effort to salvage the human capital model.  Noah's story: Students learn lots of useful job skills outside of class by socializing together.
[U]seful skills, which you mostly learn on the job, are not the only valuable form of human capital. There are three extremely important forms of human capital that you can't acquire on the job:

1) Motivation,

2) Perspective, and

3) Human networks.
Japan is Noah's cleanest example:
Japanese college basically provides zero additional signal, because A) Japanese college kids do very little work, and B) Japanese employers don't even look at college grades.

[...]

In Japan, college students do mostly party. In fact, that is what you are supposed to do at college, especially at a top school like Tokyo University. It is encouraged. Fun fact: Many Japanese people call college "moratorium". As in, a moratorium on work.
I say that Japanese college students are signaling conformityIf smart, hard-working, ambitious Japanese normally go to college, a smart, hard-working, ambitious Japanese who doesn't go to college signals that he's weird.  In a notoriously conformist society like Japan, signaling conformity is probably even more important than it is in the U.S.

But what's wrong with Noah's story?  Lots.

1. As Alex Tabarrok quipped me this morning, Animal House sure doesn't seem like a story about human capital formation.  The idea that partying ("Toga! Toga!"), drinking, and hooking-up in college substantially improve your job performance for a lifetime is highly implausible.  The burden of proof is on anyone who makes this remarkable claim.

2. If Noah is right, people who flunk out of college should still earn a substantial return as long as they socialized a lot.  Does anyone believe this?

3. If Noah is right, introverts should acquire fewer skills in college, and therefore have lower job performance.  But as far as personality psychologists can tell, this is not true.  While extraversion predicts better performance for managers and salesmen, only conscientiousness predicts job performance in general.

4. If Noah is right, off-campus living should predict lower job performance and lifetime earnings.  Does anyone believe this?

5. Workers "can't" acquire motivation, perspective, or human networks on the job?!  That's absurd; it happens all the time.  And the motivation, perspective, and human networks you acquire on the job are the right kind.  You gain motivation to do laborious, boring real-world jobs, the perspective that makes these jobs tolerable, and human contacts in your actual industry.

6. The motivation, perspective, and human networks you build in college, in contrast, are often useless, if not counter-productive.  College students today do very little work.  How does that give them "motivation" or "perspective" for the jobs they're actually likely to get?  And the friends they make are unlikely to end up working in the same industry.

7. Finally, suppose Noah is completely right.  His story and the signaling model actually share a key implication: The private return to education exceeds the social return.  If college raises the productivity of promising young people by segregating them from other kids their age, it simultaneously reduces the productivity of less-promising young people by depriving them of peers they ought to be emulating.  If socializing with college students gives you good motivation, good perspective, and good human networks, then socializing with drop-outs should give you bad motivation, bad perspective, and bad human networks.  Why on earth is this social stratification something taxpayers ought to be subsidizing?


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COMMENTS (14 to date)
Alex writes:

Yes, the much cleaner story is obviously that the fun aspects of college are consumption: what you do when you don't have to work.

Steve S writes:

As a recent college grad (2007) the idea that college gives you "perspective" is laughable at best, and a downright lie at worst.

Ask someone fresh out of college about their career aspirations, their long-term goals, and how they hope to achieve them. The answer won't sound too far off from grade school dreams of being "an astronaut president lawyer".

In my 5 short post-grad years - working in manufacturing - I have been bludgeoned over the head with the reality that "work" is difficult, messy, and sometimes mundane. Not that it is unimportant or unnecessary, but it is not so clean cut as universities would like you to believe.

I am still amazed at how stupid I probably sounded during my first round of interviews for jobs during my senior year...

Jim Glass writes:
There are three extremely important forms of human capital that you can't acquire on the job: 1) Motivation, 2) Perspective, and 3) Human networks .
I am rather flabbergasted to read such a claim.

What person who is even moderately successful in the private sector doesn't gain all three of these from the job? Especially "perspective" and "human networks". (To the extent motivation is an inborn character trait it may not be much gained on the job -- but I sure don't see it being any more gained in college.)

I personally obtained about 0% of my "perspective" and 15% of my human networks in college, only a little bit more of each in law school, and the great bulk of both during my working years.

This is the sort of comment that strikes one as having had to have come from the imaginings of a lifetime academic who's never had a private sector job.

IVV writes:

I believe that perspective is important depending on where you come from.

I came from rural California, and I can guarantee that I had no concept of much of the way the world worked, outside maybe growing stuff and being a miscreant. College was the first place that I met with and mingled with people at similar intelligence levels to me and with people who only knew the city. I realized I didn't even know anything about suburbia.

Admittedly, after leaving college, I still had no concept of how to function in an office world. It didn't exist at home, and it didn't exist at college. However, the breadth of the possibility of ideas would never have been introduced to me if I had somehow skipped my college years.

English Professor writes:

Several points:

--Much of what Noah talks about sounds to me like signaling anyway. Students don't learn "motivation" in college, they demonstrate that they can finish a program.

--I think a distinction should be made between "human capital" and "social capital." Students in chemistry, engineering, accounting, and so forth, increase real human capital--they learn things that allow them to do particular jobs when they graduate. But networking and (especially) attendance at a posh school--a Stanford or a Princeton--provides social capital: it can give a person access to people with power or influence. This can be a huge help in starting off, but it is a very different thing from knowing how to build a bridge or synthesize a chemical compound. And social capital goes hand-in-hand with signaling.

--Students in my own field (English lit) may learn to write better (which is an element of human capital), but some learn only the obfuscations of modern literary theory, with its tendency to cause students to write less clearly than they would otherwise. Some students deepen their appreciation of literature, which can enrich their lives. To me at least, that is an increase in human capital, but one that is unlikely to translate into work-place skills.

--As for "perspective," I don't think many students develop that in college. Arnold Kling is closer to the mark with his point about class identity, and class identity is directly tied to the idea of social capital. Finishing college signals to family, friends, and employers that you're a certain kind of person who (probably) thinks about things in an approved way.

Glen Smith writes:

Jim Glass,

Me and almost college student I know. Know very few successful college types who did not learn those skills while in college. Yes, we developed the skills we leaned in our post-college years but they were planted and nurtured in their college years.

David P writes:

I remember years ago, on a Monster.com newsletter--or something to that effect--I saw a statistic about how only 25% of college graduates work in the field they got their degree. I wonder if % of people with a degree and/or from a specific school working in their field of study would be a good indicator of how much a degree in a specific field of study is a signal and how much is about acquired skills (I would imagine that fields like accounting and physics would have a higher % of people doing what they studied where fields like English would have a lower %. Then again it may just be that it's harder to measure what constitutes "in their field" for something like English.)

Jack writes:

Don't forget assortative mating: I'm sure many parents push for their kids to go to college (and especially overpriced colleges) so they can mingle and eventually marry other educated and career-minded kids from well-to-do families (or at least, families who signal it!)

John Fast writes:

As seems to be common, Mr. Smith has missed the mark yet again.

He talks about three different types of human capital -- motivation, perspective, and human networks. First, common sense and experience tell us that college doesn't seem to help much with the first two. However, I will agree with him that colleges -- at least Ivy League and other Establishment institutions -- provide people with connections. This is an unfair advantage which perpetuates the klass structure of Amerikan society.

As a good progressive, that's one reason I want to tear down our current system of educational subsidies for uber-rich institutions, and (as Bryan suggests, and as egalitarian maven Bruce Ackerman suggested decades ago) we should actually be taxing education, rather than subsidizing it.

My own challenge for those who think that higher education actually teaches anything useful is to ask how many prospective employers care about one's grades in college, as opposed to the institution one attended.

Bryan Willman writes:

Have all of colleges really gone to hell in a hand basket in the last 30 years?

Students do "very little work"? OK, the surveys do seem to show that.

Oddly, one of the things I learned in college was how to continue to make good technical decisions after working so long I was seriously sleep deprived - to the point of being physically ill. This does not happen in 14 hours a week - more like 140...

Let me suggest the following experiment - in the early 1980s, when students in technical fields went home for holiday break, we all mostly slept. Because we were all totally exhausted from a semester of 100+ hour weeks.

Do modern students go home feeling just fine thank you? That would be telling...

[And of course, the debate continues to be about "college", lumping 3rd Rate State and Cal Tech into the same class of discussion.... A more discriminating approach is in order.]

JKB writes:

College seems an inefficient way to achieve those forms of human capital. Perhaps, 'semester at boot camp' would be a quicker way to impart motivation, perspective and tight-knit human networks? And for those wanting the greatest benefit, 'semester in combat'.

Pandaemoni writes:

Re the Animal House quip:

John "Bluto" Blutarsky went on to become a United States Senator in Animal House. If you don't think having a Senator as a former frat brother makes you more valuable to your employer, then you've had the luck of never working in a highly regulated industry.

Particularly with fraternities, the connections you make can open doors for a lifetime.

B.B. writes:

Networks? Yes.

Our recent presidents or almost presidents: Ford, Bush 1, Clinton, Kerry, and Bush 2 all came from Yale. Gore, Obama, Romney had Harvard.

Do you think they are all great geniuses who studied very, very hard?

The point of Harvard and Yale is that they screen students who have the potential to lead, and then put them together to network.

There are lots of smarter and harder working kids who don't get into Harvard or Yale but wouldn't become presidents if they did. At the same time, those guys wouldn't have approached the presidency if they ended up schooling at Penn State.

Colleges screen AND promote networking. It is a synergy.

Clinton hired his school buddies when he got to the presidency. He was very good at networking, and those who networked with him in school got a payoff. The schools get a payoff also. By help making people rich and powerful, they get the benefits of friends in high places.

Ted Craig writes:

Prior to the college boom following WWII, there were other entities that provided networking. For example, seven presidents in the 20th century belonged to the Fraternal Order of Eagles. This group includes three Harvard grads and our only modern president without a college degree.

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