More Evidence That Higher Education Is About Signaling

Anya Kamenetz has an interesting piece in Newsweek that examines the controversy over the international expansion of brand name American universities. One cause for concern is that many of the new campuses are in countries that are run by undemocratic or oppressive regimes. That it might appear as though U.S. universities are condoning the actions of these regimes is a legitimate criticism and something to be concerned about.

But there’s a second objection to international expansion that epitomizes the misguided focus of our higher education system. People are worried that the lower quality of the international sites will dilute a school’s brand and the value of existing diplomas.

To start with, overseas school offerings don’t match the level of any elite university institution in the United States. A review of websites and course listings, and interviews with faculty members who have taught overseas, reveal that courses, majors, and degree programs tend to be limited—usually focusing on the biggest economic draws: business, science, and technology…

Faculty quality is also a problem. While these schools showcase marquee professor talent, such well-paid teachers are more likely to fly in for short “intensive” courses of just a few weeks, while the bulk of the teaching is done by lower-paid adjuncts and graduate students…

The quality of the students, an integral part of the experience at selective institutions, is an even sketchier matter…

For American students and alumni of elite institutions, the danger is that the value of their degrees will be watered down by the presence of a lower-quality foreign-made degree under the same name.

Nothing about this “danger” is exaggerated or overblown, and that’s the problem. In a world where a college education is mostly about learning, a person can show up to a job interview, demonstrate their skills, and have that be all that matters. The fact that somebody halfway around the world got a similar piece of paper with a similar logo on it for doing inferior work makes little difference.

But that’s not the world we live in. In our world everything people know about the college on your resume matters. In fact, the signaling value of your college degree is so important that Newsweek prints 2,500 words on how what’s happening in a building in Qatar can make your college experience less worthwhile, and they do it without any hint that this is a strange outcome for something that’s supposed to be about your personal development and not what’s happening in Qatar.

If you’re thinking “so what?”, there are a number of downsides to a higher education system that is too focused on signaling. As Bryan Caplan points out in this back-and-forth with Bill Dickens (Warning: may contain wonkiness), the educational value of a college education is a public benefit (i.e. all of society benefits when you learn how build a robot), but the signaling value is a private benefit (i.e. only you benefit by being able to say you went to Stanford.) This means that the more a degree’s value is based on signaling the less society gains from all the things it does (loans, public K-12 education, etc.) to help people graduate college.

Another problem with a focus on signaling is that at some point maximizing your brand and maximizing the educational opportunities you provide to students become mutually exclusive endeavors. Many things, such as hiring brillaint professors, help further both goals. But there are also tradeoffs. Should money be put into athletics (maximizing the brand), or should it go toward buying lab equipment (maximizing education)? Should money be spent on lower quality international campuses that provide valuable experiences for both American and foreign students (maximizing education), or should money be spent on scholarships that will attract the most sought after high school seniors(maximizing the brand)?

Exactly how much signaling value a college degree holds is still a hotly debated question, but like Caplan I think the socially optimal level of signaling is far below where it is today. Unfortunately, as the Newsweek article demonstrates, the importance of signaling is so ingrained in society that instead of actively working to diminish it, people raise a fuss any time there’s a threat to it.


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