Economic theory posits that education is more than simply increasing productivity (through knowledge/skill gains) – it is also about signalling and screening. A highly selective admission/graduation process, or the act of self-selection in opting for a competitive school, sends signals to others with asymmetric information (ie employers) about the candidate’s value. This helps them screen candidates and reduce the decision space. The perennial question about elite schools is how much of the candidate’s value is through the education or innate (ie selected) – an NBER paper ‘Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables’ finds:
We find that students who attended more selective colleges do not earn more than other students who were accepted and rejected by comparable schools but attended less selective colleges. However, the average tuition charged by the school is significantly related to the students’ subsequent earnings. Indeed, we find a substantial internal rate of return from attending a more costly college. Lastly, the payoff to attending an elite college appears to be greater for students from more disadvantaged family backgrounds.
Swarthmore Associate Professor of History Tim Burke writes:
For another, the more highly selective a college or university is in its admission policies, the more useful it is for an employer as a device for identifying potentially valuable employees, even if the employer doesn’t know or care what happened to the potential employee while he or she was a student. If so, this has bad implications for expensive noncompetitive lower-tier private colleges, possibly, but since they’ve long since been the most economically tenuous part of the higher education sector, that’s not news.
What does this mean for ACS, which has recently set up its ‘international’ school, Anglo-Chinese School (International)? As a new institution, the quality of the education is yet to be determined, though we will soon be able to make projections on this. However, where screening and signalling is concerned.. Anecdotal evidence (from friends who have been involved with the school recently) suggests that admissions is not academically rigorous. The primary screening mechanism is the tuition fee, which is high relative to heavily subsidized public school fees, but more or less comparable with the private schools. This means that the primary signal about their students is one of privilege. That might be important for clients who want their children to associate with the ‘right sort of people’ (whatever that means) but it seems like the wrong brand strategy to me, if clients are interested in say, increasing productivity or getting into a competitive university.
What worries me more is that, in this niche of the education industry, price is being taken as an indicator of value – a giffen good – which tends to create a vicious cycle of increasing prices and perceived value, which is almost always artificial. Perhaps the heavy subsidies on public school tuition have distorted the market and my perceptions of what a fair price is for a privately run, highly efficient education provider (ACS Independent, maybe?), but I can’t help but see the price tags as some sort of educational arms race in a prisoner’s dilemma for schools.
The answer for ACS (International) is to adjust its entrance signal from mere privilege to include academic rigor and potential – but that is what ACS (Independent) already does and would be redundant/inefficient. If we believe that privilege is precisely what the ‘international’ school seeks to signal, then I wonder how this fits in the overall strategy for ACS as a whole.
