By Dr. Gary L. Deel, Ph.D., J.D.
Faculty Director, School of Business, American Public University

This is the 10th article in a 12-part series, adapted from my dissertation work at the University of Nevada Las Vegas, on the discord between academe and industry over the role of hospitality education and the purpose it serves in career development for hospitality professionals.

In the past two articles, we explored Human Capital Theory (HCT), Credentialist Theory (CT) and Job Market Signaling Theory (JMST) as potential explanations for the value of higher education in the hospitality industry. Now, we’ll look at a fourth and final socioeconomic theory, Filtering Theory (FT).

Arrow’s Filtering Theory

Filtering theory, first proposed by Ken Arrow in 1973, was introduced as an interpretation of and distinction from HCT. First, Arrow noted a dichotomy in views about the way in which higher education brings about higher perceived potential productivity.

Classical HCT proponents argue that enhanced productivity is derived from the acquisition of advanced cognitive skills in school. Critics argue that higher education serves instead to develop socialization skills such as group work, attendance and punctuality, time management, and the tracking and completion of assigned tasks (this bears some resemblance to the IQ vs. EQ debate discussed earlier in this series).

However, Arrow struck an accord in pointing out that whether higher education promotes advanced cognitive skills or greater socialization skills. Both imply an end state that yields higher productivity for the end users, the employers.

Higher Education Helps Employers Distinguish among Individuals’ Potential Productivity

Contrary to the view that the function of higher education is to better equip individuals for their future occupations, FT instead asserts that higher education serves as a screen to help employers distinguish among the relative potential productivity of individuals. FT is compatible with JMST insofar as it concurs that employers are making speculative decisions about the productivity of employees in an uncertain environment. In addition to the “signals” being sent by prospective employees, employers have the available statistical data that translate those signals into meaningful conclusions.

However, FT argues that higher education’s segmentation of candidate groups allows employers to infer certain potential productivity abilities for each category, thereby “filtering” the candidate pool based on these criteria.

Filtering Theory Notes that Higher Education Filters Job Candidates Twice

FT holds that there are three relevant characteristics for each college-educated applicant: record before college, probability of success in college and end productivity. These three characteristics are assumed to be related, but not perfectly so and not in every individual. In this sense, higher education serves to filter these candidates twice.

The first filter occurs in the admission of students to college based on their secondary school performance and other enrollment criteria. Students with commendable records coming out of high school are assumed to have a high level of potential productivity and are thus admitted into college. Those without sufficiently high metrics are filtered out.

The second filter occurs in the eventual thinning of enrolled populations during college, as students struggle with their academic performance, drop out of school for personal or financial reasons, or otherwise fail to make it to graduation. Over time, those who lack the necessary qualities for success in college will fall short, while those with all the needed skills and abilities will reveal themselves at graduation time.

Therefore, given the assumption of a relationship among all these factors, higher education institutions do the trial work of testing the relationship between the first two characteristics. Employers typically are privy only to whether or not an individual is college-educated.

But given this “filtering” function that institutions of higher education serve, employers needn’t have any additional information. A level of potential productivity can be inferred upon each individual applicant based upon whether they “made the cut” before and during college.

FT has also been evaluated in comparison to other noted theories such as CT and JMST, and it remains a legitimate explanation for the purpose of hospitality higher education.

Higher Education Is a Factor Worthy of Consideration in Employment Decisions

Regardless of whether one agrees with the premises of HCT, CT, JMST, or FT, or any combination thereof, one underlying constant is that higher education is a factor worthy of consideration in employment for both employers and employees, notwithstanding the motives for such consideration. Regardless of the theories that companies and professionals may choose to embrace in strategizing employment efforts, it is inarguable that higher education plays a role in these dynamics.

In the next part of this series, we’ll look at social learning theory and the way it informs how hospitality industry professionals learn in their careers.

About the Author

Dr. Gary Deel is a Faculty Director with the School of Business at American Public University. He holds a J.D. in Law and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for American Public University, the University of Central Florida, Colorado State University and others.