When I argue with mainstream labor economists, they grow frustrated. “Is everything signaling? I have trouble believing workers can’t find a cheaper way to certify their quality,” they say. I’m tempted to snap, “Is everything human capital? I have trouble believing studying Latin makes you a better banker.” My constructive answer, however, is: Of course everything isn’t signaling. Students definitely learn useful job skills. School lasts over a decade. It would be amazing if students didn’t learn something useful before they left. My claim is that education is mostly signaling. Given all the
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