America Needs Alternatives to College

"College graduates earn more than one million dollars more than high school graduates over their lifetimes." Every teenager has been bombarded with this much-cited statistic in the hope that it will convince him or her to intend a university after high school. But, is it actually the university education that leads to the inequity in salaries between college and high school graduates? Superficial reasoning would suggest yes. It is obvious that the additional education increases the college graduate's human capital and maybe this does lead to greater productivity and higher wages. However, this only seems probable if you ignore what universities actually teach. The majority of what is taught at universities will be of no use to their graduates in their future careers. If the purpose of a college education was to increase relevant work-related skills they would look more like vocational schools where students would specialize in particular skills relevant for their future careers, rather than studying small amounts of every subject. Instead, to a large extent, the purpose of college is to act as a costly signaling mechanism to assist employers in screening employees. A college education is more about showing off than acquiring useful job skills. However, this showing off comes at an enormous price. We waste billions of dollars per year on this showing off, not to mention the four years of someone's life. These tremendous social costs require us to rethink hiring practices and how universities serve their students.

The college wage premium is a well-documented fact that is only trivially related to college. The college wage premium is truly just an intelligence and effort premium. In the search-and-matching economic literatu...

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...Graduating from college is one of the few sure fire ways to make a relatively large amount of money in your lifetime, but what is learned at college is not responsible for their graduate's success. The benefits from a college diploma come from the signal it sends to employers that you are worthy of being hired. But this signaling is collectively immensely costly. Millions of young men and women spend billions of dollars and years of their lives in unproductive and costly signaling. The current relationship between college and future wages and employment is imposing enormous deadweight losses on the United States economy. Altering long-held norms about college will be difficult, but it is vital. A slow transition to a new regime with alternative screening mechanisms for employers and colleges teaching specialized skills and knowledge would make everyone better off.