I recently listened to an excellent EconTalk podcast with Arnold Kling discussing technological changes in higher education. Kling pointed out the main role universities play is sorting, not forming.
There is a somewhat romantic idea among the populace that education molds and shapes young lumps of clay into the men and women they ought to be. In this view, what school you attend is very important, because they have the power to mold you for better or worse. Kling combats this notion by reference to studies that have tracked students accepted to Ivy League schools: They achieve the same level of success whether they attend the Ivy League school or choose instead to go to a lower ranked college. In other words, it’s the type of student that goes to Harvard, not the type of student Harvard creates, that makes for success.
For employers, this sorting mechanism significantly reduces their hiring cost. Kling described the process as a coin sorting machine, where you dump in a pile of loose change and is sorts all the quarters, nickels, dimes and pennies. An employer looking for a certain skill level would be at great pains to sort all the applicants, but the type of institution from which they have a degree does a lot of the work for them. What a student majors in also play a part in the sorting process.
Though this works reasonably well for many employers, it’s pretty inefficient. Does it have to take four years and a few hundred thousand dollars to sort out who excels at what and who’s worth interviewing for which roles? The signal sent by many degrees is getting weaker as more and more students flood into schools. With the exception of the top schools, many middle of the road universities have turned into massive degree mills. The printing of more degrees makes those already in circulation worth less to employers.
But there seems to me a worse problem. Even if college serves as an effective sorting mechanism for employers, it is seriously deficient as a sorting mechanism for employees. After all, a career is a two sided affair. It’s not a matter of businesses finding out what you’re good at and allocating you there; it’s primarily about you finding what you love and what helps you get the most of what you want for the least of what you don’t. The student needs a sorting mechanism to discover what industries, what kinds of work, and what companies they like. College doesn’t have a lot to offer here.
Most degrees do not entail any kind of on the ground experience in the business world. In fact, most classes don’t even talk about what different kinds of work are like. You may enjoy learning philosophy, but that fact alone doesn’t do a lot to tell you which career paths are your quarters, nickels, dimes and pennies. Students spend tens of thousands and a good chunk of their time tumbling through a system that gives employers some valuable info about who they are, but it provides the student with little info about who these employers are. It’s like a dating service where only one side gets to view the profile. It’s not uncommon for graduates to spend the first five or ten years of their career discovering what kind of career they want to have.
There are a lot of things students can do to remedy this problem. They can seek knowledge, ask people with experience, take a wide range of courses, and explore different majors. But at the end of the day, nothing beats genuine experience in the world of commerce. As it is, most students are expected to cram that in an internship for a semester or two. That’s a lot of time and money to burn if you don’t walk away with a good idea of what makes you come alive.