Tuesday, April 28, 2009
Questions to ponder
One potential solution to these problems is signaling. For instance, imagine there are two types of workers -- good and bad. Firms can't distinguish among them. As such, they offer a single wage to both types. However, firms would gladly pay more to good workers if they could identify them. This creates an incentive for good workers to distinguish themselves from bad workers. Signaling is one way to do this. The key assumption for signaling to separate good and bad workers is that obtaining the signal is sufficiently more expensive for bad workers than good, so only good workers want to obtain it.
College is the classic example of a signal. The assumption is that good workers find education cheaper than bad workers, so good workers go to college and bad workers do not. One implication of this view, however, is that college is not necessarily about skill acquisition. Rather, it is a form of ability revelation.
What do you think? Setting aside the consumption aspects of college (e.g., it is fun, you like learning stuff), do you think that college (for you) is primarily about signaling or investment in skills? That is, do you think that you needed to come to college to acquire valuable skills that you couldn't have obtained as cheaply otherwise (e.g., through on the job training/experience or self-study) or is your attendance here really just about separating yourself from others for whom the effort to complete college is too expensive?
This is an important question. College is very expensive (in terms of both time and money). If it is really just about signaling, is it conceivable that we could develop alternative methods of providing workers with credible signals of their abilities with far lower costs (and thus improve total welfare)?
In my case, I feel as if any job I get will void most of what I have learned in college, and inject in me a set of new skills that are actually pertinent to my job. As a signal to future employers(hopefullly it will prove useful),as a social tool, as a way to improve my pool skills, and as a way to live by myself and grow individually, it has been useful. In terms of the education that I got, it hasn't been too valuable.
Despite the fact that I do believe college is more about signaling than an investment, I am not sure what would be a good alternative method. Tests would not account for work ethic, the ability to work in groups, or presentations. It seems like there should be some kind of less expensive (both in time and money) way to accomplish the same task, but I don’t know what that would be.
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