College average is over

Concord University in West Virginia and Clemson University in South Carolina were both founded shortly after the Civil War. During the 20th century, each grew rapidly. Now, the two public universities that sit just 300 miles apart face very different circumstances.

Clemson, a large research university, enrolled its largest-ever freshman class in 2017 and in December broke ground on an $87 million building for the college of business.

Concord, a midsize liberal-arts school, has seen its freshman enrollment fall 19% in five years. It has burned through all $12 million in its reserves and can’t afford to tear down two mostly empty dormitories…

According to an analysis of 20 years of freshman-enrollment data at 1,040 of the 1,052 schools listed in The Wall Street Journal/Times Higher Education ranking, U.S. not-for-profit colleges and universities are segregating into winners and losers—with winners growing and expanding and losers seeing the first signs of a death spiral.

The Journal ranking, which includes most major public and private colleges with more than 1,000 students, focused on how well a college prepares students for life after graduation. The analysis found that the closer to the bottom of the ranking a school was, the more likely its enrollment was shrinking.

That is from Douglas Belkin at the WSJ, via multiple MR readers, some of them excellent.

Many of you have asked me for further commentary on Bryan Caplan’s education book, which is doing very well.  I’ll be doing a Conversation with Bryan, but for the time being I’ll say this: everyone obsesses over the mood-affiliated “I’m going to lower the status of education signaling argument.”  Hardly anyone has discussed what to me is Bryan’s strangest assumption, namely a sociologically-rooted, actually anti-economics “conformity is stronger than you think” argument, which Bryan uses to assert the status quo will continue more or less indefinitely.  It won’t.  To the extent Bryan is correct (and that you can debate, but at least he is more correct than most people in the educational establishment will let on), competency-based learning and changes in employer behavior will in fact bring about a new equilibrium…not quickly, but certainly in well under two decades.

And what about on-line education?  Well, a lot of students don’t like it because they have to actually work on their own and pay attention.  To the extent education really is just signaling, that should give on-line options a brighter future all the more.  But not in the Caplanian world view, as conformity serves once again as an intervening factor.  For better or worse, Bryan’s book subverts economics as a science at least as much as it does education.  Bryan of course is smart enough to see the trade-offs here, and he knows if the standard model of economic competition were allowed to reign supreme, we would (even with subsidies, relative to those subsidies) tend to see strong moves toward relatively efficient means of signaling, if only through changes in the relative sizes of institutions.


Clemson, of course, has a much better football team.

So does WVU Morgantown, which does not seem to be hurting for funding or students.

Education is a science? Heaven help us all.

I reckon Cowan wouldn't know a soft landing if he fell from a plain and landed in a snowy mountain peak.

"Hardly anyone has discussed what to me is Bryan’s strangest assumption, namely a sociologically-rooted, actually anti-economics “conformity is stronger than you think” argument, which Bryan uses to assert the status quo will continue more or less indefinitely.  It won’t.  To the extent Bryan is correct (and that you can debate, but at least he is more correct than most people in the educational establishment will let on), competency-based learning and changes in employer behavior will in fact bring about a new equilibrium…not quickly, but certainly in well under two decades."

I'd be interested in learning more about this equilibrium. Bryan's a fan of betting, you guys should make a bet on it.

" a new equilibrium…not quickly, but certainly in well under 2 decades."

I'll take the bet against that happening in "certainly well under 2 decades." And if TC is so certain, how about a less ambiguous phrase than "well under."

"Baby" (2004), by Melody Club from Face the Music
"Baby" (Ashanti song) (2002), from Ashanti
"Baby" (Brandy song) (1994), from Brandy
"Baby" (Fabolous song) (2005), from Real Talk
"Baby" (Justin Bieber song) (2010), from My World 2.0
"Baby" (LL Cool J song) (2008), from Exit 13
"Baby" (Wilma Burgess song) (1965), from Don't Touch Me
"Baby" (2007), by Pnau from Pnau
"Baby (You've Got What It Takes)" (1960), by Dinah Washington and Brook Benton from The Two of Us
"The Baby" (2003), by Blake Shelton from The Dreamer
"B-A-B-Y" (1966), by Carla Thomas from Carla
"Babies" (song) (1992), by Pulp from His 'n' Hers
"Baby" (2009), by Alcazar from Disco Defenders
"Baby" (2007), by Angie Stone from The Art of Love & War
"Baby" (1968), by Caetano Veloso and Gal Costa from Tropicalia: ou Panis et Circenses
"Baby" (2013), by Exo from XOXO
"Baby" (2001), B side single by Kylie Minogue from "Love at First Sight"
"Baby" (2007), by Serj Tankian from Elect the Dead
"Baby" (2006), by Tenacious D from The Pick of Destiny
"Baby" (2013), by Eminem from the deluxe version of The Marshall Mathers LP 2

"Darling", by Dirk Bogarde, J. Dankworth and G. Lees (1965)
"Darlin'" (Poacher song)
"Darlin'" (The Beach Boys song) (1967)
"Darling" (Girl's Day song) (2014)
"Darling" (Eyes Set to Kill song) (2009)
"Darling", by Baccara Soja, Dostal (1978)
"Darling", by Cindy & Bert (1979)
"Darling", by Nazar (band), the Turkish entry in Eurovision (1978)
"Darling", by Sons and Daughters (band) (2008)
"Darling", by Stories (band) (1973)
"Darling", by Japanese boy band V6 (band) (2003)
"Darlin", by Avril Lavigne from her album Goodbye Lullaby
"Darlin'", by Backstreet Boys from their eponymous album
"Darling", by Golden Earring from their album Paradise in Distress
"Oh! Darling", a song by The Beatles from Abbey Road

Doesn't economics say that colleges like Concord are just charging too much money?

And the dorms could be converted to apartments.

There are so many grad students looking for jobs, Corcord should be able to fill all faculty spots even at a lower wage. It will have to slash administrative overhead and cut useless departments.

Maybe it should sell itself to the state government and be a state college.

Does price cutting work in college competition? If not, I want to see an analysis that tells me why the education market is different.

I suppose the Caplan signalling model says that price cutting would attract a different sort of student, and the result is that the college diploma would not send a favorable signal.

The federal financial aid system makes the market much less responsive to price, as the amount students pay is based more on a formula that assesses what they can afford than the actual listed tuition.

This also incentivizes colleges to increase amenities to attract more students that bring financial aid dollars with them, rather than cutting prices.

Colleges are very expensive to operate, in part because of the above effects, so there is a limit to how low they can set their price. However, to a certain extent they already do lower prices compared to their advertised rates (and engage in price discrimination) by offering their own need- and merit-based financial aid.

Another factor is that most rely in part on donation income, and the kind of cost cutting you describe would probably not result in a reputation that attracted donors.

What you describe -- "the amount students pay is based more on a formula that assesses what they afford than the actual listed tuition" -- has another name: Shakedown. Colleges ARE very expensive to operate and tend to become more so as more Pell and loan money becomes available.

The number of administrators employed at one department of one of my almae matres tripled between 1995 and 2015, and has continued to grow apace. The number of faculty and the number of students is unchanged (but more courses than ever are taught by adjuncts). This increase in the bureaucracy also occurred during a period when private companies used IT to strip out whole swaths and tiers of G and A spending. Hard to justify, and alumni are justifiably losing interest in making further contributions.

For a college that is brave enough to give it a try, cutting bureaucratic lard by 50 to 75 percent and, with it, tuition rates might prove to be a winning formula. Traditional institutions are not known for innovation, alas. But we can hope.

>the two public universities that sit just 300 miles apart

Really? It's just an insignificant 5-hour drive from one to the other?

Aren't there zoning laws that prevent people from building colleges this close to each other?

Hahaha, thank you. There is at least a slight difference between middle-of-nowhere WV and Clemson, SC. I live in WV and I had to Google where Concord is located (it's between Beckley and Princeton, not that that helps anyone outside the state locate it). Wake Forest is also a liberal arts college, and it is a lot closer to Clemson; how is WFU doing in the current education climate? My guess would be: significantly better than Concord.

Wake Forest is a small research university, not a liberal arts college. Greater Winston-Salem is also 4x as populous as Huntington or Charleston. North Carolina is economically dynamic. West Virginia is more affluent in relation to the whole than it was in the past, but has the same population it did 80 years ago and has the country's most troubled labor market to boot.

"competency-based learning and changes in employer behavior will in fact bring about a new equilibrium…not quickly, but certainly in well under two decades."

Are you willing to tie this to specific observable characteristics of higher education? I think there is a bet to be had here, sir.

Separate from any bet offered: I think that much (most? Dunno how to quantify it) of the challenge facing small, not terribly selective private colleges has to do with the decline in the number of 18-22 year olds relative to 5-10 years ago in the US, combined with increased ability sorting relative to, say, 20 years ago.

With respect to your first point, coding boot camps would appear to be a perfect example:

If anything, Tyler may be overly optimistic. True, a lot of coding boot camp enrollees are recent college graduates without the funds for graduate school, but you can see where this is going. Skills training offers potential employers that undergraduate doesn’t. In the next 5-10 years as personnel office incumbents age out, line managers will face less resistance to alternative credentials and be able to hire more individuals with demonstrated skills.

Still have to get past Griggs vs. Duke Power to hire on skill and ability. Not sure outsourcing that testing.sele Timon function to a “boot camp” equivalent for certification will get around that. Any labor lawyers care to comment?

There are already lots of domain-specific certifications in tech that are considered in hiring. I don't see how a coding boot camp would be problematic.

As someone who hires developers, I would say that a degree in the field is a really bad way of measuring coding ability, at least relative to the time and cost taken to obtain the degree. I have little doubt that a better measure could be devised rather easily.

But would your HR process allow you to hire an applicant with no college but a boot camp certificate and/or your own aptitude test, or is the choice between degree and degree + boot camp?

I want to create a conscientious app.

It would assign random tasks to you during certain time windows. If you complete them, you get a rating.

Example: your phone needs to be located at a specific intersection at 8:00 am sharp.

Take a photo of a Doritos bag between 11:00 am and 11:30.

The idea would be to show that you can actually do tasks in a timely manner. After 6 months you'd have a pretty decent "rating" to show employers.

That would be an excellent signal of ability. I would hire you.

The users of your app, not so much.

@Harun - Sounds like a good app, I might even research patenting it if I was you (you can search online for prior art at the US PTO website). Remember you have one year after a public disclosure (namely, starting at Feb. 22, assuming you've not publicly disclosed it elsewhere) to file and maintain your US patent rights. For foreign rights, which are not as important, you've probably lost them already (in most countries you must file before a public disclosure). As for the cost of a patent, if you do it yourself, which is not hard albeit time consuming and you're almost guaranteed to get a rejection for your claims the first round, as the US PTO has a policy of being anti-patent no matter how worthy your invention is (stupid, IMO), you can finish for less than about $1k or so in government fees (not looked at the fee schedule in detail, but they do have a 'micro-entity' reduced fee schedule for small guys). As for making money off your patent, if anybody does your invention, and I actually do see (in my mind) promise, within the next 20 years, you can easily recoup your money. Even Google was paying about (from memory) $25k USD or so for every patent, regardless of the breath of the claims.

Bonus trivia: in my ideal world, any inventor would not have to do any of the above, you would get an automatic patent placeholder, like you do in US copyright law already, just for public discourse of your idea; damages and royalties would wait until you file an application, and for many ideas you would have to build an actual prototype or have a detailed written description rather than saying simply 'my invention is to fly to the moon' in words, which any fool can do but few have the wisdom to describe in detail.

@Harun @Senor Lopez
Why don't you provide some angel capital for Mr. Harun to develop his app? Also, I would think that if you want to rate people on conscientiousness, you can already do that from Facebook data, or if you wanted, the data from how people use a meditation app would probably work as well. Exercise apps would likely also be good for this too.

@P Burgos - I never take a stake in any invention I consult for. That includes a multi-multi-million dollar product found in many homes these days that I got in on the ground floor and was instrumental in developing. I've made for my clients something well over several billion dollars in new sale revenues I estimate.

Besides, I am investing in the Philippines (indirectly, since they have citizenship minimum 51% majority partner requirements that you have to be mindful of) now. The rate of return for simple stuff like buying a truck and leasing it out is incredible--about a 2 year payback. No wonder the Saudis wanted to pull investments from the USA and invest in SE Asia (from a Bloomberg TV blurb).

How is it that returns are so high in the Philippines?

Engineer gets it.

After Griggs employers have been scared out of their minds. We do non rational things assuming that if we stay with the herd we will be safe. Trying something different simply means legal liability. Bad policy leads top bad results, but that's liberals for you!

This is wildly overblown in my experience, the Duke vs Griggs case.

You can give aptitude tests. I’ve worked for companies that have their own weird case study version of the SAT. There’s nothing remotely illegal about this.

Manufacturing companies I’ve worked with regularly give mechanical aptitude tests. They are not even remotely controversial.

It’s only controversial in rent seeking positions: fire department, police, federal agencies, utilities....

You can sit a candidate down and make them do programming, give them a case study, make them solve a SQL database structure question, make them write VBA macros....

This is standard practice in my industry. Great you went to a top school. Now show me you understand business strategy, SQL, presentation, P&L statements, and advanced data analytics.

"There’s nothing remotely illegal about this
It's not illegal. It is just costly, wasted cost, to defend a test against the inevitable lawsuits regardless of whether you win or not. That cost can be the difference between making a profit and bankruptcy for a small firm.

Software has a relatively interesting property among labor markets in that not only is your top talent 10-100 times more productive than your average talent, but your subpar talent has negative marginal product. In this circumstance, you do aptitude even if it is illegal because it’s cheaper to settle lawsuits than to make bad hires.

Other industries not so much.

Here is Kiplinger's list of 300 colleges ranked according to best value: Princeton ranks at the top. Follow the list down to the bottom. Maybe self-loathing is rational.

A good point, but I'm still not convinced. I doubt that it's really Clemson's success in preparing young people to face the world that caused their relative prosperity. I think it's more likely that they made market-positioning bets that ultimately worked out well. For example, they developed a brand tied closely to their football team, which happened to have won some key games. This kind of thing may drive enrollment and bring in money in a virtuous spiral, but it's hardly evidence that the market is rewarding them *for effectively educating students*.

The correlation with "preparing students better for life after college" is so full of confounders it's basically worthless. Thriving schools attract better students, and we should expect them to do better on average after college is over. And even if you could show that thriving colleges add more value to a student's portfolio of valuable skills and traits, I would still doubt that this is what's *causing* the college to thrive. For one thing, survey the customers and measure just how much clue they have about which schools add the most value. (They don't. Even crap schools produce brochures that leave the impression that their campus is a perpetual Dead Poet's Society.) Second, schools whose investments generated returns probably do have some extra money to spend on things that help: They attract better hires with better morale. But again, it's not their effectiveness which causes their wealth. Any extra effectiveness is a predictable epiphenomenal consequence of rich schools getting richer.

You make a good point: people who like to be associated with winning programs, and who know about college football (which is a big thing in the South), are more likely to pick Clemson than Concord. And people who like to win are, on average, more successful than people who are indifferent to it.

Great post. Average is over. So we each need to have a personal brand. Nobody cares what high school you went to or whether you were President of the high school Chess Club. Going to Clemson is a first step in developing a personal brand.

or does your college market well overseas?

A half empty college anywhere should be able to go to China and trawl for the slacker kids of rich families and be full in no time.

Someone isn't marketing correctly.

The Clemson brand transcends the football team. Because we weren’t always very good (2012 graduate). If anything Dabo Sweeney adapted the school’s brand to the football team.

The brand can be summed up as “There is something in these hills”, which is the key line from a poem an old graduate wrote about Clemson. The school dominates the town of Clemson, and it’s very isolated. So it is the ultimate college bubble where you go to learn and meet people, etc. with a conservative bent given the demographics. How many other schools could keep key buildings named after Ben Tillman and Strom Thurmond?

As for the schooling, I can only attest for my chemical engineering degree. I was incredibly prepared to work in a traditional chemical manufacturing plant, and that was the focus. Not grad school or masters programs. They took the land grant mission pretty seriously.

You also missed that Clemson is one of the best schools at gaming US News and World Report. They ruthlessly game the stats to raise their ranking and play hard enough that the other southeast schools in their peer group complain incessantly about it.

Though football plays an important role in marketing Clemson to the region, the university (and football attendance) was doing fine before Dabo showed up. It doesn't hurt that Clemson is an easy drive from Atlanta, Charlotte, and Columbia.

Online education is absolutely amazing in quality, right now. I am not talking about the MOOCs, or about recorded lectures - those aren't all that game-changing. But the ability to learn something from purely internet sources if you are smart and motivated has never been higher. As a software engineering manager, I have seen more and more people recently who are self-taught and you can tell from testing their skills they are just as good as a Harvard graduate. I think there is a large number of 18-year-olds who could just skip college and be making a six-figure job at the Googles and Facebooks of the world. Going to college, even a top notch college, is costing them half a million bucks.

> I think there is a large number of 18-year-olds who could just skip college and be making a six-figure job at the Googles and Facebooks of the world.

Getting an engineering job at Google or Facebook requires a minimum cognitive floor of 130 IQ. At two standard deviations that limits it to 2.2% of the population. Intro computer science courses have dropout rates exceeding 50%. So it's fair to say that 18 year olds trying to self-teach will have at least the same attrition rate. (Plus most of these positions require a lot more than just the intro course.) Down to 1%. For better or worse, and whatever the reason, very few girls have the desire to become software engineers. Down to 0.5%.

Now you're talking about the extreme right end of the bell curve in terms of intelligence, motivation and self-direction. In short, these are kids with *a lot* of options on the table. They could easily become doctors, wall street bankers, high-end lawyers, (non software) engineers, or any other variety of high-status, high-paying professions. Many of them are going to be offered generous scholarships to at least in-state schools. Plus many won't want to miss out on the college experience. I think it's fair to say that at least, at least while this high school to Facebook program is new, untested and weird, at least three quarters of those offered are going to choose the traditional route. Down to 0.0125%.

So with 3.7 million kids graduating high school per year in America, you're talking about five thousand candidates a year. That's not exactly a large number, considering that Google alone employs 75 thousand people.

What makes you think that 130 IQ students would drop out?

What makes you think that 130 IQ women would drop out?

Online education is for the few who are looking to improve their human capital. The biggest threat to the education cartel from online education is to their continuing education moneymakers. Of course, if employers start seeing real gains to employees who improve themselves online, they may start looking at uncredentialed individuals with online competencies.

And online education won't really take off until someone breaks the current "filming the stage play" format. It's happening outside the academy on Youtube.

@Kevin - Yes but a Harvard or even better a Carnegie Mellon software engineer can tell you why the algorithm they are using works so well, in "Big-Oh" notation, that's worth something?!

"And what about on-line education? Well, a lot of students don’t like it because they have to actually work on their own and pay attention. To the extent education really is just signaling, that should give on-line options a brighter future all the more."

This comment confuses me. If on-line education is disliked because it requires actual work and attention from the students and if education really is just signaling, why then is on-line education's future all the brighter? If it's all signal, wouldn't students want their educational credential for the least effort possible? What am I misunderstanding? I suppose some subset of on-line education options could require much less effort and attention and so maybe students would gravitate towards those options. Is that the point being made?

I believe the argument is that completing an on-line program would signal that the graduate is willing to work and pay attention. I disagree with the premise that online graduates are seen as more hardworking and independent than traditional graduates, at least currently, but maybe that will be the case at some point.

Basically, if education really is just signalling, then the harder a program is to complete, the more valuable that program should be. I actually think that's true. For example, STEM graduates are often recruited in non-STEM areas probably in part because graduating from a STEM program is seen as more difficult than graduating from non-STEM. For example, management consulting firms hire STEM PhDs at pretty much the same incoming level as MBAs even though MBA graduates have been ostensibly accumulating human capital specific to management.

I disagree that online programs are currently seen as hard to complete. However, if a program had tough admissions criteria and was viewed as difficult to complete unless one was smart, hard working, persistent, etc., then it might very well displace traditional education as a strong signaller, especially if traditional education became so watered down that it stopped being a good differentiator.

He's saying that because online education requires self-motivation, discipline, etc. that the signal for completing an online education should be stronger than a signal from a traditional education because those skills are not needed to the same degree in a traditional educational environment.

This does not seem to be the case though (yet?).

There is a stigma to on-line - often it signals someone who couldn't figure out "real" college, but if you think about that for a moment, that is pure signalling.

If we randomly assigned people on-line or IRL college, that would disappear completely.

10 years ago, maybe. Our company of 500+ has dozens of capable people who have completed their degrees online at reputable schools. Most programs today don't even indicate that it is "online".

BC and Sean - Both of your replies make sense and are much appreciated.

I think the bigger issue with the on-line education rebuttal is it shows Tyler falling prey to mood-affiliation himself. In my time as a student and lecturer, I've found the "slacker students" to be the ones more fond of online courses as they are typically no where near as rigorous... but of course that could be my own anecdotal experience. Or maybe it's a case of illusory superiority with MRU.

Online courses aren't nearly as rigorous? Have you seen the online degrees offered at top universities? If you were to say that many students started a course and then faded I could understand...lots of ghost students in online courses

I don't think focusing on the right tail of the distribution is beneficial. I'm certain that Caplan isn't.

The model which seems to be failing in the marketplace is a small community of scholars who teach and mentor young people. The model that seems to be succeeding is a distinctive corporate brand which invites students to come and teach each other while some scholars pursue publicity, prestige and grants to raise the status of the brand.

This makes sense if you think of universities as being part of a prestige-industrial complex that serves our intense, simian desires to belong to a tribe and earn status/prestige. New models of education can arise to serve employers' and workers' needs for skill-building and signalling without disrupting the prestige-industrial complex at all. Actually I'm not sure that I see much relationship between the two markets.

West Virginia's system of public colleges is one of the country's most overbuilt. Their baccalaureate granting institutions had a fall enrollment of about 62,000 FTE in 2015. Given the size of the state's college age population compared to the whole of the nation's, given the number of degrees awarded nationwide, and given West Virginia's level of affluence, an enrollment of about 32,000 in the state's colleges and universities might be about right, with another 2,000 or so granted scholarships to study for graduate and professional degrees in neighboring states. Getting from here to there would require a 20% cut in enrollment and staffing at Marshall University and West Virginia University and closing the rest outright.

Shouldn't students in South Carolina go to West Virginia for college?

Clemson in-state tuition and fees: $14,708
Concord non-resident tuition and fees $16,654.00, with a tuition reduction program cutting it to $12,654.00

Certainly no non-resident of South Carolina would pick Clemson at a price of $34,590

Or maybe Clemson is signalling higher quality by setting higher prices, and Concord would grow faster by hiking it's tuition to match Clemson?

Clemson is 2/3 in state kids, 1/3 out. I got in state tuition based on my test scores. Don’t know if they still do that but it was a pretty great incentive. Then they can use the out of state population to keep funding up or raise the quality of the student body.

Colleges are country clubs. They have little to do with education.

Really? How many college students have golf as a hobby? Clubhouse luncheons?

Drinking is their hobby

Sitting around, self indulgently shooting the s*** is as integral a part of country club participation as anything. And there are plenty of college majors that do just that. Such departments will tack on some paper writing requirements and request a little bit of citation work, but just enough for the veneer of learnedness.

Golf is a major. Plus it is an NCAA sport so they have to give people scholarships and name streets after Harvey Penick. And the overall cost makes that clubhouse look cheap.

"he knows if the standard model of economic competition were allowed to reign supreme, we would (even with subsidies, relative to those subsidies) tend to see strong moves toward relatively efficient means of signaling,"

Apart from subsidies, what is different between the status quo for colleges and the standard model of economic competition? The differences I can think of- large state owned portion, certification, etc- don't seem like they would be the issue.

Having worked on-and-off as a university prof in I-O psychology, and having read some of the literature on the issue, I am inclined to believe the skills hypothesis, namely that already higher skilled individuals pursue advanced education more than the lesser skilled, and those individuals with already higher human capital achieve more regardless of education at those higher levels. Evidence supporting this hypothesis is that those that could have entered the most prestigious educational institutions, but did not, or were on the cusp of being accepted and went to a lesser prestigious one, actually achieve the same level of post-educational achievement that those that actually graduate from those more prestigious educational institutions. The question remains whether those who are already highly skilled prior to higher level education actually do reap more "real" benefits (e.g. not "signalling" benefits) of being exposed to higher than the lesser skilled ones. Might be evidence available now for this, but I haven't searched for it. Anyone?

The Pareto principle supports conformity. College is more than just signaling. It is serves to motivate people to engage in education and sustain an environment of learning. I feel education is failing because it is just signaling and not keeping people engaged in the education system. Malcolm Gladwell's 10,000 rule say if people are kept engaged long enough they become an asset: human capital. Education is no longer just for the elites. Its for the masses now but the current system has not adapted to the masses. It still just serves just the elites. For the good of America, our colleges need to keep more people engage in education. I'm not talking about lowering standards. I'm saying for the masses a social service component is needed.

"Education" is a vague term.

Malcolm Gladwell’s 10,000 rule say if people are kept engaged long enough they become an asset: human capital.

Same. 10,000 hours of what? Studying or practicing what?

Signaling is the same thing as branding. Is it a surprise that individual students spend up to $0.5 million to beef up their brand? The ROI for elite schools is still pretty high.

College is about branding, but online education actually benefits larger and/or more credible college brands. Profs already put their lectures online so students can catch the lecture at their leisure. That will allow bigger schools to expand enrollment and/or cut costs without eroding their brand - it improves economies of scale and scope. Private schools with strong brands also benefit, because they can still be selective. Start-up online schools have a long road ahead of them to build a credible brand that will attract strong students.

Seems like a reflection in the wider reduction in liberal arts colleges. Slowly, the market is realizing that many liberal arts majors aren’t worth a tremendous amount, and enrollment is falling.

Those that are interested in liberal arts seem to be turning to community colleges.

The current system will continue because corporate recruiters don't want to spend lots of time/money to develop their own sorting mechanism. For most jobs where you don't have a portfolio of work you can show a recruiter, how should they prioritize which applicants to pursue? I can't see any HR team wanting to spend the time and effort at evaluating thousands of new online universities when they have plenty of offline ones that have produced good enough candidates.

Hiring is hard and very competitive in some fields, so it would depend on the company. But in general as long as the government effectively bans IQ testing, and is willing to sort candidates in a more comprehensive and far far more expensive way, employers will take the free money.

Does the government really bans IQ testing for employee selection?

I worked in an office 25 years ago that gave prospective employees a brief written examination meant to screen out dyslexics, the reason being that those hired for record control positions would be reading strings of numbers all day. The compliance people in legal affairs insisted in 1993 that we eliminate the test.

IQ tests indirectly discriminate by race, so the govt requires that you prove the tests correlate with performance in the specific role you are hiring for (or something like that, I am not a lawyer). Because this means doing a study and having very expensive lawyers do compliance work, in practice it amounts to a ban unless you are Facegooglsoft.

Is IQ testing even that helpful in hiring, or is it the least-bad option? Possibly in certain careers it would be very predictive.

An easy way to check would be to see if employers use IQ tests in countries without restrictions on the practice. I don't know, but perhaps somebody else could chime in.

(of course we are talking about jobs that do not require a college degree; since having one means you already passed a very expensive test of conscientiousness and, depending on the major, intelligence, there is less incentive for the employer to retest you)

Many won't because of inertia. However, if college education is as overvalued as a lot of evidence suggests, those companies that choose to do so will real a huge benefit in more efficiently acquiring talent.

Also, there is likely to be a tipping point effect here. Right now the pool of smart, motivated people who don't attend college is fairly small because options are limited without a degree. Once viable alternative paths open up, many more people will choose to forgo college. This will in turn weaken the signaling value of a degree, and probably cause many institutions to collapse.

Today a college education is meant to increase one's chances at "good" employment, whatever that is, and a greater income as an employee. Businesses are expected to buy or lease their own land on which to operate, construct their own facilities, buy their capital equipment an so on. At the same time, they don't have a responsibility to educate or pay for the education of the people that will be working for them. Why should this be? Why aren't businesses expected to scour the youthful population for those most likely to succeed in their business and then educate them? In fact, some businesses do. Union construction trades filter applicants for their apprenticeship programs, pick the ones most likely to succeed and then give them an education, and a paying job.

A strong argument for signalling is that in China, they basically think any old US school is good, beyond the top tiers they may have heard of.

If Concord isn't full of Chinese students, then they need a new marketing department.

And Chinese parents ARE cost conscious.

BTW, if you ever want to see someone tremble, have a foreigner interview a Chinese candidate who attended a US school.

I've interviewed kids with degrees who could barely speak English at all. These were people with marketing degrees.

"Well, a lot of students don’t like [online education] because they have to actually work on their own and pay attention."

All students have to "actually work" to learn. Consider, calculus or learning to play the piano. No one learns without pain and frustration and genuine work.

Online education simply fails to motivate and retain normal students. The perfect analogy is to compare an online calculus class those exercise/fitness DVD sets (or Internet videos). People are motivated to exercise, they buy a set of DVDs, or subscribe to a set of Internet videos, but most normal people don't stick with it.

This is a solvable problem. Standardized academics, like calc, can be taught to large numbers of students without the baggage, inefficiencies, and politics of legacy higher-ed. But such a system can't just dump video lectures online, it needs to give students normal human motivational factors like human peers, human guides/tutors/facilitators, and give students a path to socially respected credentials of achievement.

Gamification works.

Georgia Tech and its computer science program might have different views...

socially respected credentials of achievement

That gets back to a serious problem: in a society that believes adamantly that "all men are created equal," then universal education should lead to universal attainment of all these socially respected credentials. But it doesn't. So we have no idea what to do about it all.

But it doesn’t. So we have no idea what to do about it all.

Which 'we' is this?

Generation Z (or whatever it is called) is a lot smaller than the millennials that preceded them. This caused a lot of school districts to lay off teachers about 10 years ago (i.e. when today's freshmen would have been in elementary school). How much of this decline in enrollment is just demographics?

Generation Z (or whatever it is called) is a lot smaller than the millennials that preceded them.

Over the period running from 1982 to 2000, American birth cohorts averaged 3.91 million. From 2001 to 2016, they averaged 4.07 million.

"Bryan of course is smart enough to see the trade-offs here, and he knows if the standard model of economic competition were allowed to reign supreme, we would (even with subsidies, relative to those subsidies) tend to see strong moves toward relatively efficient means of signaling, if only through changes in the relative sizes of institutions."

That's a good point. If firms could just find out types by using an IQ test then education wouldn't serve as signalling. The fact post-secondary education is so widespread means that probably all these 3 factors might be correct:

(1) Education signals work capacity: so to show you can be a hard worker you have to go through 4-5 years or more of college education. You cannot signal "work capacity" using cheaper signaling mechanisms.
(2) Education is a consumption good: people get more educated now because they can afford to be educated.
(3) Education has some actual usefulness: it actually does increase productivity so it makes sense to invest in education.

The military routinely uses tests to screen (reject below a certain cut off score) and sort (assign to military occupation). It’s been a while since I looked bit IIRC, the screening tests map pretty well to IQ.

It would be interesting to allow anyone to take theses tests, and allow companies to hire based on the results.

lil f's, i chirp up occasionally. when i do? u best stfu & listen. desenda may

talking, 2u, from real meatspace, way back when

back when the real thing was going on, not this computer s

and that's how a mind, introduces themselves, in2 the futuah

a big strolled in, and chatted a pace,

booby boo boo, boo boo boo

scary when a big speaks and sings out loud

back in meatspace, not some iteration, bits & bites sht

spontaneous and happened upon

a women sings a song, we here nice grace, thru the night

India is full of colleges offering worthless degrees churning out students unfit even to work as doormen in a hotel lobby. The humanities teachers ensure their own kids dont touch these courses with a bargepole but when anyone suggests that these departments be shut down they start pontificating about the need for humanities in a materialistic world. Only, their kids are too good for studying them.
These courses thrive because the university and college departments offering these worthless academic programmes with zero job value are funded by the state, some even by the central government! Now I am no philistine who thinks that disciplines like philosophy and literature are to be trashed. But a poor nation cannot afford to pay big salaries of faculty in departments in which the number of enrolled students is less then the number of fans and lights in the classrooms. It is better if the state ruthlessly closes such departments and since these are merit goods, increases funding for the handful of research institutes which turn out work of high quality in the humanities. Five or six such institutes are enough for the whole country.
Moreover, a few privately funded universities have excellent scholars carrying out fundamental research in the humanities. No one resents them being well-paid because these joints are funded by some top industrialists and not by tax payer's money.

The world needs about 12 new humanities grads per year. Not millions. The over-education scam is rife everywhere, but the worst of the consequences are in the developing world. The waste of time and effort rivals the medieval monks studying how many angels can dance on the head of a pin. We take the brightest of the children and put them in the most useless of activities for 4 or 5 years. At least in the west we can justify it as consumption.

About the salaries paid in government funded universities in India, an MBA and engineering prof gets the same salary as a professor of philosophy, sanskrit and linguistics, although these departments in many cases have few enrollments. And the salaries of university faculty in India is very attractive. They can even buy a car at the beginning of their careers , a really big deal in poor India. for teaching zero job value topics to nearly empty benches

TC: "Well, a lot of students don’t like it because they have to actually work on their own and pay attention"

My reaction to this statement from TC about online learning is that he's making an unfair value judgment about how students are motivated to learn. He's described himself as an "autodidact" and is probably quite unusual among the general population in that regard. I think it's fair to say that many students are not self-motivated and need to be pushed by teachers, social expectations, and external rewards like a job. One could argue that the current education system has drained students of intrinsic motivation but I don't think that's what TC is saying. He's making a flippant judgment about student laziness.

Graduates from elite Ivy league schools argue the loudest how the rest of us should forgoe higher education all together. Is this irony, hypocracy or elitism or some combination? One wonders where Mr. Caplan would be today without his Berkeley and Princeton degrees.

Are they stupid or what? The students should be able to tear down the dorm for free it sounds like fun. Just have the chemical engineering majors make some high explosive. In England, they actual had students construct buildings.

ChrisA, I don't know much about the US education scenario but in India, a poor nation, huge amounts of public resources are wasted to sustain academic departments which add nothing of value. I was shocked to learn that in the state of Tamilnadu in south India, government colleges do not collect any fees for undergraduate and post graduate programmes and also provide scholarship and free laptops! Students who cannot get into the good academic programmes opt for the humanities in such colleges just to say they are studying something. Teachers complain they cant teach such students in these colleges because of heir rowdy manners. And the politicians stand by the uncivilised students in the name of social justice!

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