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Reading Caplan's 'Case Against Education'
Caplan argues that the personal value of education largely is signaling, not real skill-building.
by Ari Armstrong, Copyright © 2025
Here I selectively quote from and comment on Bryan Caplan's The Case Against Education: Why the Education System Is a Waste of Time and Money (Princeton University Press, 2018).
The upshot: Caplan persuasively argues that signaling accounts for a large chunk of the personal value of educational degrees. He shows that a great deal of education is a waste of time in terms of skill-building and that students forget much of what they "learn." However, I doubt he adequately accounts for how seemingly low-value classes could feed core literacy skills if they focused on writing. I'm more hopeful than he is that education can be vastly improved. His case supports the position that school and state should be separated (i.e., that education should be completely privatized), but then the right answer to the austerity question (Caplan promotes reduced spending on education) becomes, "Let people interacting in a market decide, and if providers of education can provide a better product for less, great!" Regardless of what you think about Caplan's case for signaling and austerity, Caplan's book also is full of great advice for parents, students, and educators.
Personal Reflections
I hated many aspects of school especially in the younger grades. When I was in third grade (I believe it was), my family moved to Muleshoe, Texas, a miserable little shithole where teachers routinely beat students with wooden boards, often behind thin screens so other students could hear the whacks and the victims' cries of pain. Although I personally never was beaten in school, the experience was traumatizing. It is no exaggeration to say that many of the adults involved with running the school there were moral monsters. But that is not the typical experience! And thankfully for me usually school was substantially less-bad. I did suffer some pretty severe bullying, meaning physical assaults, in eighth grade.
Nearly everything I learned in high school I learned on my own. I was a voracious reader, and I read complex novels and books on economics and philosophy. I did not learn to read in school; my mom taught me through informal phonics. Most of my classes were tediously boring, but I was good at sucking up to teachers, turning in my homework, and prepping for tests. I was strongly motivated by the reward of the grade.
The best thing that happened to me in high school in terms of my formal education was that a teacher panned a book review of mine, which prompted me to get a lot more serious about my writing. The teacher gave me some solid tips to improve; however, my basic skills in literacy came from my extensive independent reading. For that same class I wrote my first real paper, a defense of the reasonableness of Christianity. (Later I changed my mind.) Although I didn't gain the basic skill set in class to write the essay, the teacher did strongly push me toward writing the paper. That's probably the most important thing that happened to me in my K–12 education.
I was an exceedingly good crammer and test-taker. I passed calculus both in high school and in college without actually learning calculus. I passed numerous history tests and then quickly forgot practically everything.
I took several semesters of Spanish in high school and several semesters of German in college and now cannot speak either language, aside from a few words and phrases. So I buy Caplan's case that foreign language classes mostly are a waste of time, although genuinely immersive classes are far better. A relative of mine took language class in Guatemala and actually became fluent in Spanish.
In college, I benefited greatly from a "Great Books" program, in which I actually read Homer, Greek plays, Plato, Aristotle, and the so on, and wrote a bunch of papers. I also enjoyed several philosophy classes and took the readings seriously. I enjoyed reading and analyzing texts. And I enjoyed my economics classes, read most of the material, and learned the graphs well enough to do well on the tests.
I took a real physics class but did not have the background or the study skills to do well in it. I regret that; I could have done okay if I'd spent the time.
The upshot is that I lived both the "signaling" and the "human capital" sides of education. I did gain real skills and real knowledge, but I also spent a great deal of time going through the motions to improve how my academic career looked on paper. I also wasted a lot of time in college, drank way too much, and was not as serious a student as I wish I'd been. But I was still a good student in some of my classes.
Preface and Introduction
In the preface, Caplan assures us he read "piles of research" in "education, psychology, sociology, and economics." He adds, "When relevant experimental evidence is thin or nonexistent (as it usually is), I put my trust in Ordinary Least Squares with control variables." He summarizes this thesis: "Our education system is a big waste of time and money" (repeated in the introduction).
In his introduction, Caplan summarizes the signaling model of education, the view that a major personal value of a diploma or degree is the signal to prospective employers that one has the intelligence, conscientiousness, and conformity to do a job. To a substantial degree, degrees signal competence but do not create competence.
Caplan writes, "Even if what a student learned in school is utterly useless, employers will happily pay extra if their scholastic achievement provides information about their productivity" (italics omitted throughout).
Caplan quickly concedes that "some education teaches useful skills," but holds that "a significant fraction of education is signaling." What fraction? Caplan says "at least one-third" but probably over half or even four-fifths. That's quite a gap! But it's hard to measure, and anyway the skills-to-signaling ratio will be quite different for different students.
Even if education largely is about signaling, Caplan emphasizes, that says nothing about what education an individual should pursue. From the individual's perspective, the insight that education is largely about signaling just means that the individual needs to pursue education in order to send the right signals.
But from the broader perspective, insofar as education is about signaling, spending on education is socially wasteful, as it creates an arms-race among students to out-signal each other and results in students wasting enormous time and resources.
Caplan writes:
To be maximally blunt, we would be better off if education were less affordable. If subsidies for education were drastically reduced, many could no longer afford the education they now plan to get. If I am correct, however, this is no cause for alarm. It is precisely because education is so affordable [for the individual at the margin] that the labor market expects us to possess so much. Without the subsidies, you would no longer need the education you can no longer afford.
This point is worth emphasizing: In Caplan's view, if governments stopped subsidizing education (at least for the most part), people would get a lot less of it, and employers would respond by lowering the credentialing bar for new hires. Basically, a lot of people who now graduate high school would drop out, and a lot of people who now go to college would enter the job market with a high-school degree. The high-school diploma would become the new bachelor's degree for many employers.
Caplan then endorses "the separation of school and state," yet he quickly leaves that idea by the wayside, assuming instead that we're basically locked in the status quo. I wish Caplan had explored the implications of separation more. In a market, education providers would work hard to actually teach students things that matter to employment. And a lot of education would self-consciously be about civic or spiritual values, not monetary rewards, and a lot of people might sign up for that. So I think that, while it's likely that a free market would lead to less spending on education overall and less time spent in school for most people, the free-market view is not necessarily committed to austerity. It's committed to letting individuals interacting in a market decide.
Here is another weakness of the book: Caplan distinguishes between useful and low-value classes, and he puts literacy and numeracy, along with some science, math, and vocational classes, in the first category. That leaves out subjects such as history and civics. But, as Natalie Wexler points out, literacy is not taught in a vacuum; people become literate by reading and writing about particular subjects. So far as classes such as history and literature help students improve their ability to read and write, those classes help build real skills, even if students forget the particular facts covered by the class. But it's possible that those classes typically are taught so badly that they don't even improve literacy skills.
Also, if Caplan got his wish, obviously that would create some short-term adjustment problems as employers struggled to figure out the new landscape. Caplan doesn't deal much with the transition.
Fleshing Out the Signaling Model
Caplan spends his first chapter (following the introduction) expanding on the signaling model. He talks about how education signals intelligence, conscientiousness (the willingness to work hard), and the ability to conform to social expectations and others' guidelines. Caplan also points to some of the decades-old literature on the signaling model.
In his second chapter, Caplan says that English and math are "high usefulness" classes; technical and science classes have "medium usefulness" (although this depends on the student); while arts, foreign languages, history, social studies and "personal use" classes have "low usefulness."
Obviously, some students love the arts, foreign languages, history, etc. Caplan reasonably would say that only a small fraction of students should focus on such things. I tend to agree. Bluntly, students could learn the core contents of most semester-long classes just by reading a good book in a few hours. In a market for education, students who want to spend most of their time creating art could do that (and some do now), just as some students spend most of their time in sports and treat their education as a side-line. Caplan also distinguishes degrees based on usefulness.
Caplan's review of studies on retention is particularly persuasive. The upshot is that Americans are basically ignorant of the subjects they supposedly have studied in school. Caplan also effectively talks about opportunity costs. If teens weren't wasting their time in school, many would gain valuable skills by working.
In Chapter 3, Caplan discusses the relationship between credentials and earnings. The signaling effect is real. Caplan concedes that there's something to the story that more-able people get more credentials, but those people would not do just as well without the credentials. (He gets into a lot of details I won't review here.)
Caplan "piles on" with his fourth chapter, pointing out, among other things, that the "sheepskin effect" is real. In other words, doing the exact same coursework without getting a degree is worth far less on the job market than having the paper in hand.
Caplan's Advice for Individual Students
"For most purposes, the ambitious can safely scorn theory [about education] and follow the money," Caplan writes in his fifth chapter. This chapter can be hugely helpful for young students planning their futures, whether or not they read the rest of the book. The chapter is more detailed than one might expect. Here is the starting point: "The self-help guru who says, 'You need more education' and the policy wonk who says, 'We need less education' may both be right."
Caplan starts with the obvious costs: tuition and foregone earnings. Then he works in complications such as taxes and job satisfaction. The upshot:
Even Poor Students [as defined] can reasonably expect the resources they invest in high school to out-perform high-yield bonds. College, in contrast, is a solid deal only for Excellent and Good Students. Largely owing to their high failure rate, Fair Students who start college should foresee a low 2.3% return on their investment. For Poor Students, it's a paltry 1%.
Caplan's Chapter 6 discusses "the social return to education." Next, he argues "we need lots less education." He closes by discussing why "social desirability bias" causes people to support high spending on education even though it's socially wasteful. In his eighth chapter, Caplan argues for more vocational training.
In his ninth chapter, Caplan addresses whether we should view education as a "nourishing mother," whether "ideas and culture matter more than dollars and cents." Caplan argues that a good education (a "merit good") requires worthy content, skillful pedagogy, and eager students. But the education that most students actually receive offers none of those things. In fact, schools just don't do much by way of molding students.
Caplan includes a telling quote by British professor Greg Clark:
In my second year as an assistant professor at Stanford University, I was assigned the task of mentoring six freshmen. Each appeared on paper to have an incredible range of interests for an eighteen-year old: chess club, debate club, history club, running team, volunteering with homeless shelters. I soon discovered that these supposed interests were just an artifact of the U.S. college admission process, adopted to flesh out the application forms and discarded as soon as they have worked their magic.
Caplan is not against "soulcraft" education; he just thinks for the most part people should pursue it on their own, not via the super-expensive education system.
Here's a great bit from this chapter: "Give students numerous, diverse, yet realistic options. . . . Expose boys to nursing. Introduce strong math students to insurance. Tell upper-middle-class kids what plumbers and electricians do and earn."
In his tenth chapter, Caplan presents dialogues on the topic to drive home his points.
Caplan offers a succinct conclusion. Here's part of what he says:
Students forget most of what they learn after the final exam because they'll never need to know it in real life. The heralded social dividends of education are largely illusory: rising education's main fruit is not broad-based prosperity, but credential inflation.
And:
Employers can't afford to give every applicant a chance. They need rough-and-ready ways to decide whom to interview and whom to hire. In our society, academics are the focal metric. It's intrinsically appealing, since academic success calls for a blend of brains, toil, and submission. And over time, this intrinsic appeal has fed on itself. Education is now the way the adult world measures the promise of youth. Scholastic failure doesn't merely reveal a lack of talent and drive; it signals deviance.
And:
Slash government subsidies. This won't make classes relevant but will lead students to spend fewer years sitting in classrooms. Since they're not learning much of use, the overarching effect will not be "deskilling" but credential deflation. . . . The less education applicants have [generally], the less [individual] applicants need to convince employers they're worth hiring.
In his afterword to the 2019 paperback edition, Caplan offers some replies to critics.
ChatGPT does a pretty good job of summarizing major criticisms of Caplan's thesis.
Check out Caplan's Bet On It blog and his other books for more.