Does education raise people's productivity or does it just signal their existing ability?

As has been widely documented, the COVID-19 pandemic has led to `significant' learning loss. While many have called for catch-up measures, there are counterarguments based on the hypothesis that education itself is a waste of time and money (Caplan, 2018) which imply that such measures aren't necessary: as long as young people are ultimately awarded educational qualifcations (e.g. GCSE and A level grades) reflecting their ability then they will be able to progress in their lives regardless. At the heart of this debate is the fundamental question of whether education is a worthwhile investment from society's perspective, acting to drive economic growth by making individuals happier, healthier and more productive. Or whether it is merely an expensive way for individuals to signal their pre-existing productivity and, hence, to help education institutions and employers choose between applicants. This question has been the subject of research for many years, and in this briefing note we present the evidence from the most rigorous quantitative studies.