Econ Duel: Is Education Signaling or Skill Building?


♪ (music) ♪ [Tyler] Alex’s office is just
down the hall from mine. He and I write a blog together and we’ve been arguing
for 25 years now. So we thought we’d do
some arguing for you. This is about education. Alex thinks education
is mostly about signaling, namely demonstrating to the outside world your underlying level of talent. Whereas I think education
is mostly about learning. So Alex, why don’t you just tell us
a bit about how wrong you are? [Alex] All right, but let’s be clear
first about what we’re arguing about. It’s very obvious that people
who go to college earn more. Their incomes are higher.
The question is, why? So I see there’s three basic views. The first view is that the people
who go to college are just smarter, they have higher IQ, more ability,
something like that. And that view says that
if these people didn’t go to college, they’d still be earning more
because of their natural abilities. The second view, the human capital view, is that people are actually
learning something in college which is increasing their productivity. This is the highly optimistic Tyler view. That’s my view, yes.
[Laughter] And then we get to the correct view. So the correct view, the signaling view,
is that by going to college, people are sending a signal
to the job market that they have higher IQ
or have greater ability, but if they didn’t send that signal,
if they didn’t go to college, their income would be much lower. So you’ve got to send the signal
to get the higher income. It’s funny but most people
who believe in the signaling theory, they actually learned it in school. Well, we’ve got to learn
something in school. Here’s the striking thing about education. If you put an extra person
through college, and they’re earning more,
many, many years later. It’s because they learned something. If it were just a signal, they might
start off with a better job, but then the world would see, well,
they really hadn’t learned much and over time,
their earnings would decline. Well, oddly you think that the market
is more efficient than maybe even I do. Look, take a look at the peacock’s tail,
a classic example of a signal. So the peacock is signaling
that it’s macho, it’s got lots of good genes. Evolution has had hundreds
of thousands of years to come up with a better way
of doing this. The peacock’s tail is a big waste. If evolution couldn’t have
figured out a way out of this signaling problem, then maybe the private markets
can’t do so either. Peacocks can’t just go up
and take the SATs or any other standardized test. If education were just about a signal,
it would be very easy to cut out the middle man of the college,
give everyone an SAT or IQ test, and just send them
to the jobs they ought to be at. But no, people need social context.
They need to learn critical thinking. They need to learn creativity. And all of that goes on
in higher education. Look, it’s not just about IQ.
We all know smart people who have lots of trouble in the workforce. You’ve actually got to do
something hard. And it is hard. Most people don’t like education,
so it’s hard for them to get a degree. You’ve got to demonstrate
some persistence. So it’s not easy to find a way of–
something which is hard. It’s not easy for the private markets
to find a way of duplicating this. Especially when everyone
is doing it already. It looks really odd for a smart person
not to have a college degree today. We pay you a salary at George Mason and we pay you most of all
because of what you know and what you do, right?
Not because of signaling. Signaling may be true
in the short run… your first job, you have a fancy degree… but over time, the market sorts out
who is productive and who is not. Getting that credential though,
it’s so important. Even to get a job
as a street sweeper today, you need a degree. And that’s not because you learn
anything about street sweeping. It’s because
people require this credential and that increases their wages. A lot of what you learn in education,
it’s not just the facts or the textbooks, it’s about social context. It’s about dealing
with different personality types. It’s about how to submit to authority. It’s about how to be conscientious
in all the right ways. So when employers want a degree,
it makes a lot of sense actually. You’re getting the workers
who have learned a bunch of things. Just getting your foot
in the door is a huge amount of your entire future career.
Let’s imagine, you went to Harvard,
suppose you didn’t go to Harvard, okay? I think you’d be doing pretty well. You have ability, high ability bias, okay? You’d be writing for newspapers
or something like that. But you wouldn’t have been able
to be a professor. Without that credential in your hand, you wouldn’t be teaching
at George Mason today. I think your income would be lower.
You’d still be famous, but your income would be
quite a bit lower. But look, even if you look
at self-employed people, when they’re better educated
they learn more. And that’s not a question
of getting a foot in the door. These are people who work for themselves. What you learn from school
is a lot about social context, and authority, and making connections, and figuring out a big picture
of how the world works. You might earn a skill, too. Would you want to drive
over a bridge built by an engineer who had not gone to Caltech? – [Tyler] Probably not.
– [Alex] Well, that’s a very nice story to tell, that education teaches these social goods and interaction with people. It’s kind of funny though, isn’t it,
to say that what we’re really teaching is stuff that we’re not actually teaching? I don’t actually teach those skills,
but students just get them by osmosis? That seems hard to believe. Funny but true.
And look, when you teach, you should pull
your students aside and say, “Look, here’s how itreallyworks. Here’s what the profession
isreallylike.” But you’re communicating
things to them which are deeper than what you intend
at any point in time. – [Tyler] Yes, that’s true.
– [Alex] I don’t know. I’m not sure I’m doing all of that.
Maybe you are. – [Alex] Look, let me give you an example.
– [Tyler] Maybe we should pay you less. Shh. Let me give an example.
Sometimes when I’m teaching, I’ve got to go give a talk
at another university, or go on a trip or something like that,
and I tell the students, “Next week, class is canceled.” And they’re happy, they’re pleased, okay? Maybe that’s a little embarrassing to me, but it seems peculiar, right? If you went to the store
and you asked for a pair of jeans and they gave you less, they gave you
a pair of shorts instead, you’d be upset.
But when you tell the students, “You’re going to get less education,”
they’re not upset. Well, why not? They’re not upset because they know
they’re still going to get the degree, and that’s what counts. Let me ask you,
what would you rather have? Would you rather have
a Harvard education without a degree? Or would you rather have
the Harvard degree, the piece of paper, without the education? Look, the question
isn’t one or the other. When you look at the data,
people in Scandinavian countries, laws were changed, people had
to acquire an extra year of schooling, which was not in any simple way
visible on their resumes and still years later they earned more
because they learned more. Look at the economic growth miracles:
South Korea, Singapore, China. They invested in human capital,
developed highly talented labor forces. Could Singapore be a leader
in biomedical technology without good educational institutions?
No way. These countries were growing before
they started to invest in education. [Tyler] And they were able to upgrade
because they then educated. There’s also a lot of countries which
invested huge amounts of education, they didn’t grow at all.
In Africa, what happened there? In Africa, they invested a lot
in education and they haven’t grown. This massive push
we have in the United States that everybody has to have
a college education, I think that’s actually a problem.
Because what’s really going on is by forcing or by pushing
everybody into a college education, we’re raising their wages, yes,
but at the expense of people who don’t want a college education
or who don’t have those abilities. So in part there’s
an negative externality there. Pushing so many people
to get a college education means that other people,
their wages are being lowered. And we need to think about
those other people as well. I agree that’s often a problem,
but that’s largely because our K through 12 systems
are sometimes junk. So the problem there is actually
not enough education at earlier levels. Let’s look at South Korea, maybe the world’s greatest
economic growth miracle ever. Eighty percent of South Koreans finish
with some kind of higher education degree. And you see the results in their economy. Sure, South Korea is great,
but there are a lot of countries which as I said, invested in education
and they’re doing no better off. You need more than
just education, that’s true. But the potential impact of education– Again the magic view: You need something else…
It’s some combination… You need good infrastructure.
You need good governance, right? It’s not only education,
no one never claimed that. But look, when you go
and you actually get down to the nitty gritty,
what do students remember? They don’t even remember
what they learned a year ago. So how can what students learn today be increasing their productivity
20 years from now if they can’t even remember
what they learned a year ago? They learned critical thinking.
They learned creativity. They learned social context. They carry that with them,
even if they don’t remember what we taught them about
the elasticity of the demand curve. “Elastic, inelastic, which is which?
My goodness!” But that’s maybe not
what they need to know. It’s a way of thought,
a way of approaching the world. It’s an acculturation. It’s a way of advancing
into a higher socioeconomic stratum. And mostly it works… when it’s good. [Announcer]What do you think?
Click to vote.
You can learn more
about human capital and signaling
by checking out our Microeconomics course.Want more videos like these?
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71 thoughts on “Econ Duel: Is Education Signaling or Skill Building?”

  1. I personally think that signaling plays in the pig part in one's choice to educate himself. even before studying economics and reading Michael Spence's paper on signaling, I always saw education as a mean to show an employer what we are capable of in a universal language he can understand : a diploma. Yes people do educate themselves for the beauty of the act, but in the end, the reason people are willing to pay crazy tuition fees is because they hope for some form of return on investment. A diploma is the best way to enter the arena that the job market is and say "look, that's what I'm capable of"

  2. Really appreciate this video, one of the best debate I've seen between actual economists
    Personally I think Alex has done a great job with a rather difficuit view :)

  3. Couldn't this be tested by studying long term salary differences between grads of two schools of similar quality where one school happens to be more well known (thus providing a better signal)?

  4. Tyler Asks: Would you want to drive over a bridge built by an engineer that did or did not go to Caltech? Lets say I would prefer that he did. Now is that because I know anything about Caltech's bridge building curriculum? Do I know anything about any skills at all that he may have learned in college? NO. I just know he got in, got through the classes and the tests. That is the perfect example of a signal of personal traits, and not assessment of skill.

  5. isnt it obvious that the skill building/learning side of if is a signal as well, along with all the other ones like showing discipline and doing what you are told even though you don't really want to?

  6. You are talking about the whole education system.

    Let's take my study, psychology. Do we actually learn something in 5 years that any regular Joe couldn't learn in 6 months? No. Ask a social scientist about concrete studies and proven things. They won't tell you that much about these things. They learn a certain way of thinking. A way of seeing things, but it's not something that should take 5 years to learn. Then let's take programming. Could people learn it by themselves? Yes, that's what they actually do. But is learning it a good thing? Yes. So learning programming at an university is not just signaling. In one case it is pretty much 100% just signaling in the other case it is useful knowledge that the university does not have a patent on, but is only 50-60% signaling as employers also check what you actually can do.

  7. Tyler argues that "Well once employers figured out they didn't know anything, markets would adjust and their wages would fall, if signaling were true." But the whole idea behind signaling is that a degree is a signal for knowing SOMETHING, or just being a smart person in general. Yes, obviously in technical fields like engineering you actually learn something, but for something like business, a degree from Harvard Business School really just signals to an employer that you are a very capable and intelligent person. This is a person that would succeed in most fields in general, not because they happened to learn something from an Ivy League business school.

  8. Governments want people to go to college so they give advantages to those who obey them by restricting access to many jobs to people with the right diplomas (besides subsidizing education and offering loans to some students).
    College has nothing to do with the needs of the markets.

  9. It's like width and length. Just figure out which is longer.
    Since, width is smaller, the length has more effect when you add them up to get the area.

    If you think I've made a mistake, think about what they were arguing over. It was "Which one contributes more?"
    Instead of which multiplying factor is more important… shouldn't they have argued over whether doing both of those things should be socialized or should those who are most well endowed intellectually be allowed to pass that endowment on in ways other than genetic and by example.

  10. Engineering school. I don't think I would have intuitively figured out columnar buckling formulas or organic chemistry. +1 for skill building.

  11. Cowen- it's signaling in the short term and skill building in the long term. Signaling helps employers quickly sort through applicants depending on the job. However, if you don't have the skills to perform adequately you'll be tossed. And BTW Africa is a continent full of countries. How about using data from different countries?

  12. Question: if you take the total tuition spent, PLUS the forgone wages from studying for four years instead of working…do graduates make enough more in lifetime wages than, say, sticking it in an index fund (at 8% real income growth per annum?) A B.S. costs around $240,000 in tuition and forgone wages.

  13. If college was about skill acquisition, it would resemble vo-tech for every chosen profession…and it doesn't. What it is (especially in non-technical fields) is an extension of a rigid class dichotomy, of "officers" and "enlisted"; of lords and serfs, etc. It's a pseudo-intellectual justification for the trappings of "nobility" in an era when birthright is passe…but it serves to separate the bourgeois from the proles. At its heart is something…downright feudal! In a day of ease of information access, there's nothing colleges teach that a self-motivated, bright individual couldn't learn on their own. You could "sink or swim" in less technical fields; stringent practical and knowledge testing for certification would work in the more technical fields.

  14. Electrical Engineering is 100% signaling! haha get it because we study signals… I'll show myself out (+1 for skill acquisition).

  15. My tuppence: The positive side to signalling is trust. A qualification provides a level of trust and assurance for employers and consumers. It is also a cheaper means tester for the employer, rather than conducting numerous tests. Though, with elearning that trust no longer has to be outsourced.

  16. skill building. unless it is something like a liberal arts degree. Accounting, finance, science, technology, law, medicine, all build knowledge. for everyone else vocational school should be enough if we could get better K-12. Even in K-12, the reason everyone has to learn quadratic equations is so that they can go into a math/physics field.

  17. Whew. No definition of what "Education" is is made. If "Education" is what you "learn" in school, does it follow that if you don't go to school, then you don't learn? Of course not. Excepting the tautological or teleological, let's consider what would happen -hypothetically-if both Dr.s PhD theses (sp?) are shown to be plagarized and their credential withdrawn. Would either keep their (tenured?) position? Clear signaling effect, I think. But what if both advocate the position that supply and demand are completely uncorrelated? And cite an ancient clay tablet as proof? Is this a lack of skill or signalling? I think most troubling is their failure to clearly define the question. Is what/how a high school Junior (when most apply to college) values about (college) "Education" going to be the same as what s/he values as a college senior? as a college graduate? 5 years later? 10? 30? Tyler seems to be forced into the position espousing the idea that although it's not taught, formal education is about "learning" critical thinking, learning, and research skills (if I may fill in the blanks) and both seem to be arguing from the POVs of tenured academics. I don't know what career best rewards merit and punishes incompetence, since we know luck plays such an important role in outcome, but what about the military generals/admirals or large cap CEO's – are either disproportionately filled with those holding advanced degrees? If it's important, and it's not taught, I say shame on the school/teacher! (meaning things like critical thinking, research, life-long learning, interpersonal relations and, especially, networking)

  18. An engineer who went to Caltech? And dropped out after 2 weeks (from HSS English major track) , then got a job as a "Maintenance Engineer"? Compared with a Licensed engineer who didn't go to Caltech, but has designed 54 traffic bearing bridges, and built 123 during her career?? Not a tough choice. Is Caltech better than MIT or a dozen other Schools of Engineering? Seems like an off-the-cuff (short-hand?) ill considered example…

  19. I think college education is a combination of signalling and skill building, but the relative importance of each differs by the person's ability. The value of college as a signal declines as ability goes up. The skill building increases with ability because learning is gets easier with a higher initial aptitude.

    Therefore, high ability types would succeed without a college education but could also benefit a lot from just a little schooling (e.g. Bill Gates & Steve Jobs). Low ability types benefit from the signal of a college education but may not gain a lot in terms of skill building. For medium ability types, college is just right: they gain the most from education in both signalling and skill building. Insight inspired by Goldilocks 🙂

  20. This debate looks fake and scripted, which really threw me off and I couldn't focus on the actual points being said.

  21. Increased education if effective for more intelligent populations. The missing component in your comparison of the differential effects of education spending is the follow: the Average IQ in South Korea & Singapore is >105, while the average IQ for sub-saharan Africa is <75.

  22. It's about the degree not the education. We all get trained for our jobs upon hire. That training, that resume builder, grants us new oppurtunities in higher positions. If more employers were willing to hire people without degrees for entry level positions then I'm sure the lifetime earnings gap would decrease

  23. I worked for 35 years as a research scientist at a national lab, where I and all of my co-workers had to have earned PhDs to get this type of job. From my experience, there wasn't an obvious correlation between where you got your degree, e.g., Berkeley or Podunk U, and success as a scientist. This would suggest your both right, and wrong. Both signaling (sticktuitiveness to get the PhD) and Education (learned enough to get the PhD) got us in the door all right, but success required cleverness and adaptation, neither of which was taught in school.

  24. I learn most things online, I am about to complete my associates in science, finance. But I love economics, but can't afford those private tuitions. So I learn it on my own. Good debate. Youtube is a great resource tool. Most people I know that have a BS or BA, can't get hired because they don't retain the academic experience… Depends on the person's motivation to learn the subject. Wouldn't mind going to Harvard to learn economics, haha but not everyone can get in. Regardless I learn better being self taught, without the pressure.

  25. "evolution didn't figure out a better solution" well his understanding of evolution is wrong and uneducated, maybe that explains why he believes no one learns anything in school, its a problem of "argument from personal incredulity". So lets put the signaling theory to the test, engineering, law, mathematics, physics how many of those degrees are held by people who didn't learn how or what to do in those fields. Its more complicated and neither is 100% correct. Signaling applies only for the initial entry but if you can not do complicated math in your new physics lab because you didn't learn anything you wont last long but other jobs and degrees are far more nebulous or the skills are far more specific to that company and in those cases where you learn by doing it is more signaling. I would add though that a more focused approach to curriculum would be beneficial. If your non major oriented classes and electives were approached from the point of view of your area of study and you had more crossover in skills. Example say you are an econ major and so your history class looks at history through an economic perspective and focuses more on that aspect of the material. Crossing of various classis with statistics, excel, other analysis tools so that the skills you learn are reinforced in other classes. Classes that simulate actual work environments, often classroom requirements for understanding and skill are lower than the job will require.

  26. 7:50 "Our K-12 system is junk."
    Who trains the teachers? Who designs the curriculum? Who comes up with the principles of teaching?
    -The Universities

    The fact that the K-12 is so terrible implies that the universities are incapable of conveying good teaching practices. Which further implies that universities don't know how to teach.
    Point signalling theory.

  27. In college I've noticed that the vast majority of students look at their classes as a means to an end, rather than also being an end in and of itself. Their outlook fits the "signaling" model, while I see education as a tool that allows me to better understand the world. Although it's likely that I could have learned the same things I did at college on the internet, it's undeniable that a degree sends a signal to potential employers that "I learnt it on Youtube, trust me" just doesn't. Humans want to know what to expect from others, so we seek information that will tell us about their underlying talent. The problem is actually obtaining this information on an individual basis would be incredibly costly/time-consuming. Instead of going through the lengths of verifying individual skill levels, things like degrees amalgamate this information. Humans love to summarize information, to simplify things. Unfortunately, in doing so we often overlook nuance and group things together that should be separate: while everyone in my graduating class received a degree, only some developed the analytical and critical thinking skills that employers want. This isn't to say that those students learned nothing, took nothing from their experience, but this disparity is obvious in the fact that employers, grad schools, etc. look at more than just whether or not you have a degree.

  28. I think this is not a deductive answer , such as yes or no, but a probabilistic answer. I think for the very few that very motivated, they actually put to practice what they have learned, such as projects outside of the curriculum. As for the majority of people it is merely a documentation or signaling as they say. Most people are not motivated to innovate or be productive and merely are there because of the pay check. For the very few, a paycheck is not enough, they need more than a salary.I see Elon Musk as a case for neither, he wanted to build skills but never went to class and read books all the time and only showed up for exams. So he neither needed the skills nor the signaling that he was smart. Another good example is Peter Thiel , he went all the way to JD after bachelors but decided it was boring and decided to go entrepreneurial. Also only in the technical disciplines can you show skills. A physics major can show evidence or proof of how x will work but a political science major will have a hard time showing skills, perhaps Bullshi*T skills maybe.

  29. Could it also be reverse signaling for the current economy. After the push to get a degree, if you come without one, it signals that you're incompetent? Or if you enrolled but didn't finish due to some extenuating circumstances, does that also signal that there is something "wrong" with you when screening through the applications?

  30. People go to college to obtain a government mandated license. If the government did't control education, people would simply purchase knowledge through teachers in the Free Market or be trained by corporations directly.

  31. Looking past the fake smiles, this is a great video. I definitely thing it’s signaling. A degree is for the piece of paper. People memorize things off. The smart people I know are self taught.

  32. This is a dillemma for sure. But I guess in the last two minutes of the video sum it up very well with reality

  33. Idiots,just like any such question,the answer is a bit of all three.
    Skills are increased due to education.
    And the degree acts as a signal.
    And they might have been a bit smarter in the first place.but the education and signalling enhanced them even further

  34. The pioneers of education developed a pattern defining house the world operates. This is why a college degree is vital and not a signal.

  35. The push of diploma=hired is junk
    We should base it off of talent the problem is that we dont base it off that but the paper. But Africa dosent have alot of flowing liquid capital so nothing can happen

  36. sometimes this question comes down to which course you are attending so according to that the range of it varies. There are factors within like the number of degrees or how much is the scope for certain degree holders.

  37. There's some ratio that is dependent on the person, the qualification and the economic environment.
    The question for policy-makers is overall ratio is and how to allocate spending accordingly. My suspicion is that too much is spent on higher education in comparison primary and secondary school education.

  38. I love to see 2 intellects arguing or having a debate awesome!!, and by the way they are both professor and well respected but still have different points of views based on the education they both have and why is that.

    This debate is centered around education so what I'd love to do is first check my own understanding of education which is defined as follows: "the process of receiving or giving systematic instruction, especially at a school or university."

    So when I signal/input some instruction to someone or something (computer) I expect a result…correct? so this result is designed to create a signal (the level of certification – 1st, 2nd class etc.) to the intended jobs market that the qualities the market is looking for regards to the skills required in that market can be found in such a person but at a cost (Demand and Supply).

    So I will say it is both (sitting on the fence…and ain't nothing wrong with that based on my argument above), as education is serving the purpose it was designed for that's going through a process of receiving or giving systematic instruction and making those skills sets available to the job market.

    Lets take examples to bolster my arguments; Footballers (Ronaldo, Messi and their cohorts in premier leagues), This guys go through an academy for playing football to hone their skills sets and therefore they come out with the scoring, dribbling abilities the football market wants and in return they get paid over a million dollars a week for kicking a football. I bet Tyler and Alex with greatest respect can't kick a ball from 18 yards to safe their lives. The same goes for any other sports or even for Gladiators.

  39. Having listened to this great debate, I think Alex you've won the debate…the point you made resonates so much with me and I have heard a number of my friends who have recently finished their MBA say time and time again that they just learning to pass the exam and the actual learning come in the practical application of the subject matter. In the age of internet there's no need to go to school in the formal sense of the word to be schooled (it's a waste of time and money in modern times. I can see why it continues though teachers and lectures will loose their livelihood or jobs and most likely won't vote for the sitting government etc. What is the point of learning 9 to 13 subjects and in France a friend had 31 subjects to cover in her MBA degree. And you have to aim at getting a 4.0 in each one of those subjects to fill accomplished. Tyler you agreed that most times we even struggle to remember simple definition and more so we don't remember most of the things we learn.

    You know what Alex (Africa's 50 plus countries, have not progressed similar to the west in terms of education because this never been our way of life, we have a strong culture that doesn't allow us to do that (our educational system is with nature, not in economics, laws of physics and other theories). Maybe because we already know subconsciously that education in the way it is thought today bares no value) we have just resisted so long and even when we've tried the west has always put barriers to our growth. There're too many inequalities and bullies in the system to allow for such comparisons in education.

  40. Personal experience, but take it:
    I started to work in 2007, there was a guy, who started two years before. We are both programmers, and he was very into the opinion that college degree matters, and whatever I do, without degree I won't make fortune. He is still working where we started, and my salary is about 30% higher. Simply I got more workplace, and I built up skill on selling my workforce. He never went on interviews, I did. College degree might be a good advantage when you start your career, but later on, the difference between having or not is negligible.

    So my opinion is: what resources you have, and how you do sell it, that matters. College education and a degree is just one resource you can have. If you can't sell it, it worth close to zero.

  41. This video made me so angry… I have to comment on it.
    I cannot talk for the US but I can for the majority of the EU Universities. I´ve been studying 2 degrees (Law + Banking & Finance). I´m doing my major now in MSc Management abroad. I speak 5 languages fluently (obviously, I didnt learn it at UNI).
    THANKFULLY, I´ve opened up an ice cream shop in a total corrupt state and started doing SOMETHING, otherwise I would probably commit suicide at 24 from all the useless research and useless facts combined with useless theory neoclassical bullshit theory. I cannot believe my parents paid for such a waste of time and cognitive ability. I haven´t earned a penny with my "knowledge and education" and I am full of skills which are not marketable in the 21st century. They can land me an intern job maybe where I enslave myself from 9-5.
    I have to mention that my business partner is an uneducated fool, with basic knowledge of maths and psychology. He loves festivals, so his contacts were helping us with starting the business (NOT MY PROFESSORS BTW!). His family hasnt taken a burden of about 100.000-200.000euros and he is a success – just as I am with my prestigious knowledge of the 19th century theoretics.
    I´m still under 30, living just above the existential minimum, writing out of a 15 square meters room where I sleep, cook and shower. I´m going to the gym to stay sane and i´m going to classes just for the sake of the degree.
    I can tell that studying has made me psychologically handicapped, that is a fact. As a result, my family has to take the anger which I carry with me all the time, which makes them also kind of worse off than other happy parents. I no longer have genuinely fun because of HIGH-STRESS and ZERO INCOME and NO TIME problem. I feel like an useless isolated guinea pig.
    To keep it short and simple, from the experience of studying in 3 countries, 2 difficult undergraduate degrees I can only say that 95% Universities are a SCAM . Education is Skillshare, Udemy and Coursera combined with praxis, Universities are institutions where people are being robbed of their psychological well-being (social skills?! You must be kidding me, students at highly competitive universities don´t even want to exchange their scripts because they know it is a bloodbath when the exam period starts, nobody wants competition!) and is preparing you to be a slave in the modern corporate world for the entrepreneurs who had BALLS and have build companies with REAL LIFE education.

    I genuinely hope that you don´t believe that universities are non-profit and that they serve YOU. They are just the same as a Bank. YOU serve THEM, not the other way around. DEBT is the goal not the instrument. But it is up to you to decide whether you want your fiat money in a Bank or to have it in alternative savings (Gold, Bitcoin, Realestate or a Business).
    This is the correct analogy of Education v. University.

    By all means: If you want to be a doctor then study medicine. If you want to be an attorney study law. But don´t study just for the sake of studying, this is LIFE not a HOBBY. If you can afford an expensive hobby like a a degree then better make your millions with actual skills before enrolling.
    I like your videos but I feel ashamed for You if you really think that in the 21st century university is beneficial for the 80% of the society.
    The cause and effect ratio of a (Degree) and (Marketable skills w. respect to all future net earnings) is NEGATIVE for most of students. And exceptionally, if its not NEGATIVE then it SHOULD BE A FATAL VARIABLE ERROR.
    There is more relation between Suicide and Degree than Degree and Marketable Skill if you ask me!

    Cheers to the channel and for openly discussing the issue!

  42. ..c'mmon there is no country in africa that invest in education like singapore, china, south korea. If there is, mention one…and stop saying a lot of countries.

  43. Not either/or. I agree with Greg Mankiw's textbook, he argues that both these factors matter, but human capital is a more important factor.

  44. People who flunked their senior year have much worse outcomes than those who complete it. This high margin return for the degree proves the signaling theory of education.

  45. I am a Korean who goes to a top university and I agree that the Korean education system did help greatly with the economy. Not only because it provided the government and companies with knowledge to make complex industries(cars, phones, ships) but it did act as a signal to weed out the less useful talents to the more useful ones. For example, if you graduated from Seoul Nat. University employers would even look at anything else in your resume. Did this always work? No, but it did provide signaling for the otherwise blind employers and look at where it took us. We are now one of the wealthiest nations in the world.

  46. Sir, What is the conclussion according to u ?
    There are a lots of people even they are not entering to college still earn billion of dollar. Talent is more important than a degree.😇

    Please sir say that what is the conclussion according to you.

  47. At 4:15 that guy just asserted that people in college learn how to be conscientious and submit to authority.
    No, the degree selects for people who are those things.

    Educational psychology and common shared experience proves that people don't remember what they learn in school. They forget everything after the exam. So universities fail at doing what they're explicitly claiming to do, or at least try to do. So why are we supposed to just assume they're competent at incidentally teaching people to do all these other things?

    What's worse, because you have to concede that people cram for exams and forget everything afterward, the "learning how to learn and be an employee" cliche is the only ostensible source of human capital from universities.

    Even if we accept this on face value, this isn't good enough. Universities then have to be better at preparing people for the workforce than working an actual job. Toga parties, safe spaces, binge drinking, getting exam answers from your friends, etc. are better ways of learning "the social context"?

    Education is 80+% a zero-sum rat race for most degree programs, and possibly 50% for degrees like engineering where you learn differential equations and never use a Bernoulli method or any other analytical method to solve a problem in your entire career. But you can't even take electrical network analysis course or be eligible for an internship without that class. So I don't even buy the argument that STEM fields are significantly more than a preponderance of human capital.

  48. Would have like to have seen Tyler pressed for an answer on, if he had to choose, an online self-study Harvard education, versus just the paper degree. Bryan Caplan make some great points about the resources that are wasted when everyone goes to college. Would like to hear Tyler , Eric Weinstein and Caplan have a round-table discussion!

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