Is the long-cycle “higher education boom” now beginning to go bust?
Like financial bubbles fed by subsidy and the Federal Reserve’s limbo-low interest rates, American colleges and universities are plagued with too much government attention —particularly by policy that says “everybody should go to college.”
But common sense tells us that not everybody profits by going to college, that sending ill-prepared, unqualified and even uninterested young non-scholars to college, largely so they can “earn higher incomes” is absurd. Pushing the vast majority of American humanity through the university mill cannot ineluctably yield increasing returns. With diminishing returns, increasing government attention can only feed a dangerously unsustainable bubble.
And once it bursts, Americans will demand explanations.
Look to the theory of “signaling,” which posits that a (or the) chief use for schooling is not learning but a demonstration: Getting a college degree shows (“signals”) employers that the persevering student possesses virtues useful in “the real world.”
We’ve come to rely on those crude signals, but as economist Bryan Caplan argues, businesses could adapt to a very different information market: “Ending government subsidies for education wouldn’t create a new working-class generation; it would lead businesses to massively expand the employment of interns to take advantage of the large pool of talented, young people who can’t afford tuition.”
Gee, learning one’s trade for free sounds better than going into debt to “signal” employers that one would likely be able to produce for them.
This is Common Sense. I’m Paul Jacob.