Community College: Investment or Signal?

I haven’t yet made up my mind about Obama’s proposal for free community college.  Well, I have made up my mind on one (arguably small) aspect: ain’t gonna happen.  His proposal is nothing more than that: a proposal for a bill that would have to be passed through Congress.  The GOP-led Congress has no interest in Obama’s proposals as a general matter of principle, and even less in proposals for expanding public education.  There are many more contentious issues, most raised well by Andrew Sullivan and readers: what are the costs, what are the benefits, and will this truly benefit the worst-off or the generally well-off?

I do think this hinges largely on whether you believe higher education is a human capital investment or signaling.  If it’s investment, then this is unequivocally a good thing even if it might not be the wisest investment compared to primary education.  If education is just a signal of hard work and intellectual ability, there’s no social benefit to increasing the education level of the marginal.  It will just push up the competition for jobs open to current associate degree-holders, and encourage them to get four-year degrees, and so on up the credentials chain.  Tim Worstall makes this point well.

One thing I think can be neglected is that it’s implausible to believe that education is just signaling or just human capital investment.  It’s surely some of one and some of the other, and different for different degrees and people.  A BA from Yale in English may be almost pure signaling, while an Associate’s from a community college in electrical engineering is probably mostly investment.  Correspondingly, the value of the Yale degree resides less in the education one receives than just how competitive it is to get one.  I suspect that most community college degrees lie further towards the investment end than might be obvious to social elites, who are highly attuned to signaling and positional goods.  That doesn’t necessarily mean it’s the best investment of money – again, probably there is much lower-hanging fruit in earlier education.  But I think that increasing the number of community college graduates by one will likely yield far higher social benefits than increasing the number of Ivy League graduates by one.

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