The Case Against Education

Bryan Caplan's argument that most of the return to education is signaling — not human capital accumulation — making the massive public subsidy of education a waste from society's perspective.

Signaling model of education: if education primarily signals pre-existing ability, work ethic, and conformity (rather than building skills), then the social return to education is far below the private return. The sheepskin effect: a degree adds far more to earnings than an equivalent amount of education without the credential — proving that the credential, not the learning, drives returns. Policy implication: subsidizing education encourages wasteful credential signaling competition; redirect funds to vocational training. One of the most consequential heterodox education economics books.