All of us here have one thing in common: we all chose to further our education. Why are we here though? This question might get many different answers from everyone here but they would all probably sound pretty similar. Most of us want a better job, something that requires a higher education level to achieve. Whether we want it for the greater challenges and responsibilities or we want it for the amount of zeros at the end of our checks, we all want it for something.
In my Econ 101 class we just learned about the different wages paid to workers for different reasons. I found it very interesting to see different theories on why those that go to college are paid the bigger bucks. In our textbook Principles of Economics, the first theory we learned about the efficiency wage theory. This states that companies may pay higher wages to their workers to increase productivity. The companies see that those who went to colleges and got further education past high school are already more productive than those who do not have the same type of knowledge.
This relates back to one of Louis Menand’s theory about higher education. Two of his theories are about gaining knowledge and the skills to do a job. Because of the knowledge that they gain in their schooling they have access to better paying jobs because they are more productive in their areas of knowledge. He believes that higher education is needed to advance oneself through the ranks and give them the knowledge and well-rounded skills they need to be able to succeed in life and at their position.
Another theory that we discussed in class for why the educated are paid higher wages is the signaling theory. Employers use the signaling theory to separate the applicants by who they believe will have higher abilities and be able to perform better and those that have lower abilities who may not perform as well. Employers figure that those who have gone out and tried to obtain a college degree are usually the ones that posses the higher skill set. This also ties in closely with Louis Menand’s first theory about education. He theorizes that college sorts people into groups of “winners” and “failures.” Those that are winners will be able to go on into the world and get the more advanced, higher paying careers.
Menand focused on the thought process of why students go to college while in Econ we were able to look at and analyze society’s view on college and why graduates are worth more money. Looking at the two theories that focus on the social and economic stand points of college allow for a better understanding of why there is such a strong pull for students to go to college. Whether it is for specific skills, learning that you are the best, or getting an extensive liberal arts knowledge base, there are a variety of reasons that one might want to go to college and why companies are willing to pay graduates more.