As Bryan Caplan points out in his new book, The Case Against Education, most of the earnings differential associated with college does not reflect stuff colleges teach their students, but rather the already-existing advantages that college graduates possess (more intelligence, greater discipline, more ambition, more prior learning, etc.) that a diploma reveals to employers. The Sheepskin Effect is real. We expend enormous resources in producing pieces of paper (diplomas) conveying labor market information. The move toward getting a master’s degree—more diplomas—aggravates an already hugely inefficient system. [link]
This of course is the debate about what is valuable about the HBS is not what they teach you, but their ability to recognise those who are already likely to succeed. Many years ago, Paul Graham wrote a great essay touching on so many key issues that Higher Ed wants to wish away.