Setting the signaling model of education straight(er?)

Note: free business suggestion below.

You might have heard about the so-called "Signaling model of eduction", promoted by Bryan Caplan at GMU (among others!), and it's something I find plausible.

First, some background: The problem is to explain why people who get a college education are more able to get jobs, and better paying ones. The traditional explanation is that colleges provide you with knowledge skills that allow you to be more productive. (This has always seemed suspicious to those of us who have remarked, throughout our education, that "I'm never gonna use this stuff" ... and been mostly right.)

The signaling model, in contrast, says that completion of college simply reveals your possession of good traits for hiring that you already had before, but could not convincingly claim to have until you completed college, since a college degree indicates some combination of intelligence, willingness to do boring stuff that doesn't make sense, and capacity to be indoctrinated into and conform with a group (I'm simplifying a bit). These things are hard to test in a job interview, or, in the case of intelligence, usually illegal to test for.

A few years ago, I pointed out (HT: Bob Murphy [1]) that one usefully testable implication of the signaling model is that you should be able to earn big profits by running a business that provides high school graduates with the same "signals of good qualities" that a college provides, but at significantly lower (monetary) cost to them, simply by "cutting out the fat" -- all the stuff that doesn't help to signal the student's ability. You would just set up some school that filters students by IQ, and then puts them through hell, gives them difficult assignments, poor living conditions, etc. No way an unemployable person could survive through that kind of regimen, right?

So there's your idea: you make students just as employable, but they don't have to take on nearly as much debt.

Interesting caveat: in one discussion of my idea, someone mentioned that this business model is already in widespread use: specifically, the military! Let's go through the checklist:

- Cheaper than college? Check. (Heck, in terms of money, they pay you!)
- Enforces indoctrination and unquestioning following of direction? Check! [2]
- Selects for people who are willing to give a lot to a big organization? Check.
- Employers regard service therein as equivalent to college experience? Check (usually).
- Gives experience doing boring tasks because you were told to? Check.
- Generally puts you through hell? Check.

Wait, this can't be right, can it? This comparison fails in that the military doesn't filter people based on an IQ test! Hah!

Not so fast -- they've got that one covered: in the US, it's called the ASVAB, which determines whether you can get in, and then which branch, role, or officer status you're eligible for. (My mom used to pass on her dad's remark that, "the army'll take anyone who can crawl there, but not the Coast Guard! An exaggeration, of course, though the branches do have different score cutoffs.) The ASVAB is, in content, an IQ test.

Now, if you can provide a better value than the military (say, to people who don't want to possibly be put in harm's way), here's your business idea!

[1] Yes, a hat tip for pointing me to my own post,.
[2] Note: this isn't always a bad thing. As Eliezer Yudkowsky put it in that article:

Let's say we have two groups of soldiers. In group 1, the privates are ignorant of tactics and strategy; only the sergeants know anything about tactics and only the officers know anything about strategy. In group 2, everyone at all levels knows all about tactics and strategy.

Should we expect group 1 to defeat group 2, because group 1 will follow orders, while everyone in group 2 comes up with better ideas than whatever orders they were given?

In this case I have to question how much group 2 really understands about military theory, because it is an elementary proposition that an uncoordinated mob gets slaughtered.