The Sheepskin Effect 🐑

Happy summer! 😎

School is out in Fargo and the house is full. That means writing on the porch.

Today, I wanted to dive into a concept I talk a lot about in podcast interviews like this one: the Sheepskin Effect. 🐑

We know that if you go to 7 of 8 semesters at a university, you don't make 7/8ths of what a college graduate makes.

In fact, sixty percent of the economic benefit of an education comes from the actual degree rather than the learning or skills the student achieves.

Why? Is the last semester really worth more?

Of course not.

Employers are paying for finishing rather than learning.

Hence the name Sheepskin Effect.

Employers pay for the diploma - the “sheepskin” it is printed on - rather than the human capital being built over time, as Zvi notes.

Two major reasons for the Sheepskin Effect are signaling and filtering. So this week, we dive into how web3 credentials can improve the signal for students and help employers better filter through candidates.

Hope you enjoy! 🙌

-Scott

The value of education should be the learning, not the diploma. Web3 credentials can end this Sheepskin Effect and act as a signal and filter.