It is a popular idea amongst economists, at least relevant to the non-economist population, that the purpose of higher education is simply to signal to employers the innate skills and qualities of the individuals. Contrary to the popular conception of the purpose of college as a place to learn necessary skills and and knowledge, the signaling theory purports that college is nothing more than a long test that tells potential employers something about your inherent intelligence and abilities.
One way to test this theory is to ask employers what they want colleges that their future employees may come from to focus on. If they want to those colleges to focus on teaching specific subject matter knowledge then that would be evidence against the signaling theory of education. If they want colleges to focus on testing students in things which in general are innate, like thing similar to I.Q. tests, then that would be evidence in favor of signaling theories; they only want colleges to be more accurate signals.
A recent article on how colleges are striving to be more “revelent” to future careers shines a little light on this issue. Employers are apparently telling colleges that they do not want students to be specializing, but rather learning broad skills. According to a survey conducted of employers by the American Association of Colleges and Universities,
89 percent said they wanted more emphasis on “the ability to effectively communicate orally and in writing,” 81 percent asked for better “critical thinking and analytical reasoning skills” and 70 percent were looking for “the ability to innovate and be creative.”
Communicating effectively and critical and analytical thinking are skills that can be strengthened and learned in college. On the other hand, are those things that are better learned in school or on the job? I think you can at least make the case that these are skills that are better learned in school, and so this is potentially evidence in favor of non-signaling theories of education, but I could be convinced otherwise.
Innovation and creativity, on the other hand, don’t strike me as the kinds of things colleges would be effective at teaching. If you’re not a creative or innovative person by the time you reach college, can anything they can teach you there really do anything about that? This is evidence in favor of the signaling theory.
Also notable is the absence of any desire of employers for specific subject matter knowledge. This does not bode well for non-signaling theories, since so much of what colleges currently do is teach subject matter.
The results of this survey are slightly suggestive of signaling theories, but they don’t appear completely damning or one sided. In either case, what employers want colleges to teach is probably the best battleground for these theories of education to compete. I would be interested to see how defenders and critics of the signaling theory of education interpret these results.

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Saturday ~ January 2nd, 2010 at 7:16 pm
Tom Hickey
“89 percent said they wanted more emphasis on “the ability to effectively communicate orally and in writing,” 81 percent asked for better “critical thinking and analytical reasoning skills” and 70 percent were looking for “the ability to innovate and be creative.”
As a former philosophy prof. I find this heartening. Critical thinking (what use to be called logic) is usually an essential part of Phil 101. It really should be thought of as critical and creative thinking. These complement each other, and both are necessary in living up to inherent potential.
“Innovation and creativity, on the other hand, don’t strike me as the kinds of things colleges would be effective at teaching. If you’re not a creative or innovative person by the time you reach college, can anything they can teach you there really do anything about that?”
The answer is, Yes, absolutely! The first step in encouraging innovation and creativity is not discouraging it, which much of education does by stuffing brains with predigested information instead of focusing on learning how to learn. Education is chiefly about learning how to learn, because education is life-long, of should be. People who haven’t learned how to learn soon crystallize and ossify, and they never progress beyond their limitations.
Innovation and creativity are an essential aspect of the humanities, where the answer is much less important than the journey. Most of the real learning in the liberal arts is based on working with an experienced person to acquire a rigorous intellectual approach while maintaining openness and wonder.
I am remind of this in the rather vitriolic debate at Harvard between Jacques Derrida and Noam Chomsy. Chomsky accused Derrida of lacking rigor, while Chomsky responded by calling Chomsky obtuse. One studies with people like that to learn how to strike a balance between extremes.
Liberal arts students who know no science and math are technically disadvantaged. Science and math students who are unfamiliar with the liberal arts are cold and dry.
Economists have to learn to combine the best of both worlds, being technically proficient but also being open to exploring the infinite possibilities of human nature, which is the foundation and fountain of liberalism.
Friday ~ January 8th, 2010 at 5:02 pm
Lurker
Is it possible that the coming of age for demanding a college degree for really pretty meaningless, non-technical jobs, somewhat coincided with EO statutes that barred most employers from testing for intelligence (except under extraordinary circumstances) as a condition for job entry?
Personally I’m a fan of the signaling theory, i.e., since we can’t test for intelligence, BUT COLLEGES CAN, we’ll take only those that have been to college! That way, hopefully we can avoid hiring the “Cat IVs” (those too stupid to pour liquid from a boot, even if the instructions were on the sole) that we would have weeded out with a simple test. Gary North has written much along this line of thinking.
You mention the general absence of employer desire for specific subject matter knowledge as one data point in evidence of the signaling theory; the other side of that coin is the fact that the majority of college graduates work in fields outside their major study area.
Today I am quick to counsel youth of the many opportunities and career paths which do not require a formal degree, but because I am a believer in the signaling theory, I also counsel them that, if they think a degree is wise, then they should JuCo/StateSchool it – junior college near home for as many credits as will transfer, then the cheapest state school they can find to finish up. This will maximize their ROE for obtaining the “signal.”
“I spent four years prostrate to the higher mind, got my paper, and I was free!”