For potential employers, degrees act as signals: they serve as a shorthand that allows employers to rank initial applicants for a job. Having completed high school signals a certain, modest level of intellectual competence as well as personality traits such as persistence. Finishing college is a signal of a somewhat higher level of each of these. In a society where a small minority successfully completes college, having a B.A. signals a certain measure of superiority. But the higher the percentage of people with a B.A., the lower its value as a sorting device. What happens instead is that jobs that once required only a high school diploma now require a B.A. That is not because the jobs have become more cognitively demanding or require a higher level of skill, but because employers can afford to choose from among the many applicants who hold a B.A., while excluding the rest. The result is both to depress the wages of those who lack a college degree, and to place many college graduates in jobs that don’t actually make use of the substance of their college education.
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