So signaling is a good idea

Bryan Caplan explains that signalling s not all bad, does some good.. Or should I say, mostly bad, but does some good? It doesn't matter, Brian has indicated signalling can be a good idea, improve on it.  

How can we improve? More accurate education ledgers.  Does Brian have a better improvement?

Signaling can be economically efficient under auspicious circumstances.  But even in an unregulated market, signaling has a clear negative externality: When you signal a little more, you make yourself look better without making the world any better.  So people naturally tend to over-do it, from a social point of view.