# 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
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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](/lw/ihw/advanced_placement_exam_cutoffs_and_superficial/), 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?
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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
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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.