Postsecondary education options: The four things you're buying.

_{(This post is part of the series on postsecondary education.  Are you getting tired of this yet?  I noticed that the comments dry up over the weekends.  Well, I have a lot more of this coming, because it is clarifying my thinking marvelously, and I really needed my thinking clarified before I start kids in ninth grade.)}

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I think we can break down the value of a college degree -- or any form of postsecondary education, really, including trade-school studies, apprenticeships, intern experience, military training, studies for licensure exams, and the like -- into these sources.

1. Signals of quality
2. Required credentials
3. Vocational skills
4. Valued experiences

Let's talk about these one by one briefly, and then I'll look more closely at the ones that warrant separate posts.

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Signals of quality.  We discussed the "signalling" value of education in the comments on the post where I linked to Megan McArdle's Newsweek piece.   Megan sums up the "signalling model" like this:

 It’s hard to prove to employers that you’re intelligent, conscientious and persistent, and so you use a diploma to demonstrate it.

Or you could look at it this way (this is me talking, not Megan):

It's hard to figure out which potential employees are intelligent, conscientious, and persistent, and so employers use a diploma as a proxy.

Megan says in her related blog post that there is signal value even in having had "some college." Different degrees (e.g. an engineering degree versus a communications degree) have different signal value to potential employers. The prestige or perceived difficulty of the university also provides perceived signal value.

Whether we like it or not, possession of signal value is an economic good.   It is also, in principle, measurable.

Required credentials.  At first glance it may seem that a credential is just another kind of signal, but they are distinct.  Credentials are different from signalling because they are codified by the gatekeepers of a profession.    

Whether a "required degree" is a credential or a signal depends on how much discretion the employer has.   An employer may write "B.S. required" on the job description for a lot of reasons; but if the employer is allowed to hire an impressive, skilled candidate who didn't finish his degree, the degree is not a credential.  You can imagine this happening in fields like technical sales or journalism:   a sufficiently interesting candidate who can get himself noticed might be able to land a job despite lacking the "required" degree.

But whether they want to or not:   hospitals aren't allowed to hire nurses who aren't certified as R.N.s or  L.P.N.s.   Engineering firms aren't allowed to assign certain tasks to engineers without their P.E.   Trucking firms can't hire drivers who don't hold a commercial license.  Rite Aid can't hire a pharmacist who doesn't have a Pharm.D.   These are credentials.  No amount of experience, demonstrable skill, or character can substitute for them.

Vocational skills.  These are the abilities and knowledge, acquired through education and training, that are really called upon in daily work.  

It includes things learned in specific coursework that apply to a job or to managing a household or other economically valuable activity.

It also includes generally useful learned abilities such as quickly digesting technical information, or communicating clearly, or discreetly handling a delicate situation, or staying up all night to meet a deadline -- as long as those are skills that are really used and needed.  

I would expand it, broadly, to include skills that underlie latent competencies:  the learned ability to acquire more competencies as needed.  For instance, I took a minor in French; I rarely get to speak French; but in learning French I acquired skills that enabled me to teach myself other Romance languages, which I am now teaching children in the homeschool.   Speaking French didn't turn out to be a vocational skill, but "the ability to self-teach a language" did.

Valued experiences.   All the other good things you hope to get out of a postsecondary education.  This category by its nature is subjective, broad, and difficult to measure even in principle.  It includes things like learning to get along with roommates, immersing oneself in a subject for pure love of the subject, staying up late arguing with friends over beer and pizza, building character through hard work, exposing yourself to culture, opening your mind through difficult thinking, and acquiring skills that are valued without necessarily being evidently valuable  to others.  

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When I was telling Mark about this yesterday, I listed the first three categories -- signals of quality, required credentials, vocational skills -- and then said, "And then there's a fourth category.  It includes everything else that you can't put your finger on quite as easily.  Learning to analyze great literature -- of course, for English teachers that will turn out to be vocational -- or having good class discussions -- or sitting in coffeeshops really diving into a difficult math problem, if you like that sort of thing -- or --"

He laughed and told me, "It's the error term."  He took a pull of his beer, apologized for laughing at me, and said, "I can't help it.  The differential equations book is open on my desk right now."

I hung my head and admitted, "Yes.  Now that I think about it, it's the error term.  I guess I can't break anything down into a list without including one."  

I suppose that remembering to include a "...plus everything else you can't measure or forgot to include" term at the end of a list is, after all, a vocational skill for me.

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The benefits of an education = S + R + V + E, where

• S = signal value,
• R = required credentials,
• V = vocational skills,
• E = experiences valued for their own sake (or E can be for error, if you ask Mark).

These four things are what you hope to buy with your money when you set out to purchase a postsecondary education.  

If you are lucky, you may get components of each term that you did not expect but that turned out to be a bonus and that did not cost you anything extra.

Your money will also buy you things that you didn't necessarily want -- things you never wanted in the first place, purported vocational skills that turned out not to be useful, experiences that you thought you would enjoy having but that ended up disappointing you.  

How do you win this game?  How do you maximize the return on your money and your time?  And how do you judge the relative importance of the four terms in the equation -- because different educational choices will give you a different mix?

More on that later...

Comments

[barb]

Don't forget about the other things you don't want: drug and alcohol abuse, STD's, loss of innocence, loss of faith, sexual assault, other violence, etc.
Don't mean to be too cynical, and all those things can happen anywhere, but college campuses can sometimes be the beginning of a very bad road for some young people.
I have sadly seen this way too often, including in my own family.

[Bearing]

That's true, Barb. And I guess I would classify the physical and moral risks of an education as part of the costs -- a hidden cost -- rather than part of what's being bought.