TURNING JAPANESE?

Years ago, I read some stories about how the Japanese college party scene made U.S. collegians look like overachievers. The stories antedate the World Wide Web, and I didn't want to scroll through pages of x-rated links to find some obscure article someone archived. The gist of those stories was that students who qualified for admission to Japan's best universities had worked hard from pre-school to high school, and admission validated their potential for the best jobs at the leading zaibatsu. College, then, is a three- or four-year rumspringa.

Something similar might be at work in the United States.

In a recent article, Bentley MacLeod and Miguel Urquiola considered the impact of selective admissions on the value added by teaching (the accumulation of skills) and on labor market signals. They came to the conclusion that more selective admissions increases the value of the labor market signal, but it may also have negative effects on traditional teaching value added.
First, they argue, higher selectivity dilutes the “schools’ incentive to enhance productivity, since a low value added school can always enhance its reputation by being more selective.” The schools have less incentive to compete on the basis of teaching value added, since it is easier to compete on the basis of a labor market signal; that is, given the choice of improving their reputation by producing more teaching value added or improving their labor market signal, it is easier to improve the signal. Adding value to your existing students is hard work and less likely to be recognized than simply getting better students.
The second adverse effect on teaching value added is the impact on the student’s incentive to work hard. MacLeod and Urquiola find that when the student’s native ability is known to the labor market “effort cannot affect the market’s perception of one’s ability, reducing effort incentives.”
In other words, once a student has won the selective admissions tournament, he can add little to the value of that signal by working hard in college. Some students may think, “I’ve made it into Harvard, so why work to my maximum? I can coast and still get the valued Harvard degree.” If the student works less, there is less value added by his time in college.
MacLeod and Urquiola find other results stemming from selective admissions including “stratification by parental income” and “increased transmission of income inequality.” That is, wealthy families tend to have smart children, whom they manage to get into highly selective schools. The authors contend that this has a negative impact on economic mobility, which is a cornerstone of our society.
So parents’ eagerness for their children to compete for admission to elite institutions may be misplaced. A stable, high-quality student base at an elite institution does not necessarily mean the institution is adding a lot of value through its teaching. It may only mean that the parents of those high quality students are purchasing an expensive labor market signal.
Additionally, the existence of the labor market signal means that a student at this elite college has less incentive to excel than if he or she were at a less selective college. If bright students just coast through with less exertion, parents may actually do them a disservice by purchasing expensive labor market signals.

In particular, the less expensive labor market signals might be just as good.

Zac Bissonnette, a senior at the University of Massachusetts-Amherst, recently published a book, “Debt-Free U,” that argues convincingly that nearly every state university can provide as deep an academic and extracurricular experience as Harvard if students seek out the best professors and activities and apply their energies there. Most undergraduates don’t do that, whether at a famous school or not.
What about those great Ivy alumni contacts? The truth is every college has influential alums, if you bother to call them. The Zuckerberg character in “The Social Contract,” who may or may not be like the real Facebook founder, becomes a billionaire not because he went to Harvard, but because he was a computer genius, a talent he developed before he got to college.
Zuckerberg seems to have figured out that Harvard wasn’t going to do much for him. He dropped out, like his fellow billionaire Bill Gates, and neither of them has reenrolled. This year’s crop of applicants will discover if they embrace all their college has to offer, no matter where it ranks on the U.S. News list, they will get far more out of it than they ever expected.

Those applicants might discover, however, that unlike at Harvard, they'll have to sit for final exams.

At about the same time the press discovered the hidden side of Japan, Inc., the country's prime minister lost himself some face with a suggestion that the United States's heterogeneous work force hampered its industry. Some observers called the prime minister ethnocentric; that might have been the case, or perhaps he was reflecting on the difficulty of instilling the habits of industry in people who had not grown up in that tradition, something not the case for the Japanese, college party scene notwithstanding. He might have had something there: the propensity of the education establishment at all levels to enable failure contributing to the social stratification. It's not so much that the rich parents produce smarter students (that assortative mating might be producing more high-functioning sociopaths) as that the rich parents bring up their kids in the habits of industry.