This article is an answer to a homework question on signaling, asked as part of a class on Caplan’s forthcoming The Case Against Education. My actual answer was half this long as I realized after the fact it should be double spaced, but I thought this was a decent exposition of conformity signaling so I wanted to blog it in the not-reduced form.
2. Use conformity signaling to explain the long-run persistence of a specific, seemingly dysfunctional practice.
I think many practices associated with the modern workplace are more or less encouraged by the desire to conform. Workplace attire is a classic case which particularly irks me. In making this argument I proceed in two sections. First, I present evidence that this practice may be properly classified as both dysfunctional and durable. Second, I argue that the persistence of this practice is better explained by signaling than fundamentals.
I am fortunate enough to escape mandatory suit and tie at my workplace, but we are required to wear slacks and long sleeved buttoned shirts, as well as awfully uncomfortable dress shoes. Such attire is costly as a capital investment in the first place and also on an ongoing basis through the need for dry cleaning and regular replacement. In addition to the pecuniary cost, this attire is physically uncomfortable. The shoes are clearly inferior to athletic shoes in terms of immediate physical comfort and also in terms of their ability to prevent long term physical ailment including joint pain. There is no noticeable difference with respect to their locomotive capacity. Slacks and shirts do not seem to confer a noticeable gain or loss. There is the minor inconvenience of needing to roll up my sleeves during lunch, and slacks may deteriorate faster than blue jeans, but I’m not confident about that.
In short, there is no noticeable productivity enhancement from wearing business clothes relative to wearing casual clothes. There is a noticeable price difference wherein business clothes are the costlier option. The combination of these two facts indicates that it would not otherwise be voluntarily preferred by individual employees, except for the extant gains from conformity. This fits the concept of a dysfunctional practice. It is easily evidenced that this trend has existed for a long time. Wikipedia indicates that the modern suit descended from 17th century formal court wear. The modern business suit as well as the button-down shirt were both late 19th century innovations. While originally intended as sports attire, they rapidly found use in business. So the institution of the modern business attire has been around for a century or so.
Because business attire lacks labor augmenting value, classic capital theory alone cannot explain its durability. The lack of productivity enhancing value, coupled with the costliness involved would make business attire a perfect example of a signal if and only if it can be shown to correlate with some other factor of business value. Three of the usual suspects for a signal of business value include component signals of intelligence, conscientiousness, and conformity. One might argue high fashion can reveal intelligence, but I would counter that the creative art of fashion is not revealed by wearing the same clothes everyone else wears. Athletes are high in conscientiousness, but wearing athletic shoes to an interview would not be expected. I think conformity signaling well describes the utility of business attire.