I found this debate between Tyler Cowen and Alex Tabarrok (at Marginal Revolution University), on whether college education provides learning or signaling, interesting. Particularly important right now: If college education is primarily learning and learning is productivity enhancing, then universal college education will be productivity enhancing, but if college degrees simply provide workforce signaling--who is likely to be productive, and who is not--then universal college education will degrade this signaling mechanism.
I think I side with Alex on this one: We are primarily providing a signaling role. But I would qualify that a bit: Tyler makes the point that in the process of learning, students acquire soft skills: critical thinking, social interactions, how to acquiesce to rules... I agree with this. So a better question might be, does the content of college classes really matter? While students will remember very few of the details of their individual classes (I remember taking a class on ancient world history, but remember little other than my professor pretending to be Julius Caesar) they likely gain other skills that are valuable to employers.
So of course, the answer to the question 'Is Education Signaling or Skill Building?' is: YES.
