Imagine you run human resources for a large company. Every year, you receive thousands upon thousands of applications for a hundred or so empty roles. How would you narrow down the slate of applicants to the ones that are the most relevant and the most likely to perform well for your company?
That’s a scenario economics textbooks often present to explain the phenomenon of “signaling,” an important theory that describes how economic actors — in this case, the large company — make decisions based on incomplete information — in this case, the relative skill level of each applicant. The company requires some sort of signal that demonstrates the applicant’s potential ability to perform the job for which they are applying.
A common example of a signal is a college degree. Therefore, as the head of hiring for a large company, you would whittle down the towering stack of applications by eliminating the ones without college degrees — in your estimation, the ones that have not demonstrated the potential ability to perform well in the job. If you still end up with a list of applicants larger than you can handle, you can further narrow down your choices by the type of degree each applicant has. Therefore, an engineering firm will narrow down the applicants to only college graduates with engineering degrees; the same goes for financial institutions and many other sectors.
I bring this up not to bore readers with obscure economic theory, but to highlight that the point of college has changed over time. In the early United States, colleges like Harvard and Yale recruited students to be clergymen and theologians. But this wasn’t practical training like it is in today’s schools; rather, those colleges focused on the liberal arts, seeking to impart a wide-ranging education including the classics, political theory, English and every other subject we now associate with poor incomes upon graduating.
If, like me, you like the idea of a well-rounded education incorporating the liberal arts, this may sound like a bygone era that we should strive to get back to. But we should first recognize that colleges were highly selective back then and discriminatory: only about one percent of white men went to college during colonial times, and many of those never graduated.
Over time, colleges started to proliferate, and students started attending for things other than religious instruction. The 1862 Morrill Land Grant Act furthered the expansion of colleges and increased the shift toward more practical education. That act gave federal dollars to colleges focusing on things like agriculture, mining and technology.
As a result of this expansion, colleges accepted more students, thus democratizing higher education. The G.I. Bill, which gave veterans of World War II opportunities to go to college, vastly increased the number of students in schools across the country. Now, the number of students going to college has skyrocketed, climbing as high as 19.7 million this semester.
Back to the economics: when more students go to college, they flood the workforce with college degrees. Therefore, high school diplomas become less valuable, and college degrees only become valuable when they are specialized for the professional field that you’re going into.
This is, I think, inevitable. Even though I would love for an English or history degree to be as useful as an engineering or biology degree, I know that ship has sailed. I’m also rather unsatisfied with the college status quo: I think college is generally too expensive, and indeed I’ve written about how too many people go to college in the first place. But I also try to be realistic. The trends of young adults going to college has only increased over time, and even if it stops now, it will remain at a high level. Employers will still treat college degrees as signals. This is partly a consequence of the democratization of higher education: the more we open up opportunities for groups of people who previously never had those opportunities, the more this becomes an issue. Of course, I think the democratization could go too far, which is why I’m opposed to making college free for everyone. But in general, I’m willing to accept the fact that college has evolved from a place to get a well-rounded education to a signal-granting institution.
Therefore, if you’re going to college today, you might as well get a degree in a “useful” field. If you don’t like the more practical majors, you can always pursue a more interesting minor. If you absolutely cannot justify ruining the college ideal, you should aggressively pursue career services so your college experience won’t be for naught.
Embrace the practical nature of a college degree and the democratization of higher education. After all, it’s the only game in town.
Greg Fournier be reached at [email protected]. Follow him on Twitter @greg_fournier.
