Education: A Sign of Potential, Not Just Skill

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Higher education correlates with increased earnings, primarily due to signaling rather than the acquisition of useful skills. Attending school serves as a certification of a person's potential, indicating them as a desirable candidate in the job market. Additionally, the correlation between education and wealth may be coincidental, reflecting the tendencies of already wealthy individuals rather than education itself being a direct contributor to financial success.

Bryan Caplan of George Mason University and the author of The Case Against Education talks about the book with EconTalk host Russ Roberts. Caplan argues that very little learning takes place in formal education and that very little of the return to college comes from skills or knowledge that is acquired in the classroom. Schooling, he concludes, as it is currently conducted is mostly a waste of time and money. Caplan bring a great deal of evidence to support his dramatic claim and much of the conversation focuses on the challenge of measuring and observing what students actually learn.