Credentials as Signals

When it comes to higher education, the most common signals have been grades and degrees. But what happens when those signals fail to provide enough information? It’s as if the traffic light only has red and green or a car only has a left turn signal. You see the point. So then, how do institutions and students fill this information gap when transcripts don’t tell enough of their story? What are effective signals of knowledge and skill attainment if not the transcript? How will an employer know what the student can do?

Signaling in the Job Market

The idea of signaling in the job market is not new. Spence’s 1973 work in economics theory is a sophisticated way of saying what seems like common sense: potential employees send signals to potential employers, and there are values attributed to those signals, particularly when it comes to education and skills attainment (Spence, 1973).

For students, employers, and higher education, the signals have become less clear and hold less meaning. The conversation has now shifted. These are the questions being asked of higher education:

Students ask:

How can you help me get a job or career and how are these courses relevant to my career?

Parents ask:

Can you get my kid out of my basement and into a job?

Public asks:

What exactly is it you people are doing over there at the university? Show me the value of our investment.

Politicians ask:

Why should we give you money to teach kids these irrelevant things?

Employers ask:

Why aren’t you teaching skills that will help me and my business succeed?