High School, Human Capital, Signaling and College Admissions

Dur­ing high school, stu­dents learn skills that will help them in their fu­ture ca­reers. This can be referred to as build­ing hu­man cap­i­tal. They also build up a record of grades, stan­dard­ized test scores, and ex­tracur­ricu­lar ac­tivi­ties that col­leges use to as­sess whether to ad­mit them. This can be referred to as sig­nal­ing qual­ity to col­leges.

High school­ers en­gage in valuable ac­tivi­ties that fall out­side of these two cat­e­gories, such as per­son­ally en­joy­able ac­tivi­ties and helping oth­ers. This ar­ti­cle fo­cuses on build­ing hu­man cap­i­tal and sig­nal­ing qual­ity to col­leges, for the sake of sim­plic­ity, rather than be­cause I think that these are the only two things that mat­ter.

In an ideal world, build­ing hu­man cap­i­tal would be perfectly al­igned with sig­nal­ing qual­ity to col­leges. In the real world, this is not the case. Con­sider the fol­low­ing story:

Kevin is an am­bi­tious high school stu­dent who as­pires to be­come a molec­u­lar biol­o­gist.

Kevin at­tends a com­pet­i­tive high school, where a stu­dent is awarded an ex­tra GPA point for each hon­ors or AP course that he or she takes. The max­i­mum num­ber of grade points that a stu­dent can get tak­ing a “reg­u­lar” course is 4.0 and the max­i­mum num­ber of grade points that a stu­dent can get for tak­ing an hon­ors or AP course is 5.0 A stu­dent who gets all A’s and takes at least one hon­ors or AP course gets a GPA that’s greater than 4.0 so that tak­ing a “reg­u­lar” course re­duces his or her GPA. GPA de­ter­mines class rank, so tak­ing a “reg­u­lar” course low­ers such a stu­dent’s class rank.

Kevin’s school offers a molec­u­lar biol­ogy elec­tive dur­ing sec­ond semester, which is not an hon­ors or AP course. Kevin would like to take the elec­tive dur­ing the sec­ond semester of his ju­nior year, in ad­di­tion to his other course­work, but he knows that do­ing so would lower his GPA, so he de­cides not to. Kevin ends up with a class rank in the top 1%, con­trast­ing with a class rank in the top 5% if he had taken the molec­u­lar biol­ogy course. Be­cause he’s in the top 1%, he’s ac­cepted at Har­vard, Yale, Prince­ton, Stan­ford and MIT, and this would not have hap­pened had he only been in the top 5%.

Kevin chooses to at­tend Stan­ford. The sum­mer af­ter his fresh­man year there, he works as a molec­u­lar biol­ogy re­search in­tern, and performs worse than he would have if he had taken molec­u­lar biol­ogy in high school.

This story shows how there can be a ten­sion be­tween build­ing hu­man cap­i­tal and sig­nal­ing qual­ity to col­leges. Kevin’s choice en­abled him to get into a bet­ter col­lege than he would oth­er­wise have been able to get into, but it came at the cost of low­er­ing the qual­ity of his fu­ture work.

Im­perfect mea­sure­ment and per­verse incentives

In Kevin’s story, the class rank­ing sys­tem was poorly de­signed: it re­warded some stu­dents for achiev­ing less rather than for achiev­ing more. The col­leges that Kevin ap­plied to were rely­ing on a faulty mea­sure of qual­ity.

All mea­sures of qual­ity are im­perfect to vary­ing de­grees. Be­cause they’re im­perfect, they some­times as­sign some­body higher qual­ity for mak­ing a choice that ac­tu­ally low­ers his or her qual­ity rel­a­tive to what it oth­er­wise would be. Once peo­ple catch on to this, they feel pres­sure to make such choices.

Im­perfec­tions of mea­sures of col­lege ap­pli­cant quality

Class rank at Kevin’s high school is an im­perfect mea­sure of the strength of stu­dents’ aca­demic tran­scripts. This is only one of many ex­am­ples of im­perfec­tion in the mea­sures that col­leges use to as­sess stu­dent qual­ity. Some more ex­am­ples come from:

  • Aca­demic tran­scripts be­ing in­sen­si­tive to aca­demic achieve­ment in sub­jects that aren’t taught. There are many aca­demic sub­jects that are not taught courses that high school stu­dents have ac­cess to. Col­leges give heavy weight to aca­demic tran­scripts when they as­sess stu­dents’ aca­demic achieve­ment, so study­ing sub­jects that aren’t taught in school is given rel­a­tively lit­tle weight.

  • Course grades be­ing in­sen­si­tive to un­usu­ally high achieve­ment. Course grades are capped: it’s gen­er­ally true that the high­est grade that a stu­dent can earn is an A. When the thresh­old for earn­ing an A is be­low that of sub­ject mas­tery, stu­dents aren’t awarded for de­vel­op­ing sub­ject mas­tery. In prac­tice, the thresh­olds for get­ting top grades are of­ten be­low that of sub­ject mat­ter mas­tery. For ex­am­ple, one can get the high­est mark on some AP ex­ams by an­swer­ing a rel­a­tively low per­centage of the ques­tions cor­rectly: low enough so that it doesn’t cor­re­spond to mas­tery.

  • In­di­vi­d­ual teach­ers’ grad­ing schemes be­ing im­perfect. Teach­ers of­ten as­sess stu­dent achieve­ment via mea­sures that differ­en­ti­ate stu­dents based on fac­tors other than how well stu­dents have learned the sub­ject. For ex­am­ple, in a chem­istry course, a teacher may de­sign tests that give heavy weight to com­pu­ta­tional ac­cu­racy to the ex­clu­sion of knowl­edge of chem­istry.

Each fac­tor gives rise to situ­a­tions in which stu­dents aren’t able to sig­nal qual­ity to col­lege by do­ing cer­tain ac­tivi­ties that would raise their hu­man cap­i­tal more than the ac­tivi­ties that do sig­nal qual­ity to col­leges.

Some ac­tivi­ties that build hu­man cap­i­tal also sig­nal qual­ity to col­leges. But it’s im­por­tant to rec­og­nize that build­ing hu­man cap­i­tal isn’t the same thing as sig­nal­ing qual­ity to col­leges. Many ac­tivi­ties that build hu­man cap­i­tal don’t sig­nal qual­ity to col­leges, and many ac­tivi­ties that sig­nal qual­ity to col­leges have neg­ligible value from the point of view of build­ing hu­man cap­i­tal.

What to do about it?

Hav­ing ac­knowl­edged that there’s a ten­sion be­tween build­ing hu­man cap­i­tal and sig­nal­ing qual­ity to col­leges, one is faced with the ques­tion of what to do about it. Con­cretely, in the story above, did Kevin make the right choice? Should he have taken the molec­u­lar biol­ogy elec­tive?

Ex­plor­ing other op­tions can some­times re­solve tensions

Of those ac­tivi­ties that build hu­man cap­i­tal to a given de­gree, some sig­nal qual­ity to col­leges more than oth­ers. Of those ac­tivi­ties that sig­nal qual­ity to col­leges to a given de­gree, some build hu­man cap­i­tal more than oth­ers.

Some­times when there seems to be a ten­sion be­tween build­ing hu­man cap­i­tal and sig­nal­ing qual­ity to col­leges, one can re­solve the ten­sion by be­ing imag­i­na­tive and re­source­ful. In the story, Kevin could have con­sid­ered pos­si­bil­ities such as

  1. Au­dit­ing the molec­u­lar biol­ogy elective

  2. Study­ing molec­u­lar biol­ogy on his own

  3. Tak­ing an on­line course or a course at a lo­cal com­mu­nity college

  4. Look­ing for a school year in­tern­ship in a molec­u­lar biol­ogy lab so as to learn some molec­u­lar biol­ogy out­side of the aca­demic sys­tem.

If Kevin had been able to do these things, he could have learned some molec­u­lar biol­ogy with­out hav­ing to sac­ri­fice his class rank.

Trade­offs be­tween build­ing hu­man cap­i­tal and col­lege admissions

Some­times there’s no pos­si­bil­ity of re­solv­ing the ten­sion, so that imag­i­na­tion and re­source­ful­ness don’t suffice. One does have to make trade­offs.

In Kevin’s situ­a­tion, the choice isn’t just “molec­u­lar biol­ogy vs. no molec­u­lar biol­ogy,” but “molec­u­lar biol­ogy vs. ev­ery­thing else that could be done within that time slot.” Put­ting aside the is­sue of tak­ing molec­u­lar biol­ogy low­er­ing Kevin’s GPA, there might be other ac­tivi­ties that would sig­nal qual­ity to col­leges bet­ter than learn­ing molec­u­lar biol­ogy.

There are two in­puts into think­ing about how to make trade­offs in this con­text:

  1. The rel­a­tive value of build­ing hu­man cap­i­tal vs. get­ting into a bet­ter col­lege. This de­pends very heav­ily on the de­tails of a given per­son’s situ­a­tion.

  2. The size of each trade­off. Even when it’s nec­es­sary to sac­ri­fice op­por­tu­ni­ties to build hu­man cap­i­tal for the sake of sig­nal­ing qual­ity to col­leges, some ac­tivi­ties in­volve smaller sac­ri­fices than oth­ers, whether be­cause they take less time and en­ergy, or be­cause they si­mul­ta­neously build hu­man cap­i­tal (even if not as much as pos­si­ble).

The an­swer to the ques­tion of how a given in­di­vi­d­ual can best bal­ance build­ing hu­man cap­i­tal and sig­nal­ing qual­ity to col­leges de­pends very heav­ily on the de­tails of in­di­vi­d­ual’s situ­a­tion: his or her val­ues, his or her goals, and the op­por­tu­ni­ties that are available to him or her.

Though there’s not an easy an­swer to the ques­tion of how to best bal­ance build­ing hu­man cap­i­tal and sig­nal­ing qual­ity to col­lege, it’s helpful to ex­plic­itly rec­og­nize the dis­tinc­tion be­tween two things, and the trade­offs in­volved. The first step to re­solv­ing a ten­sion is rec­og­niz­ing that it’s there.

For commenters

I’m pri­mar­ily in­ter­ested in feed­back in­volv­ing sig­nal­ing as it re­lates to un­der­grad­u­ate ad­mis­sions (as op­posed to, e.g. sig­nal­ing in the con­text of ro­man­tic courtship), but I’d wel­come re­lated ob­ser­va­tions about sig­nal­ing to grad­u­ate school or em­ploy­ers based on high school or col­lege course­work.

What’s an ex­am­ple from your own life where build­ing hu­man cap­i­tal and sig­nal­ing qual­ity to col­leges have come into con­flict? How did you re­solve the con­flict? Do you think you made the right choice? Is there any­thing you would have done differ­ently?

Thanks to Vipul Naik for con­ver­sa­tions that lead to this post, and to Luke Muehlhauser for feed­back.