“Education is the great equalizer,” or so the story goes.
Discussions by pundits and politicians about opportunity and helping individuals unleash new opportunity for themselves and their families almost always devolve into points about school funding or extending the unbelievably long swath of time that school dominates our lives either through extending Pre-K or subsidizing higher education.
The idea generally goes like this:
- People want new opportunities.
- People who have accessed “new opportunities” in the past have traditionally had higher levels of education. (The definition of “new opportunities” is usually left up to whichever talking head or politician is speaking at the time.)
- Therefore, education must be extended to the people who want the new opportunities, either through expanded Pre-K or subsidizing higher education.
Somewhere along the line somebody may pull out a reference to an obscure, bleak European social democracy that has universal pre-K or universal higher education as a way to justify their belief that expanding higher education or pre-K education leads to higher levels of happiness or prosperity (never asking which came first — higher levels of education are always a product of a wealthier society, not the other way around. Only already-wealthy societies can afford to subsidize people studying Underwater Basket Weaving).
Without getting too political, there’s a really big flaw in this reasoning. That flaw comes from the assumption that more school is the path to more opportunities. That assumption may come from a few places.
First, people may look at other countries where people have opportunities and confound the fact that they also have more school. Having more school is a product of having more opportunities, not the other way around.
Second, people may look at degree inflation and assume that because more and more jobs require degrees, decreeing more people is the way to give more people access to more jobs. This misses the fact that more jobs require degrees because the degree as a signal is so weak because too many people have degrees. Adding a larger pool of people with degrees to the overall pool won’t open up more opportunities in the long run — it will just lead employers to require more credentials to gain access to jobs that otherwise wouldn’t require them.
Third, and more fundamentally, people confound education with schooling. Education is not schooling and school is oftentimes contrary to education. Most people do not learn best through subject-learning in a passive environment where they are fed facts and tested on those facts. Most people learn best through trial-and-error, experimentation, and true interdisciplinary work in the field. School has long-established its monopoly on education, so much so to the point that people who choose not to send their children to schools are expected to “homeschool,” not to “home educate.”
I want to go a step further and argue that school not only is not the path to new opportunities for most people but that it also decreases opportunities over time.
The perception is that not having school leads to a loss in opportunities. At a certain point, usually the point of a credential, you gain positive opportunities that you wouldn’t have otherwise had without your education (Z).
You’ve heard the stories about how school saved children from broken communities and gave them opportunities they wouldn’t have had (the problem is that this plays with counterfactuals — what would those children have done if school wasn’t crowding out other options in the community?). You see ads for colleges with some stay-at-home mom who went back to school and got her BA in Criminal Justice and now works for a government bureaucracy and how this unlocked “opportunity” for her. The examples are shoved in our faces every day by advertising and pundits.
This may be true in some fringe cases — usually cases where people really did not have any other outs besides going to school. But this is the case in a much smaller overall population than people think.
Instead, school actually limits our opportunities through a number of psychological and institutional barriers.
The reality is that at a certain point (Z), more schooling leads to a limitation of opportunities that one wouldn’t have otherwise had.
For charity’s sake, we’ll ignore the time and monetary costs of schooling (imagine a fairy waved a wand and higher education was suddenly free for everybody and only took a day) and only focus on the effects it has on the individuals through the process itself.
There are a few forces at play as people extend their schooling further and further into their adult lives. Overcredentialing is a hiring bias that keeps them from being able to transfer their credential to fields that traditionally don’t require it. Path dependency is a cognitive bias that keeps people in roles and on paths they wouldn’t otherwise be on (and don’t want to be on!) if it weren’t for their schooling. Credential-Identity dependence is a cognitive bias that makes it difficult for people to think of themselves as anything besides their credential. Finally, market-skill blindness is a schooling bias that keeps people from learning the skills they actually need to be successful.
Each of these works in tandem to actually limit the optionality of people at higher levels of credentialing.
Overcredentialing
Overcredentialing is a hiring bias that employers, partners, and investors fall into when using their own cognitive shortcuts to think about people. A gentleman with a JD is going to have a harder time getting hired by a marketing firm than somebody without a JD (or maybe even somebody without a BA!). They’ll take a look at the resume and tell him he’s “overqualified” for the job if he’s lucky. If he’s not so lucky, they’ll take a look at the JD and wonder what the heck is wrong with him and why he’s going into marketing after blowing three years or more of his life in law school. Did he not make the cut? Why is his judgement so far off? We wouldn’t want to hire somebody with such poor judgement!
This can be carried over to the PhD, the MFA, the MBA, or even (and more often) the BA. I have had businesses I work with reject candidates for having an MA in some unrelated field even though the individual who got the MA thought it would “open up doors.”
The credential begins to work as negative signal outside of a very small niche set of fields. For the lawyer above, he did have new options unlocked when receiving his JD at point Z on the chart, but those doors opened at the expense of many more doors closing.
Young people who immediately jump into college or graduate school without actually figuring out what they want to do with their lives are particularly prone to being hurt by this bias. You graduate college, don’t know what you want to do, find it pretty difficult to get a job, so you figure you might as well as go to grad school because that “will open up doors.” Except it doesn’t outside of your very small subset of doors that require that specific credential.
Path Dependency
Path dependency is another particularly tricky bias and one that can limit optionality at the BA level. I saw path dependency firsthand when I was at Penn. I would meet smart, ambitious, hard working people who wanted to be scientists, artists, and entrepreneurs. By the end of their sophomore years, they were stuck in fierce competition with other smart people to work in finance and consulting.
Did they really want to work in finance and consulting? Rarely. Usually, they found themselves pressured (mostly by themselves and by friends) to do something that isn’t “a waste of an Ivy League degree.” You could become a scientist with a degree from Penn State or even your local teaching college, but not working on Wall Street!
A lot of them would tell themselves they’d put in a few years there and switch out to what they want to do later, except it isn’t that easy. Path dependency doesn’t end at college. It extends into careers. You’re a Junior Vice President at an investment bank now. Few people get this opportunity, why would you blow it? Sure, you don’t like being there, but anything else would be a waste of the opportunity you have in front of yourself!
Path dependency is, if it isn’t clear by now, a personal psychological bias that affects us when we are exposed to opportunities and options we don’t really like but that are unique to the situations we are in. You don’t want to go into finance, but that’s what an Ivy League degree is best used for. You don’t want to be a lawyer, but that’s what a JD is best used for.
Fighting against path dependency is really hard. It’s both a personal bias and a cultural bias. Cultural biases are things that no one person designs but we all reinforce through our actions, norms, and mores.
When combined with the sunk cost fallacy — “sure, I hate being at Penn, but I already put in all this time and money!” — path dependency can lead to people spending a lot more time and money in situations in which they don’t want to be. Doors open at the expense of other ones closing, just like with overcredentialing.
Credential-Identity Dependence
Credential-Identity dependence is a little different and is more oriented around how the individual views themselves. When you meet a college student, usually the first thing you’ll ask them is what they are studying. There’s no inherent harm in this. Figuring out what somebody chose to major is a quick heuristic for what that person’s interests and goals are. In the long term, though, individuals come to view themselves as extensions of their majors or their credentials.
I’ve met plenty of young people who, despite having an interest in sales or marketing, don’t feel like they can get into those fields because they didn’t major in business. This always boggles my mind (despite the fact that I should be used to it by now). Ignoring the fact that a business major rarely prepares you to “do business” outside of a large corporate setting, these young people have begun to identify their options and their choices with a past choice of their own, not realizing that they can learn the skills for whatever trade or field they are interested in on their own.
The fortunate thing about this bias is that it only takes a strong personal will to overcome. Sure, you majored in Basket Weaving Studies, but you got a great internship, worked your way through some starting roles at a startup, and launched a number of projects that show your sales and marketing finesse. You’ll have to put in more work than somebody who views themselves as already having the confidence to go into different fields, but once you get that confidence, you’ll be able to operate outside of your domain easily.
Market-Skill Blindness
Market-skill blindness is the most dangerous, from a human capital standpoint, bias from additional schooling. Peter Thiel rips into it in Zero to One, noting that top students try to lead a life that’s so diversified and well-rounded that when they get into the real world they end up being prepared for nothing in particular.
Market-skill blindness results from a misalignment of the incentives in higher education compared to what is actually rewarded and needed for success in the marketplace. The skills that lead to being a successful student are rarely those that lead to being successful at a company or an organization outside of education (not to mention those skills just needed to be successful, period).
An easy example is writing. Academicized writing is notoriously terrible (look up the Sokal affair to see an example at self-parody). Some fields are worse than others (anything with “studies” in the name is sure to be terrible), but the incentives at play are not to write papers that will be understood and circulated by those who are curious about your writing. Instead, it’s to write in a very specific style and to mimic those successful academics in your field. This leads to a circle of bad writing. Students, looking to get high marks on papers, imitate what their professors look for and end up becoming worse writers as a result.
The worst part of this bias is that it leads people to think they have skills when in fact they do not. If a recent grad tells you they have great writing skills, demand to see samples because they are likely tricking themselves and you.
This doesn’t even begin to scratch the surface in other fields. A computer science major at a leading university may learn R or java or python, but they won’t learn Objective C, no matter how good the program is.
Finance majors won’t learn the needed skills for derivative trading or the sales skills necessary to get themselves hired. They won’t learn the creative skills that will help them formulate new and profitable trading strategies.
It gets harder to learn new skills as we get older. It gets particularly harder if these skills are contrary to the ones that we picked up through school. Unlearning the bad habits of school and the needless, academic-only skills that come with it is one half of the equation to actually unlocking new opportunities.
If we ignored the problems of path dependency and overcredentialing, it would still be very difficult for somebody with an MFA or a PhD to enter into a field unrelated to the one they studied. The bad habits and skills they picked up in graduate school — where they were conducive for survival in their trade — would make them sub-par candidates outside of their fields. (In fact, it was seeing my writing becoming academicizied that partially convinced me I didn’t want to pursue graduate school. I appreciate good writing and I hated to see my own deteriorate.)
Optionality Requires Specificity
The Catch-22 about optionality is that when you are trying to set yourself up for optimal optionality, you have to have specificity in your aims. This doesn’t mean that getting a PhD in Basket Weaving Studies will lead to greater optionality, but it does mean something like the inverse. Knowing why you are furthering schooling is key to optionality. If you don’t have a good reason to continue schooling (at the K-12 or higher education levels), then you probably shouldn’t be spending your time on it — you’ll end up closing more doors than you open.
For some people — like myself — greater optionality is achieved through ceasing to pursue a credential. I would have opened some doors at the conclusion of my credential, but I also would have closed some. Putting my skin in the game — allowing myself to get burnt if I am wrong — actually increased my optionality, allowing myself to benefit from changes in my environment and work and gain the skills I need more quicker and more efficiently than if I had taken an unclear, indefinite path.
Ultimately, optionality is about choosing which doors to open and which doors to close. In a world of trade-offs, sometimes the best way to achieve optionality is by choosing not to open some doors.