Does education really teach you anything or is it just a status symbol that allows employers to sort individuals by pre-existing traits? Bryan Caplan has been debating this issue with his former professor, and now his coworker Tyler Cowen is joining in as well. All-in-all I find Cowen more persuasive, and think that for most countries, more education is probably better than less. However, I do want to question one aspect of his story. He argues that education allows people to reinforce their self-perceived characters in positive ways. Here is how he briefly puts it in his debate with Caplan:

Signaling models are important but they are not the only effect and of course a lot of signaling is welfare-improving for reasons of screening and sorting and character reenforcement.

It is only quickly mentioned here, but discussed at greater length in his most recent book, Create Your Own Economy (retitled, expanded, and in paperback here). The story is that education creates a framing effect which allows people to have a more positive narrative about themselves that induces better behavior. People see themselves as a college educated person, which makes them behave as they perceive college educated people to behave; perhaps reading more, working harder, attempting to be more cultured.

I completely agree with Cowen that the framing effect, or character reenforcement, of education is real. My problem with it is that it may be zero-sum, or even negative sum. It may be that the framing effect of college is simply to shed oneself of the burden of the negative framing effect of not going to college.

It is certainly a common refrain in TV, movies and yes, in real life, for non-graduates to explain some negative circumstance or inability to overcome a problem by saying “look, I didn’t go to college,” and then “I can’t…” or “I don’t…”, or some other restraint that fact places upon them. Absent such a framing effect they may believe their odds at achieving something are better, and so they would be willing to work harder at it.

One way to view this is that college sorts people into high-skilled and low-skilled pools, and then individuals perceive themselves as similar to their cohort. The perceived differences in the average skills of these pools is exaggerated because some of college is signaling, which allows those in the high-skilled pool to view themselves as higher skilled than they really are, and vice-versa for those in the low-skilled pool. For high-skilled people this induces positive behavior and for low-skilled this induces negative behavior.

This sorting would increase the disparity of outcomes between high-skilled and low-skilled individuals. Depending on the distribution of skills, a higher percent of the population going to college may increase the disparity in average skill levels between pools, and therefore the wider the disparity in framing effects. (Has this affect exacerbated growing income inequality?)

I’m completely prepared to change my mind about this, but as far as I can tell while it’s true that college creates framing effects and character reenforcement, it’s unclear whether the net effect of this is to induce overall better or worse behavior, and whether the positive effect on college graduates outweigh the negative effect on non-graduates.