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Azathoth123 comments on Open thread, 7-14 July 2014 - Less Wrong Discussion
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The problem with using a measure like an IQ score is that if the measure happens to work poorly for one particular person, the consequences can become very unbalanced.
If IQ tests are more effective than other tests, but employers are banned from using IQ tests and have to use the less effective measures instead, their decisions will be more inaccurate. They will hire more poor workers, and more good workers will be unable to get jobs.
But because the measures they do use vary from employer to employer, the effect on the workers will be distributed. If, say, an extra 10% of the good workers can't get jobs, that will manifest itself as different people unfairly unable to get jobs at different times--overall, the 10% will be distributed among the good applicants such that each one finds it somewhat harder to get a job, but eventually gets one after an increased length of jobless time.
If the employers instead use IQ tests and can reduce this to 5%, that's great for them. The problem for the workers is that if IQ tests are poor indicators of performance for 5% of the people, that won't just be 5%, it'll be the same 5% over and over again. The total number of good-worker-man-years lost to the inaccuracy will be less with IQ tests (since IQ tests are more accurate), but the variance in the effect will be greater; instead of many workers finding it somewhat harder to get jobs, there'll be a few workers finding it a lot harder to get jobs.
Having such a variance is a really bad thing.
(Of course I made some simplifying assumptions. If IQ tests were permitted, probably not 100% of the employers would use them, but that would reduce the effect, not eliminate it. Also, note that this is a per-industry problem; if all insurance salesmen got IQ tested and nobody else, any prospective insurance salesman who doesn't do well at IQ tests relative to his intelligence would still find himself chronically unemployed.)
The same, of course, applies to refusing to hire someone based on race, gender, religion, etc.: you can reduce the number of people who steal from you by never hiring blacks, but any black person who isn't a thief would find himself rejected over and over again, rather than a lot more people getting such rejections but each one only getting them occasionally.
(Before you ask, this does also apply to hiring someone based on college education, but there's not much we can do about that, and at least you can decide to go get a college education. It's hard to decide to do better on IQ tests or to not be black.)
Yes there is, we can pass laws making it illegal to hire on the basis of college degrees (possibly with an exemption for degrees directly relevant to the job).
You can't decide to get accepted by an elite college.
Another way to phrase this statement is that there is less motivation to engage in costly signaling. Thus there is less deadweight signaling loss and hence more resources available to utility production.
I was referring to discrimination based on whether you have a college education, not discrimination based on which college education you have.
Discrimination based on eliteness of college doesn't raise the same sort of problems because employers can't hire just elite college graduates and nobody else--there aren't enough of them. After the employers hire all the elite college graduates, the remaining ones go to colleges which are hard to rank against each other (unlike IQ scores, which are numbers and are easy to compare). The employers will in effect select randomly from that remaining pool, so it won't lead to people in that pool becoming permanently unemployed, or even to just becoming permanently underemployed by large degrees.
If I had to choose between black people getting the kind of jobs they got when discrimination against them was permitted, and signalling, I'd decide the signalling is less costly, and so would pretty much everyone else.
You do realize the signaling, at least in the US, currently involves taking out student loans under terms that boarder on debt peonage.
There was a long period of time between when discrimination against blacks in employment was forbidden, and college prices rose to excessive levels. I doubt that signalling alone can explain the increase in college costs, or that letting employers discriminate based on race or IQ would reduce them. I'd blame it more on other government interference (such as subsidizing loans and making it essentially impossible to discharge loans in bankruptcy).
Furthermore, the situation of black people before the civil rights movement was bad enough that I'd be hard pressed to decide that even being massively in debt for a college loan is worse.