Does Higher Education Increase Human Capital?
The cabinet secretary for education recently announced the government will stop funding universities and that they should look for alternative sources of income. Critics however argued this plan would cripple our human capital and dim our hope for growth. In this article, let’s assume the government stops funding universities, what will be the opportunity cost? Will our human capital dip substantially or things remain largely the same?
To answer the questions we have to make serious arguments on three fronts.
- That universities teach students useful skills to solve real world problems and that these skills are evident from the degrees they acquire.
- That employers prefer degree holders than high school graduates because of these unique skills.
- That these skills form the education premium of human capital.
These arguments should be very easy to defend, and since human capital is easily discerned from the job market, we can prove the utility of university education based on what employers request as a prerequisite for employment. For most jobs, a degree is the bare minimum because, as many would argue, it proves the candidate has acquired some skills at the university that will be useful for the job. These skills cannot be acquired anywhere else and most high school graduates don’t possess them.
But this position rests on a shaky premise because employers have no way of knowing whether the specific candidate possesses the kind of skills stated on the degree. During my time at the university, we spent whole semesters watching movies, partying, and doing drugs then used the last week of each semester to cram for the exam. Finals would come and a large majority would cheat then forget everything they had crammed moments after the exam.
This anecdote proves a few things. First, that students understand the value of good grades and a degree which is why they cheat in exams. No student wants to harm their GPA or get a pass. Second, students know whatever is taught at the university isn’t very useful to employers and that’s why none of them attempts to learn it. The partying, skipping classes, cramming, forgetting course materials, and not reading are a reflection of this fact. So what are employers looking for if not skills?
Signalling theory answers this question succinctly. To the employer, the degree is nothing but a signal for intelligence, conscientiousness, and conformity. There’s already evidence intelligence is a strong predictor of job performance and employers want smart employees who have insights and are good problem solvers. Conscientiousness on the other hand is characterized by motivation and an elevated work ethic which is something employers want for enhanced productivity. A four year degree signals that an individual has an above average work ethic and is sufficiently motivated to wallow through higher education drudgery.
Graduates also signal conformity; the tendency to adhere to social norms like pursuing status symbols like degrees even when not backed up by actual skills. Degree holders aren’t very undoctrinaire and employers don’t want people who don’t follow rules and can’t work in teams. The trifecta of intelligence, conscientiousness and conformity are important traits for the job market and are what comprises human capital.
You might probably ask why universities are so hell bent on cracking down on cheaters or making sure students attend at least 75% of their classes. The reason is not because universities want students to learn actual skills but because they want their degrees to be an accurate signal of intelligence, conscientiousness, and conformity. Universities want to be respected by employers not for conferring skills but for churning out degrees with accurate signals. If students from university A are found to be ‘not very smart’ employers undervalue the degree from that university and pursue students from other institutions.
If you follow this line of thought you will learn why awarding too many degrees is never a good deal for the job market. If anybody can get a degree, then the signalling value for that degree becomes unnecessarily noisy and employers have to look for other filters like giving aptitude tests during interviews. But this is a subject for another day. Now off to something else. How important is education and do students learn anything in school?
Do teachers teach students how to think?
It is worth noting that not all students go to the university. Those with lower grades drop out after high school and join the work force. Yet it is important to understand whether the average university degree holder is more knowledgeable than the average high school graduate, or rather, whether there’s any additional knowledge the average university student gained that the high-schooler didn’t. This section is meant for skeptics who aren’t satisfied with my discussion in the previous section.
Teaching isn’t a very easy thing to do since students never learn a majority of the stuff they are taught in school. Even when they do, much of what students learn isn’t very useful. Students also forget what they learn in hours if not minutes — a process called fade out. Those who think schools “teach students how to think and not what to think,” will be surprised to find out most students cannot apply what they have learned in one context into another, or from one subject to another. Many do not apply what they learned in school outside school.
For both university students and high school graduates, much of what was learned in high school was useless. We know this because a larger chunk of what students learn in school isn’t absorbed by the markets or is useless elsewhere outside school. The chart below shows a larger majority of arts and humanities subjects aren’t very useful. Only literacy and numeracy skills appear to have any use.
At the university level most of these subjects are distilled and discarded. Unless someone wants to become a history teacher, then nowhere does history appear as a core subject. People who learn foreign languages also rarely use them. I used Duolingo to learn some Latin but I’ve never found a viable opportunity to express myself in it. I have a friend with a certificate in French who can barely utter a French word. People tend to be very fluent in one specific language and often than not, the language was learnt at home so schools can’t take the credit. Personal-use subjects like P.E and sign language aren’t particularly useful either.
I presume most of you are very sympathetic with history or science — which has mid-usefulness. But the level of illiteracy in history and science is damning, revealing students learn almost nothing about these subjects. In the United States, adults were queried of their understanding of both basic science and history and the results weren’t surprising. Students learn nothing from these subjects. Questions were as simple as whether the American civil war happened before or after the war of independence (true/false), or whether antibiotics kill both bacteria and viruses (yes/no), whether cloning produces genetically identical copies (yes/no), all radioactivity is man made (true/false), the center of the earth is very hot (true/false), what part of the government has the power to declare war in the US (president/congress/supreme court), the US constitution establishes which form of government? (democracy/republic/ confederacy/oligarchy)
If you control for guessing, since most questions require a yes/no or true/false answer, you find that virtually none of the surveyed individuals knew anything to do with the Big Bang or evolution. Only 14% knew viruses are not killed by antibiotics, and less than half of the respondents knew the sun does not go round the earth. The same pattern is observed with history. In Kenya, I figure the problem could be worse (Read: the learning crisis in Africa) and I doubt a large majority can answer basic history and science questions. So what exactly do students learn in school? One could argue students learn literacy and numeracy, or they learn to think and not what to think. But how useful is math?
Mathematics is one of the most useful subjects but a large portion of what is taught is actually useless. Students perform well in geometry but never get to use it anywhere else in life. Statistics is one of the most useful skills to learn but is the least understood by students. After high school, a lot of what is learned in math class is discarded and only a small minority of university students have math units. Mathematics is so useless at the university level that a math degree-holder has scanty job opportunities. If lucky, students with math degrees are employed in other job roles that require very little use of advanced math. Therefore, while math is important for basic numeracy skills, a large chunk of it isn’t. We have other professions that rely heavily on math like engineering but the number of students who get into this profession is low. The chart below shows the most useful careers and the number of graduates they churn out.
That leaves us with many students who get into partially useful careers like education, business, transportation, and public administration while an even larger majority pursue useless careers where the number of graduating students far exceed the number of jobs. For instance, in 2009 there were 3,500 historians in the United States even though 34,000 new graduates were minted. In the whole US, there were 174,000 practicing psychologists but in the same year the number of students graduating with a degree in psychology was 94,000. This information leads us to certain conclusions. First, that even though some students get As in high school, a lot of what is learned is useless. Those who get these As just happen to be smart and conscientious. Second, after smart students go to the university, a lot of what they learned in high school becomes obsolete and only a narrow group of students pursue relevant and useful careers. What do the rest of the students do with the useless education they get? The answer is nothing, and it’s even funny because by the time these students graduate, they usually have forgotten everything (Remember students party and cheat).
“But but but….schools teach us how to think and not what to think.”
Even though I’ve shown students learn nothing and whatever is learned is often forgotten, skeptics will argue schools teach students how to think. In short, what students know or not know is irrelevant, of importance is they learn how to think about complex issues. This position looks water-tight but it’s not. The idea of knowledge transfer is well studied and the findings are equally depressing. Students rarely develop any reasoning skills in schools. Testing this concept is easy because you only have to teach a student to solve one problem then expect them to solve a different but similar problem. We expect they will transfer knowledge from the first problem to the second as depicted in the image below.
Both the military puzzle and the medical puzzle were relayed to students back to back. The students were supposed to figure the medical puzzle using ideas from the military puzzle. Even though the medical puzzle has a similar solution, the success rate was only 30% with 10% of the students giving the right answer without hearing the military puzzle. That means only one in five students transferred knowledge from the first puzzle to the second. To reach a pass rate of 75%, students had to be told in plain terms that the solution for the medical puzzle is what was provided in the military puzzle.
This tells us many students cannot apply what they learn in one problem to another, or what they learn in one class to another. Very few use anything they learn in school outside school. Similar studies show that students’ reasoning skills were rarely different even after years of education. After four years of high school, student reasoning skills remain roughly the same. A similar effect is replicated at the university level.
Imagine after four years of high school the change in reasoning skills is just 0.5. Equate that to the amount of money a typical parent spends on the same. In college, reasoning skills remain largely the same. At the university level students demonstrate higher reasoning skills but it is doubtful whether education is behind these gains considering in the four years of campus reasoning skills don’t bulge. The higher reasoning skills are mostly a proxy for intelligence and not education. So what exactly do educators mean when they say schools don’t teach what to think but how to think?
Conclusion
A few things are evident from this discussion. That university degrees are valued by employers because they signal intelligence, conscientiousness, and conformity and not because these students have any important skills. That most of what students learn from primary school to university is either useless or irrelevant. That students have limited memories and they forget a large chunk of what they learn. That students rarely transfer knowledge learned in school into other spheres of life. That the idea human capital is developed by education is dubious. That intelligence and conscientiousness are more important for a country’s human capital than “education.” That I forgot most of the math I learned in high school, so if you may, help me calculate the opportunity cost of defunding universities.
