Brian Kaplan (2:55)

Out of all the things that I've written, this is the only one that really goes back to my early childhood. Even in kindergarten, I was puzzled by what was going on in school. Why do we learn this stuff? And the answer I would get from adults as well, you have to do this to get a good job. Which kind of checked out, but was still weird. It's like, yeah, but why do I learn need to learn about the American Revolution in order to work in a bank? Doesn't really seem very relevant. And then of course I didn't, I didn't know any economists when I was a kid. I don't even think I really knew the field existed. But when I was in middle school, I think I got some very simplistic model of, okay, well what's going on is that you're jumping through hoops in order to convince other people that you're worth considering. And then it was in my senior of high school that I started learning economics. And a little bit after that I said, okay, so there's actually a whole sub part of Economics of Education where they've already figured out my story and in a lot more detail than I have and with a lot more rigor. But even then when I realized, huh, this is basically just pure theory and almost no one takes it seriously as the actual true story. And that's what is original about this book. I don't claim to have come up with the theory of educational signaling. People before I was born were working on it. But I did find it strange that even the people that in a sense devoted their career to it only took it as an intellectual curiosity rather than as a deep true model of what's really going on. And that's what I try to do in this book, is just to pull together all the evidence to convince people it's not just a toy model, it's our lives.

Caleb Zakrin (4:33)

Yeah, we spend so much money on education, not just educating ourselves. It's obviously a massive investment for, for people. Even if you go to public school and then go to private college, you're still spending hundreds of thousands of dollars on education, if not also on tutors and, and grad School Years of our Lives.

Brian Kaplan (4:53)

The sand going through the hourglass.

Caleb Zakrin (4:56)

Yeah, it's, it is amazing. You know, most people or a lot of people, you know, they, they, they to at least 12, 13 years of school plus another four as you put it in the book. I guess you're now in 50th grade or something like that now. So for certain people, I think like you and like myself, I loved school. I loved being in it. I loved taking these courses that I never use today at all. I certainly enjoyed it. I can't say it was necessarily the same for my peers. I think other people were taking classes. You know, you might take Russian lit because you thought it was going to be an easy a. Certainly easier than an engineering course, though it could depend from teacher to teacher. What does the data say broadly about the economic value of educational attainment? Regardless if you learn anything, what do we know about what people will make in the long run?

Brian Kaplan (5:55)

All right, that's a question where to answer it. You wind up understanding how economists analyze big questions in general. Normally what we do is we just start we're a normal person, which is just what's the raw average? So at the time that I was writing this book, for example, bachelor people with bachelor's degrees made, I think, 73% more money than people who only had high school degrees. So it's like, all right, well, like the simplest story would just be that you get a college degree and you make 73% more money. But standard economist replies, well, hold on, slow down. We don't even know if any of this is causal. It could all just be selection. It could just be like, rich people go skiing. Doesn't mean that skiing causes you to be rich. But then it's like, but maybe it does. Maybe you meet other rich people on the slopes. And so I'm like, yeah, that's right, that could be. And it's all really complicated. There's a bunch of standard approaches to try to get to this true causal effect underneath this surface average. 1, 1 Traditional starting point is to say, well, what are the other explanations of what's going on? All right, well, maybe it's the people who are smart make more money and smart people just coincidentally get more school. So let's go and statistically control for intelligence and let's try to get other possible things that might be these confounding factors. So that's traditionally one of the main things that economists do. I also mentioned the book that there's a bunch of more cutting edge techniques that people try for Example like if you can, of course the ideal one is if you could randomly assign people to get extra school or not and then compare and they're otherwise matched, that would be perfect. That's basically almost impossible to do. But there's a bunch of things that people think of are kind of like that. And I talk about those. Anyway, after going through all of this, my story is probably reasonable estimate of the actual true causal effect of education on earnings is something like 60% of what the ICs. So there still is a very substantial gain. It's not as big as it looks. And then obviously there's no one thing called education where you should go and say, all right, well different majors have different payoffs, different schools, different payoffs. And in the book I actually try to go through all of this in a lot of detail because this isn't just an academic book, it's also a self help book. It's also about trying to tell people if you are planning your educational career, well, these are the relevant facts and this is what's going to pay and this is what's not going to pay. And especially if you tell me more about yourself, I can tell you more about what will help you or what won't.

Caleb Zakrin (8:35)

I think that oftentimes people who are against going to college, they will trumpet examples like Mark Zuckerberg or Bill Gates and say, see, these smart people dropped out of Harvard and they are billionaires. So if you too drop out of college, you too will be a billionaire. Why is this argument not very effective?

Brian Kaplan (8:57)

I mean, I think it's actually a very effective argument. It's a terrible argument, but it's highly effective. I think a lot more people were persuaded by that argument than by my book, the Truth. The book requires you to spend a lot of time thinking about stuff, whereas that's just like, oh yeah, those guys are billionaires, they didn't go to school. Exception that proves the rule. Of course there actually are some very smart economists who know better who said, well, maybe that's the way it works. Maybe it's the people that are the best that don't go to school even though actually we have a pile of data showing no, that is totally exceptional and you should not base your plans on that at all. I mean, but you know, like, like if there was a really smart kid who had a, a business that was already starting to go, that's where I might say maybe you shouldn't continue with school. But even there I'd say no, no, come on, like, like the, this, your Your business is not going to work out, probably, or at least this is not such a critical time. You've got to go and drop out of school right now to work at the business full time. You could do both, and then you'll have a backup plan. That's what I tell almost any child of my own.

Caleb Zakrin (10:11)

And a lot of it is thinking about individual choices versus the social impact of everyone making these choices, or at least of policymakers making the argument that if everyone gets an advanced degree, then we'll all be richer and smarter and we'll, you know, live in the good society. I want to get to that, but. But I want to talk a little bit about these two ideas about what education does that you sort of set up as extremes to kind of think about what education does. So on the one hand, there's the human capital model, which is the idea that the more education you have, the more skills you obtain and then the more money you'll make. On the other hand, there's the signaling model, which is you don't learn anything necessarily in school, but what it does is it certifies that you know enough to be able to then have a job to make a lot of money. So can you talk about these two different competing models?

Brian Kaplan (11:02)

Yeah, sure. Think about this. There's two ways you can raise the value of a diamond. One is you get an expert gem cutter who shapes it just so. The other one is you just hand it to the appraiser who looks at it really carefully and says, okay, this has no flaws. And he puts it in a little box for grade A or whatever. And putting in that box raises its value. Right. So the first story is like the human capital model of education where it says that you're actually going there to be shaped. It's a skills factory. The typically an unskilled, uneducated human being goes there and they transform you and then you emerge. Oh, and now you're great. All right. The other one is you arrive with or arrive just as you are. They don't improve you, but you get certified. Or as I like to say, when I go to Spanish speaking countries, you, you know, you get las. A stampas. Lasampas on your forehead. Right? The stamps on your forehead, the certification. Right. Now, while I've had many critics who say Brian says it's all signaling, I go out of my way in the book so many times to say no, I'm not saying all. I don't deny that you get some useful skills put into you in school, but I do think that it's a very large share of the payoff is from signaling. And my preferred estimate is 80%, though I'm not married to that. I think that it's a round number. Anyway, that's the basic story is that according to me, most of the reason why education pays is it just convinces employers that they shouldn't throw your application in the trash, that you are worthy of another look, that you are educable. Right. That you're trainable. Right. Employable. So that's what I think is most the story. Even though obviously in terms of the propaganda you get from parents, teachers, politicians, the it's almost all, you go here and you get scales and you get smart. Number of times, oh, you go to school and they make you smart. It was like, yeah, that sounds mostly wrong. Although even there, like, not entirely. But I, you know, I go over that evidence in the book as well.

Caleb Zakrin (13:07)

What are some of the arguments that people offer in favor of the human capital model and what do you see? Some of the most compelling evidence against

Brian Kaplan (13:15)

this argument, the most popular argument, is also the worst. And it's just, well, what other explanation is there? That's why I just told you the other explanation. Right, but in terms of some of the better arguments, I mean, one is just like, well, like, it just doesn't make sense that you have to spend so many years to get the stamps. Doesn't make sense. Like, why does it take so long to get certified? Why can't you just do an IQ test in three hours and then you can move on with your lives? Why is it that employers don't just hire people who are accepted to Harvard right out of high school and train them directly rather than having them go and do four more years and then come and work for them? So those are some of the better stories. And you know, for that first one where I say is, look, if all that education were signaling were intelligence, that would make perfect sense. But it's signaling more than that. It's also signaling conscientiousness, work ethic, conformity. And the key thing here is that if you meet, as I have many times, a super smart person who doesn't have much education, your natural inference is not that, well, he's really smart, but he's only average in work ethic or average in conformity. It's like, no, a guy that's smart should sail through school almost effortlessly. So the inference you draw is this person is probably very dysfunctional in terms of work ethic, informity and all my firsthand experience with really smart, low education people fits that. It's like, all right, you're a brilliant, but I would never hire you, you're so screwed up. And by making people go through this, what I describe as a war of attrition of this year after year after year, the people who have all of these other issues get weeded out. And then the people at the end have the package. They have the package of being smart, hardworking and conformist. And you really need all three to be a good worker. In terms of that other challenge which I think is the cleverest, it's like, why don't you just see Goldman Sachs hiring people right after they're accepted at Harvard? Why do you have to actually go if it's signaling? And that's where I'll say, well, there's something in economics that we talked about called adverse selection. And it just says that, well, what's, what kind of a person would get into Harvard and then say I'm not going to go to college at all? Like in our society, like think about what their parents would say, what all their friends would say, and what kind of a person would say, yeah, I don't care what my parents and friends say, I'm just going to go and do this thing. This is a case where the kind of person that would get into Harvard and then not go again is probably very screwed up in these other ways, such that as an employer you should be quite frightened by the prospect of hiring those people. So, you know, of course there's tons of other arguments, but I think those are the ones that give me the most intellectual challenge. Although I think there's very solid answers to them.

Caleb Zakrin (16:09)

Yeah, I think that the, that the emphasis that you put not just on intelligence but on conscientiousness and conformism is a really important factor of the book. Like you said, if you encounter someone who's extremely intelligent but they haven't jumped through the same hoops that the others have jumped through, then you, then you wonder, well, why didn't you jump through the hoops? Maybe there's a good explanation. Maybe they had a, you know, a multi million dollar business that they were

Brian Kaplan (16:32)

busy building or more likely like tragedy in the family or you know, personal difficulties. But a lot of what we've done by making education so accessible to almost everyone is it really has drained the pool of people who are good workers but don't have much education. Whereas in earlier times that pool was quite full. I mean, I mean, like, like how do you know? Well, because college degrees were so Rare before World War II. And yet we had a whole bunch of managers and other people running things. People had to be smart to do these jobs, but they just didn't have the credentials that you would have today.

Caleb Zakrin (17:07)

One of the most compelling pieces of evidence that I find that you discuss in the book is the fact that people's income expectations rise considerably, not just by additional years of educational attainment, but actually getting degrees. And could you talk a little bit about this? The sheepskin effect that you discussed? This idea that if you have the degree, it's the. The degree that matters, it's not the years of education.

Brian Kaplan (17:33)

Yeah. So if the way that education raised your earnings was by teaching you skills, then it seems like every year should be pretty similar. Right? Like, why would you go and wait until senior year to actually deliver the useful skills? Why wouldn't it just be a continuous process? But what we see in terms of earnings is that the payoff for intermediate years is generally quite low, and then the payoff for graduation is sky high. So let's see if I'm remembering, I think that about 60% of the payoff for high school is just from the last year. Right. And maybe it's. I think it's about that. And then for college, I think it's more like 75% of the payoff is from that last year. And for graduate school, we have less data, but it seems plausible that 100% is coming from the actual completion. And I did five years of a PhD, didn't finish is not something that employers really care about in terms of what's going on here. It's like, well, like, shouldn't it just be the same thing where every year signals something like, not if part of what you're signaling is conformity. Our society expects four years. A conformist person will do four years. And you can see that in countries like the UK where college lasts three years, three is the magic number instead of four. The only real reply to this is, okay, well, there's some. So there's some kind of selection where the people that finish were better all along. And I'm in general sympathetic to that. But it's like, okay, in what way? Right? In what way? In what measurable way? So, you know, if you go and you look at intelligence, for example, if you do statistical controls for that, that doesn't make this sheepskin effect, as it's called, go away, by the way. Like, why the sheepskin effect? Because diplomas used to be printed on the skin of sheep. That's where it comes From. So while in theory it could be that that just is highly implausible. And of course, if you just been through the system, that makes almost no sense. I. A challenge I have is for anyone who's ever supervised a dissertation. What do you say to the student who the day before the defense says, eh, what's the point? I have all the skills, I have all the human capital. Why do I need to show up to the fence? And it's like, just show up at the defense. You get a stamp on your forehead. It's like, yeah, but I thought you said signaling's wrong. Not today it's not. Today signaling is correct. Show up and do and offend your dissertation.

Caleb Zakrin (19:47)

Right. And I think that to a certain extent, when it comes to signaling, we might acknowledge on a certain level it's like, okay, maybe a lot of it is signaling. That being said, okay, so what if signaling is most of what a degree symbolizes, then why should I as an individual care? What are the broader consequences?

Brian Kaplan (20:15)

Right. Yeah. So that's a key part of the book is for the point of view of an individual who just wants to get it, making a. Get a good job and make money. It doesn't really matter why the system works. You just say, oh, this is the system. If you're a curious person, you might want to know, I'm a curious person. You seem like a curious person, Caleb, but yeah, otherwise it's just not important. But for a society, it is crucial because if education works by teaching skills, then it is a viable strategy to say, let's enrich our whole society by. By educating our whole society more, raising the scales of our old society so we're able to do more stuff, and that will work. On the other hand, if what you're doing is just jumping through hoops in order to show you're better than other people, then the effect of raising education is not going to be to enrich the whole society because you're not building your skills. The effect is going to be what's called credential inflation, where you need more degrees just to get the same jobs that your parents and grandparents got with less. This grid inflation idea, the book actually came out, as you said, in 2018. And then two years later, we went through an inflation roller coaster. Covid related. Which makes the metaphor all the more potent, because the reason, there's a reason why we call it commercial inflation, which is almost everyone, even if you've barely done any economics, understands. Look, you can enrich one person by printing off some money and giving it to him. But you can enrich our society by printing off a pile, a really large pile of money and giving everyone a fat stack that's just going to wind up raising prices. And I say the same story is going on with education. You can enrich one person by just handing him a fake Harvard diploma, but you cannot enrich our society just by raining diplomas down upon us. It changes the meaning of the degree.

Caleb Zakrin (21:57)

There's a lot of statistics in this book about how we've become more credentialed in the United States and other countries, you know, over the course of the last 60, 70 years. You have this line in it that I thought was quite, quite funny. That this idea that if everyone in this society has a bachelor's degree then to become the janitor you might need a master's in janitorial studies, which I think, I think kind of drives from the point that it's. If everyone has the same degree then how do we determine who's fit for which jobs? You also talk about too how, you know, how this is a policy that a lot of, you know, politician politicians have pushed for more education. Obviously there's a whole, you know, there's a whole debt accumulation, you know, student debt accumulation regime that's dedicated to getting more people into school.

Brian Kaplan (22:55)

Is there like a debt forgiveness regime?

Caleb Zakrin (22:59)

Right, to deal with the problems, right to deal with the problems that have been, have accumulated from the fact that there's, that there are so many, so many mal employed people who, you know, are in a position where they can't necessarily pay off their, their student loans. You, you talk about how, you know, it used to be the case that, that about 30% of government employees I think didn't have a college degree and now it's less than 3% don't have English High.

Brian Kaplan (23:27)

I think you mean high school, but

Caleb Zakrin (23:28)

yeah, high school, yes, a high school diploma. So, so, you know, the one argument might be that, that this is the, you know, that someone might make is that this is driven by the government. The government is the one that wants us to be more educated. What do you make of this argument?

Brian Kaplan (23:43)

It's very tempting. And again there's two senses of being driven by the government. If you just say it's driven by the government because the government's so heavily subsidized in education that I'm like, yes, the government is to blame. The government. Did it stop going and throwing money at this rat race about there. But you're talking about the story that the reason why education pays is just that there's a lot of government jobs and the government, not for signaling reasons but just for out of a sheer snobbery, requires these credentials. The reason that doesn't work just comes to, you know, it comes down to the arithmetic that the share of government employment is just not low enough to account for the enormous payoff for education. And really what I show is that while it's true that for most levels of the federal government, for almost every level of education, the federal government pays more than the private sector. Right. Except for the very advanced degrees because there's this pay compression. Government overpays but then compresses the, the earnings, the percentage gain you get from having more education is actually higher in the private sector. Again because government believes in high but compressed pay.

Caleb Zakrin (24:52)

So in a sense it's, you know, it's almost this, this, this general social phenomenon. It's, it's related to the private sector, it's related to the public sector. No matter what getting a degree, whether or not it's just signaling or mostly signaling, it pays. So you know, as an individual, if you were going and counseling someone, I think you have a line where if you hired, if you had a college counselor and they were advising your, you know, your children, you would want them to tell them to go to college because it would pay.

Brian Kaplan (25:19)

Yeah. As well. Again, assuming that my kids were doing well in high school. I mean that, that is a separate part of the book. But especially when you're getting into the self help is just realizing that while college pays well on average, it really does depend very much upon the student because people that were struggling in high school very rarely finish their degree and their, their college degree. In that case you are because of that sheep's going to affect we're talking about before you basically blow time and money and then barely get any increase in earnings. So then it's not, not such a good idea. The rule of thumb I have is basically like if you were doing very, you know, you know, if you were say like well we had so much great inflation, it's a little bit hard to say this anymore, but basically like if you're like a B plus student back in the old days anyway, maybe now you need to be like an A minus student, then college is probably going to work out for you. But otherwise I would actually definitely say think more about this because your completion odds are actually pretty poor.

Caleb Zakrin (26:18)

I think that depending on different types of students, obviously students will come into college with different expectations about what they're trying to do. I certainly, when I was thinking about college. I was not thinking at all about what the career that I wanted. I knew that what I wanted to do was read lots of books and think lots of thoughts. And many people, you know, I'm sure many listeners right now, they're probably like, you know, screaming, you know, at the, you know, at their phone or whatever the device they're listening on, saying. But the soft skills, the intangibles, the humanities, the teaching you how to think, the civic education. What about these arguments in favor of the humanities?

Brian Kaplan (26:57)

Yeah, so a couple of those we actually have good research on and we can just say, yeah, that's wrong. The one that I took the most serious in the book is this learning how to think or teaching critical thinking, that kind of thing. This is by the way. So economists generally are quite contemptuous of psychologists. I'm not. I love psychology and I love talking to psychologists. But when you start pointing out how useless most of what you're learning is, then suddenly a lot of economists become amateur psychologists, say, oh, well, you're learning how to think. Right? Well, guess what? Psychologists spent about 100 years studying this idea and doing experiments on it and otherwise trying to get to the bottom of it. And to their great dismay, psychologists found very little evidence that you can teach people how to think. If you want to go and read more about it, they call this transfer of learning. The main punchline is that if you're lucky, students learn exactly the material that you teach them and apply it in exactly the context in which it was taught. Hardly anyone does better than that. Few people do. But again, it's just so rare that it's barely even worth. Barely, you can barely even find it. Right. And again, the civic education, there's data on that and again, finding just a lot less than what most people would think. But the general humanities critique, which is one of the most popular of the book, I mean, here's my favorite answer to it. Look, I can understand reviewing a book without reading it. Everybody does that. But to review a book without reading the table of content seems pretty lazy. I do have a whole chapter on this humanities critique and it doesn't say what people assume. People often just think of me as a knuckle dragging Neanderthal economist. And actually I'm a total humanities person. I love German opera, I love Tolstoy. For me, this is really fun. But I also have enough self awareness to realize I'm not like most people. Most people do not find this fun. They find it boring and tedious and often just torture. So anyway, in that chapter, I just go over the actual evidence on how much elevation of the human spirit has education achieved. And the punchline is, even if you give the education system credit for all the Shakespeare consumption that occurs, it's hardly any, because there's almost no Shakespeare consumption. Right. And obviously that's pushing it.

Caleb Zakrin (29:16)

Yeah. I think also too, that there's a sense that people, when forced to do something that they don't want to do, like the fact that almost every high school student confronts Shakespeare at some point in time, that maybe the fact that they're forced to do it makes them less likely to actually appreciate it or enjoy it. And the students that would have wanted to appreciate Shakespeare anyhow would have encountered it regardless, because they would have sought it out.

Brian Kaplan (29:42)

Yeah, maybe. I tend to think that we get some very tiny Shakespeare boosts from teaching it because hardly anybody that isn't taught it would ever discover it on their own. And there's a few people that do like it. Yeah, most people don't like this stuff and like, well, why don't they write an essay discussing why they don't like it? Because a normal person doesn't write an essay discussing how they don't like high culture. They just try to get back to the baseball game or whatever.

Caleb Zakrin (30:09)

As far as then thinking about education and what are some solutions on a social, you know, on a broader societal level that we could try and advance. I think a lot of people, they might agree with a lot of the critiques that you've made. I certainly find myself agreeing with a lot of them, even if I don't. I have no regrets at all about studying the social sciences and the humanities. I think for me personally it was a great choice. Though for some other people, maybe it was a waste of time and money. Vast majority, the thought of, of, of, you know, pushing people towards less education is still frightening to me because of the fear that maybe there's something that we don't know. There's some unmeasured thing that we don't know. So what, what fear? You know, how do you, you quell people's fears when you basically say that, you know, we'd be better off or people a lot, you know, society better off if we didn't weren't pushing as many people to go to college?

Brian Kaplan (31:06)

I just start off by pointing out that most people don't go and do additional coursework after they have the degree. And you don't seem to be terrified that you might be missing something crucial then. Do we really think that this four year program that we have is the magic formula. And once you've got that, you're safe, but without it, you're in great danger. Like, I just don't think that makes much sense. You know, just think about the classes you missed, right? It's like people missed a bunch of classes. Like, oh, what if I missed the class that would have transformed my life? And it's like, all right, I guess that's possible, but it's just so phenomenally unlikely. I mean, I think about it a lot, like being asked to buy an extended warranty for a remote control at a store. And I always tell the same thing. I'll take my chances. This is like. It's just not like the. Like, we've got this known massive cost with these. The highly speculative benefits that people are talking about. And it's like, yeah, I'm not going to spend all this money just for what sounds like wishful thinking. The. I think a lot of the nervousness comes down from, you know, down to focusing a lot on the exceptional cases and forgetting the rule. My best friend at Princeton came from really poor family, and he totally benefited from the system that we have. But he is a very thoughtful person. He's like, yeah, well, like, I'm like 1 in 10,000 kids, so should we really go and spend all this money on the other 9999 so that I can get this benefit? And he's like a. A reasonable person who says, no, like, it's not a. Like, the world should not revolve around a 1 in 10,000 exception. It doesn't make sense. It's not a good basis for policy. Let's see, in terms of just general fear, I mean, the main thing I'd say is, look, you know, you can think there's something I'm saying while thinking that I'm overstating, and then you can just push in that direction. This, honestly, is a lot of what I'm trying to get people to say, let's reduce education spending by one penny. It's like, why is that so important, Brian? The answer is because so many people don't even want to say, let's cut the spending by a penny. Which I think just shows how religious support for education is. It's not based upon cost benefit analysis. It's based upon the idea this is sacred. This is the. This is the most wonderful thing. And if you cut spending on it by a penny, you are, in a sense, giving away the farm, saying, all right, fine, we're not going to think of this as sacred anymore. We can cut spending by a penny. It's like, yes, of course, I think once we cut spending by a penny and once people concede it, once there's a concession, this is not the alpha and omega, then we'll start cutting more. But you know, like if we could just hold the line, not increase spending any further or just let inflation gradually erode real spending and education, I think that would be a better than what we could, what I would reasonably hope for.

Caleb Zakrin (33:58)

So how do you think then about vocational training as opposed to, you know, cutting spending and just letting 18 year olds get their free reign of the, of the job market. Do we still need some sort of education? Whether or not it's, you know, this sort of the soft education that a four year degree emphasizes.

Brian Kaplan (34:21)

Right. So I do have a whole chapter on vocational education. I think it's really underrated. There's been a move away from it and overall I think that it's in terms of individual productivity, it looks very good. In terms of actual career benefits, I think most of the evidence comes down to it is going to be weaker students that want to do vocational education. But once you adjust for that fact, then it looks like it is giving them good value. That said, of course there's a lot of different kinds of vocational education and the idea that it'd be better if you just had 13 or 14 year old kids going and starting jobs or at least half the time they're actually just showing up at a workplace learning by doing. I think there's a lot to be said for that as well. So I mean, like a lot of our problem is that we want to postpone vocational education to adulthood. And that is a point where especially a lot of young males are just so sick of all the years they've had to go and sit still and be told what to do. They're not interested in it anymore. It would be a lot better to go and start giving them vocational options at a much younger age and also indirectly giving them a better peer group than they're likely to get if they're dropouts, which was one of the main, one of the main reasons, or. Well, let me this way. The Gates foundation did a massive study of high school dropouts and they amazingly discovered that the main reason students drop out is that they're bored.

Caleb Zakrin (35:43)

If you were to have it your way, there would be fewer college students. It wouldn't necessarily be that people aren't going and studying classes that, that aren't going to necessarily lead to a job Like, I'm wondering for you because, you know, you make this, this, this joke though there's obviously some truth to it that you're teaching people how to be economics professors. You know, when you tell your students that, hey, I know you want to go work at Goldman Sachs, but I'm not going to teach you anything that Goldman Sachs cares about or I'll take, teach you very few things that Goldman Sachs cares about. Instead, we're going to spend time going through data sets or talking about economic concepts that will never, they will never come up again. How do they react to this?

Brian Kaplan (36:20)

Yeah, I mean, so like, my students, honestly, like the undergraduates are pretty apathetic. The students that are, you know, and I'd say, like, look, I mean, apathy is endemic throughout higher education. The only schools where I see very little apathy are the University of Chicago and the University of Austin. Even at other top schools, students seem pretty apathetic about intellectual stuff. But what I'd say is the minority students that are intellectually engaged, they like the joke and that sort of gets them interested. By the way, I'm very gratified that you appreciate the humor of the book because I did, like, in my mind I try to amuse as I'm doing and I do, I've done stand up comedy. So I, you know, and you know, in my mind at least, I'm always trying to be at least really funny for an economics professor, if not, if nothing else. Yeah.

Caleb Zakrin (37:15)

I think humor is oftentimes missing in academics in general. I think that, that taking, taking topics too seriously, you know, I mean, of course there, there are some topics that we have to treat somewhat gravely because they are very serious. But in general, I think it's actually a great way because it can help us rethink things, especially hard problems. If you treat it with a little bit of humor, you can see it a little differently.

Brian Kaplan (37:39)

Right. Especially if the truth is ugly. Like comedians speak a lot of truths and like publicly that no one else talks about because they got people laughing. So they're getting them into the frame of mind where they're ready to go and listen to a controversial idea and give it a fair assessment.

Caleb Zakrin (37:56)

If you're giving advice to, you know, let's say that there's a, someone who's, you know, they're getting ready to attend college or they're going to be attending college next year and they're trying to figure out what they should study or what, how they should treat their classes. What advice would you give? Would you say that that they should just focus on the classes that are going to be, you know, like data science and things like that that might directly lead to a job. Or would you say that, look, you're already in the system, the sheepskin effect is real. You know, take some classes that are going to teach you some skills and then just take whatever's interesting to you and try really hard in it.

Brian Kaplan (38:32)

I would start just by saying, what's your career goal? Right? And often students say, well, my career goal is to get a degree in something like that. Getting a degree in something is not a career goal. And you know, if they say, I, I don't know, it's like, well, ballpark it, like, general idea of like what you might be interested in doing. And once you tell me that, then I can give you some better advice. Like if someone says they want to be a psychologist, like, okay, so you understand that it's almost impossible to get a job as a psychologist with just an undergraduate degree. You are committing yourself to at least also a master's. And then like, well, what's a master's? A lot of high school students don't even understand the steps of the system and how it is so sequential. So there's that. Generally if I've got a pretty smart person who just says, well, I just want to make money and you know, like, have a comfortable career and I don't know what else. And like, and like, are you like ready to go and like fully commit yourself to stem? Like, no, I don't want to like live like that. That's too tough. Then for all those people, I say, well, guess what? Be an econ major because it is the highest paid of all the easy majors. So that is my big pitch for econ, highest paid of all the easy majors, which is totally evidence based. It's like, we make almost as much money as engineers and we don't have vitamin D deficiency from being in the programming lab for four years straight. So that's where I go there, you know, if someone who had just been struggling in high school came to me, that's where I would say, look, do you want to just hear what everybody else, what you're supposed to hear, or do you want the truth? And that's right. The truth is, look, you probably shouldn't go, like, are you someone who is ready to just totally change your whole approach to life and ready to start working not just 10% harder, start working like 10 times harder than you were doing in high school? Like, be honest. If you're not ready for that if you're thinking about parties and drinking, then I just wouldn't go if you haven't been doing well in high school and find something else that you like and regret at, you know, or you just wait. So the parents might kill me, but it's like, look, I'm saving you for paying for two or three years for them to fail to flunk out. So, like, you need another plan. If the person has been doing well in school, that's where I would go. And if they otherwise lack direction but can do some math, I would tell them to do econ. Let's see, in terms of other advice, if there's a person who's very curious and passionate about learning, that's where I totally changed modes. And I say, all right, here's some good news. There is no school in the United States so humble that it does not have some brilliant people who love ideas and would be delighted to be. If you introduce yourself, you just have to hunt them down. You know, even in a community college, you might think, all these people, what's there, like, even community colleges, these are people, there's some people there who aren't just punching a clock or getting a paycheck. These are people who sacrificed a lot of money because they just couldn't bear to do anything other than work on their subject. And I tell people, find them, find them and tell them that you're interested in the subject. And they'll be so astounded and they may cry, they finally found you. They don't know it yet, but they need a friend and you're that possible friend. If you're going to some higher ranked place, what I say is go through the entire faculty roster and if there's a 5% chance that you think that you could get something out of talking to that professor, go and talk to them and find out. This is like five minutes of your time and maybe this person is going to change your life and you will get this fascinating experience and they will take you on intellectual journey, right? Of course, this device is only relevant for a couple percent of the population that would have the slightest interest in going on an intellectual journey. Because most people don't want to go on intellectual journeys. When I was in high school, this was just such a bitter truth for me to realize. My Dad's got a PhD in electrical engineering, super smart guy. And it's like, well, in that case, I could totally get him into German opera if I, you know, if he just would try it. He's smart, he'd like it like, no, wrong. It's just illusion. Someone could be super smart and yet have zero curiosity. And it was a hard, bitter truth to accept. But I've accepted it. It's just reality. Gotta live with it, right?

Caleb Zakrin (42:51)

I feel that is so much what the argument is oftentimes is that people that are into ideas or into history or into. Into all these things like German opera, where it might not. Unless you are, you know, the top opera singer, you're probably not making any money based on your passion for German

Brian Kaplan (43:09)

and even that enjoy it for consumption. Most people are like, people said to you, it's just like Germans barking. Why do I want to hear that? Like, no, it's so beautiful. If you only change, like, no, they will. They will never seem good to them.

Caleb Zakrin (43:23)

It's a hard truth to accept. And I certainly, you know, used to struggle with it a lot more. I feel like it was much harder in high school where I was, you know, into. I was a, you know, high school kid who was really into philosophy, and it was challenging to find peers who want to talk about philosophy.

Brian Kaplan (43:39)

You count yourself lucky, Kayla. Before the Internet, it was. It was, you know, you couldn't find anybody. You know, the Internet has been a godsend. Everyone with unusual curiosities.

Caleb Zakrin (43:50)

Yeah, it's, It's. It's certainly, certainly true in many ways. You know, one thing that I think has. Has really made a lot of people think about education and maybe even provided an opening for some real changes to the education system is the advent of AI in part because there are so many students now that are using AI to skirt coursework. Obviously, you know, you can't really use AI to cheat on a test if you're being observed, but you can use it to write an essay. You can use it to summarize a paper. You can use it for all sorts of things. So how does AI, you know, change the way that you think about some of the ideas that you wrote about in the book?

Brian Kaplan (44:28)

Right. So I got to write a piece for the Chronicle of Higher Education on this. It was called, you know, so 10% less stagnation. There's going to be a few improvements, but mostly AI just exposes the emptiness of what's been going on because the students never wanted to write the essays, the professors never wanted to read them. And now you've got some software that will write your essay and some software that will grade the essay, and you can just be cut out of the equation entirely, and hardly anyone actually misses it. That's what's you really do See, and, you know, this combined with COVID where attendance fell quite a bit and has still not rebounded to, you know, the same degree. Like, most people feel like they're seeing more apathy than before. It's like. Like, could it get more than it was before? Okay, I guess it could get a little bit worse because the apathy was already so high. But, yeah, it's just realizing that people do not want to go and get a thousand times as many English essays. Right. And look, look, if this were something that people valued in itself, if it were like a machine that can just mass produce housing for pennies, we would be living in palaces, and people would want those palaces. But the stuff that students are using AI for professors are great for stuff where it really reminds us, it's almost hard to miss that people never really wanted this stuff in the first place. It was always just jumping through hoops, and now it's just hard to avoid seeing the ugly truth.

Caleb Zakrin (45:56)

Yeah, it's tough for, I think, a lot of people to a certain extent, too. I also wonder if you have a class, if you're taking a class on political philosophy and it's actually just filled with the people there that want to talk about the content, then the class will probably be better for that. I remember having this experience of being in class and there'd be 20 people in the class, and then you slowly realize that only five people actually care about the material. And 15 people are either completely zillion.

Brian Kaplan (46:26)

We're five out of 20. Care. That's great.

Caleb Zakrin (46:30)

Yeah, it's. It is a good. A pretty good ratio, all things considered.

Brian Kaplan (46:34)

Yeah. As a professor, the main thing you realize, look, this could all be, you know, in a functional world, this would all be demonetized. It would just be like a book club. Right. And, you know, the few. The people that really want to be there are there. And, like, why is it that people get these dream jobs for life just to go and supervise a book club? And yet that's so much of what's been going on for hundreds of years, right?

Caleb Zakrin (46:59)

Yeah. In many ways, I. I do. It is. It is true that the, you know, becoming a professor, being a professor is a. Is a dream job for many because, you know, you get to intellectually explore. Obviously, not everyone wants to be a professor, and it's very competitive to become a professor.

Brian Kaplan (47:16)

And of course, there's a lot of professors who aren't that curious, which is what really astounds me. It's like, even you're just punching a clock. Like, why Are you here. You don't love this stuff, like economists, definitely. Like, I am very eccentric into saying. I just love this subject. It's so fascinating. Explain so much. And like, a lot of professors, like, well, I just work on my one topic here. I mean, I just work on the term structure of interest rates. And it's like, oh, but economics is so much more. It's like, I don't know about that. You know, like. Like these, these people, like, why did you even come into the field? Like, if not for the joy of the intellectual exploration? And yet, you know, this, you know, I think, you know, like, I'm the weird one. They're the normal ones. I've just got to accept that the

Caleb Zakrin (48:02)

purpose of education or how people think about education has changed quite a bit. Obviously, you know, there is that the. The model teaching you how to think to help you find a job, very concretely, like, teaching you how to acquire certain skills for a job. And then a more broader idea that, like, you know, education is. Is something that, you know, it's deeply tied to, like, moral development, it's tied to civic development, it's tied to these sorts of things. You know, to a certain extent, people might argue that, like, that's what the role of parents is for, are for. Of course, some people, not everyone is fortunate to have parents that, that care about, you know, a child's development in that way. So, you know, how do you think about education in that. In that sort of term, in terms of, you know, helping people, you know, really become good, upstanding citizens?

Brian Kaplan (48:50)

Right. Well, there's looking at education as we know it, and there we can at least try the most basic things. Of what evidence do we even have that more educated people are more moral people? Right? So you can start there. And then it's like, okay, well, what do we mean by morality anyway? And all right. But yeah, so, like, in the book, I just go over a lot of different measures of this kind, and it comes down to, like, education. We just know it is grossly oversold. Could education be radically different and then do everything that we hope for? We can imagine it. I think that, you know, with. For most people, it's just hopeless and they're just not curious, they're not interested. They don't want to be changed or reformed or improved. And it's basically just a bunch of lies that professors tell ourselves. If you actually have a highly motivated student who really wants to go and learn, we've got to teach. It's a different story. But that rarely happens.

Caleb Zakrin (49:49)

So when you look at the field of the economics of education and the research that's being done, oftentimes the studies that you look at, some of them are extremely robust, but some of them you kind of have to just infer because not all the evidence is there. You know, what current research do you see that people are working on or would you like to see people to do to really help us make better decisions or make better policy choices when it comes to improving education?

Brian Kaplan (50:18)

Yes. I mean, call me a megalomaniac, but yeah, if my book's right, then most of what people are doing is a waste of time and they need to just start over. It's like what economics of education should be doing is rethinking everything through the angle of the signaling model. Model. I'm only one man, I can't do it all. But, you know, like, reinterpreting everything, like everything that we've got and saying, okay, this is how it would make sense from a signaling perspective, which is the better perspective. And then next step is, what can we do here? I'd like to see just a ton of research on what's the best kind of educational austerity? What's the best way to cut education spending? Right? And let me tell you, that is not a question that people are asking because we need to be spending more, not less. It's like, well, that is a political philosophy that you have. It's not science. And I've got a different perspective which tells us that this, that the alternate, alternate way is just like a much better guide to what we should be doing. So when, for example, I think a lot of educational austerity can be achieved just by raising standards. Right? Just saying, look, whatever we're teaching, you actually must master the material by the end or you don't get to go on. Right? So Harvard's credential inflation has been in the news recently, Right. And their credential inflation is truly out of control. Right. So, yeah, if you were to say, look, you can't go on in history unless you have a mastery of the subject. You've got to know this forwards and backwards or else you just don't belong here. You know, closely related would be going back to extremely challenging standardized tests just as preconditions for. Go for, for starting back in the 80s, it was, it was basically in the. The number of students in the entire country that got perfect scores was in the double digits. So I think it was like 10, 20 per year. The test was so hard. And now I think that we could actually fill the entire Ivy League with perfect scores from the SAT because the test has just gotten so dumbed down and easy. Right. So I think it would be better just to raise standards and then just bail people out and say you can't go on. Right. So you know, and this includes things like music. So it's like, look, if we're going to go and have music classes, which I think is mostly a waste of time, but if we're going to do it, you actually have to be good. You have to be good if we're going to do foreign language, like you have to be fluent at the end of a four year program or you don't get the credits right. It's like, well, but by that standard hardly anyone would do it. Well and that, yeah, that's kind of the part of the agenda is to stop wasting resources if we can't actually get high levels of competence by the end.

Caleb Zakrin (52:54)

Yeah, the great inflation turns into this, this problem in a way where it becomes, you know, challenging to, to differentiate between, you know, an A minus and a B plus.

Brian Kaplan (53:07)

And I mean a lot of it honestly, as you differentiate by major and especially the fact that STEM stands almost alone in terms of holding the line against gradual inflation. They've had a good amount, but a lot less than other fields. And it just comes down to math professors have a lot of integrity and they're not going to give you an A if you can't differentiate a basic function. It doesn't matter what else is going on in the world. Their conscience precludes them from going and giving A's to people that don't know the math. So. And, yeah, and, and it's like, wait, does that mean that humanities professors, the very ones who are supposed to be our conscience, don't have that kind of integrity? Yes, Caleb, it does mean that they lack integrity because like people have this idea, well like there's, it's just inherently subjective. There's no real standards like any you who's to say what's a good essay in English? Like I can tell you what a good essay in English is and most of them are bad. And I mean again, one of the other last places has been holding line pretty well are the advanced placement tests. Although they've been easing up a bit too. But you know, like, like you go and look at what's expected to get a 5 on the AP History exams and it's like that those are good tests. They really expect you to know your stuff and you can't get a 5 without being actually highly knowledgeable about the subject. So. I mean. Yeah, by the way. So my preferred system or college mission is not just doing the sat. Actually. I would just say, look, we just have a cutoff based upon number of fives you have on the APs. And it's like Harvard, you need to have 12 fives. It's like WI fi specifically because a very good student can wing A4. But you've got to know your stuff to get a five. And then maybe give like three, you know, count ap, count BC as three tests thing, you know, a few other tweaks. But just to sum the fives, I think would be a great way of saying we are letting in highly knowledgeable students who are ready to go and take it up to the next level. And then, yeah, of course, for mediocre schools, you even 15 would be too much. But then you could go down to fours. But I think that would be the best. Just, you know, the sag. While it is in some ways a good test, the material is kind of boring and pointless. And so it'd be better if you were actually proving your. Proving your merit with mastering valuable bodies or knowledge.

Caleb Zakrin (55:21)

Yeah, that isn't to. To a certain extent, that is, you know, my always. My biggest issue with the SAT is I just found the material so completely boring, though, I suppose, you know, to dedicate yourself to. To study for it on certain level. You know, it shows. It shows, you know, diligence and other things. So.

Brian Kaplan (55:39)

Yeah, it's just way too easy. There's way. There's way too many people with perfect scores.

Caleb Zakrin (55:44)

Yeah, it does feel to a certain extent, it's like I, you know, I've plenty of friends that are lawyers that when they were. When they're in undergrad, they knew they wanted to be lawyers and they knew that law schools didn't, you know, they. They cared so much about the gpa. Obviously the LSAT matters a lot as well, but, you know, they would just intentionally take the easier courses because they knew that if they could get a higher GPA, then, you know, the 3. A 3.9 versus a 3.8 could be the difference between, you know, Harvard Law or, you know, Podunk law.

Brian Kaplan (56:15)

Yes. And. Yeah. And those law professors probably not doing a proper adjustment for field of study.

Caleb Zakrin (56:20)

Oh, definitely not law. Yeah. I find this book just, you know, so thought provoking. And I think it's. I think it's an important book for anyone who works in education or cares about education, basically. Anyone. Because, you know, everyone encounters education in some shape or form another. To read, just to think about it. You know, I don't know if you'll convince everyone in part because I think that these, that certain ideas about education are so finely ingrained. It's such a, it's such a faith. And in some ways, you know, I can't say that my even, even my faith is, is fully shaken. But, you know, I, I think that I, I think that you make really powerful arguments and really anyone should, should, should read this to, to investigate.

Brian Kaplan (57:01)

Let me put it this way, Caleb. A few times I've gotten to present this book to a total, to a pretty normal American audience, and normally people are nodding their heads in almost complete agreement until I get to the part where I say, let's cut education spending by a penny. That is really where they draw the line in terms of, as a description of what's really going on. People are generally very on board. They just can't bear to say they're going to spend less money. The only group that really firmly objects to the content are basically labor and education economists because they do realize that if they accept the foundation of the book, they're going to be led to a totally deviant worldview, and it's really threatening to them. Honestly, it's like, well, isn't that unfair? It's like, I think it's very fair. Labor and education economists, they know the model. And then when I start presenting the evidence, there's just so much effort to say, okay, well, that evidence doesn't count. That's just psychology. That evidence doesn't count. That's from sociology. That evidence, that's, you know, that evidence. You know, that technique was good enough 20 years ago, but it's, you can't get published for that anymore. It's like, look, stop trying to preserve your dogmas. Like, the evidence is overwhelming and you have tons of firsthand experience, and firsthand experience is relevant and you know it. So you honestly bend the knee, yield before Zodiac?

Caleb Zakrin (58:27)

Yeah, I do think that it is the case where, like most things, the second you talk about cutting even a penny, then people start to lose their minds. This seems to be the story in Congress. How are we going to pay for things? Well, how are we going to cut things? It's even scarier. It's a really fun book to read, and like I said, it is humorous. And I also appreciate too, you really don't have to be an economist at all or have any knowledge of economics to read this book because you really clearly just walk through each line of argumentation bit by bit, each argument that someone might raise against the points, and it's just jam packed with evidence. And yeah. Brian, it was really just so wonderful to get the chance to speak with you about this book. It was really fun to talk with you about it as well. And thank you for being a guest on the Truth about the.

Brian Kaplan (59:20)

All right, my great pleasure, Caleb. Talk to you later, man.