Human Capital versus the Screening Hypothesis

Scucca · 05-02-08, 07:42 AM

To what extent is tertiary education an investment in human capital and therefore productivity? Is it really just an exercise in certification? If so, have we allowed too much expenditure on tertiary education: be it "just another law graduate", a "paper shuffling business school no-mark" or a humanities "it has social value, honest" blubberer?

rathi · 05-02-08, 03:06 PM

Depends on the type of school. You'd be hard pressed to claim that med school wasn't worth the effort. Law School tends to teach things you aren't taught anywhere else either. Business and humanities could probably be fully taught and the undergraduate level however. In the long run though, the indirect effects of such programs are nearly impossible to measure. Unless their is a pressing need to move the resources somewhere else, I see no reason not to keep such programs alive.

Scucca · 05-02-08, 03:34 PM

Quote:

Originally Posted by rathi

Unless their is a pressing need to move the resources somewhere else, I see no reason not to keep such programs alive.

I certainly wouldn't support the closure of programs (although in Britain, we've foolishly reduced tertiary education provision in science because of the relative expense for universities). Its really about the numbers. For example, if you believe in the screening hypothesis students are under increased pressure to acquire post-graduate education. Due to so many managing to get through the undergrad stage, students are having to acquire further certification in order to stand out

Goldenboy219 · 05-03-08, 12:29 PM

Quote:

Originally Posted by Scucca

I certainly wouldn't support the closure of programs (although in Britain, we've foolishly reduced tertiary education provision in science because of the relative expense for universities). Its really about the numbers. For example, if you believe in the screening hypothesis students are under increased pressure to acquire post-graduate education. Due to so many managing to get through the undergrad stage, students are having to acquire further certification in order to stand out

I believe this to be a good thing. What it amounts to is a more/better educated society, and is a form of "race to the top".

Scucca · 05-03-08, 12:56 PM

Quote:

Originally Posted by Goldenboy219

I believe this to be a good thing. What it amounts to is a more/better educated society, and is a form of "race to the top".

So it isn't just added expense that also keeps the student out of the labour force longer?

I can appreciate the gains from postgraduate education. However, if its simply a means to grab an additional certificate (with no productivity gain) then surely we'd have to refer to social costs?

LLOD · 05-05-08, 10:45 AM

I think that's an interesting point that Scucca has made - that basically competition for jobs means that more students are opting for post graduate qualifications because so many are getting throuhg the undergraduate stage.

Then goldenboy219, you say that you believe that this is a good thing because we have a better educated population. I certainly agree that a better educated population is desirable.

On the other hand, I'm going back to Scucca's point that we have more graduates than ever before. A criticism of much of our education system (in the UK) is that it is easier to get qualifications today than previously. In addition, that there are more graduates than ever before could be at the expense of what used to be termed 'skilled labour'. By that I mean joiners, plumbers, electricians and so on are increasingly scarce. This shortage seems to have arisen because we no longer value vocational education which diverts people into university education.

Is the shortage of electricians etc., a contributing factor to this loss of productivity that Scucca mentions?

In addition, I am wondering if, because there are more graduates than ever before as well as a shortage of electricians, plumbers etc., then do we really have a better educated society as suggested by goldenboy219?

Goldenboy219 · 05-05-08, 11:25 AM

Quote:

Originally Posted by LLOD

I think that's an interesting point that Scucca has made - that basically competition for jobs means that more students are opting for post graduate qualifications because so many are getting throuhg the undergraduate stage.

Then goldenboy219, you say that you believe that this is a good thing because we have a better educated population. I certainly agree that a better educated population is desirable.

On the other hand, I'm going back to Scucca's point that we have more graduates than ever before. A criticism of much of our education system (in the UK) is that it is easier to get qualifications today than previously. In addition, that there are more graduates than ever before could be at the expense of what used to be termed 'skilled labour'. By that I mean joiners, plumbers, electricians and so on are increasingly scarce. This shortage seems to have arisen because we no longer value vocational education which diverts people into university education.

Is the shortage of electricians etc., a contributing factor to this loss of productivity that Scucca mentions?

In addition, I am wondering if, because there are more graduates than ever before as well as a shortage of electricians, plumbers etc., then do we really have a better educated society as suggested by goldenboy219?

I cannot attest to a shortage in skilled labor in the midwest, primarily the Chicago industrial complex. In some cases, a plumber can make more money than a doctor, although this is not always the case because a large % of these type of jobs are unionized, and therefore wages are pre negotiated.

A good example would be a local plumbing company. In Illinois and Indiana, there is a certain type of certification necessary to receive workman's compensation and general liability insurance in a respective field be it welding, plumbing, electrical, etc... Painting and general construction are much more lax, but the coverage of these various aspects of insurance will also "shrink".

There are also a lot of people going back to school who either work(ed) in the labor sector, or people leaving school to secure employment. If anything, a shortage would call for higher wages to attract human "capital" to meet the demand.

Scucca · 05-05-08, 01:12 PM

Quote:

Originally Posted by LLOD

On the other hand, I'm going back to Scucca's point that we have more graduates than ever before. A criticism of much of our education system (in the UK) is that it is easier to get qualifications today than previously. In addition, that there are more graduates than ever before could be at the expense of what used to be termed 'skilled labour'. By that I mean joiners, plumbers, electricians and so on are increasingly scarce. This shortage seems to have arisen because we no longer value vocational education which diverts people into university education.

I think you make a relevant point, with our education system incapable of eliminating more general skills problems in the economy. Thus, compared to our European competitors, we tend to rely much more on 'on the job' training. However, I'm not sure over the size of the problem. For example, investment in university places has tended to stunt social mobility. To understand that result we'd have to suggest that more jobs now demand a degree and, given university is still dominated by the middle classes, opportunities for those from a low income background have been reduced. The education system is then not just corrupting supply side decisions (i.e. we have too many preferring academic to vocational training) but also demand side result (i.e. providing a cheap method of sorting through applicants via the dumping of all non-graduates applications in the bin)

LLOD · 05-06-08, 05:11 AM

goldenboy219, what you say about a shortage of skilled labour calling for higher wages certainly makes sense to me.

I can really only speak about where i live and from what I hear on the news about other areas of the UK so I'm not sure what the general situation is in the UK. Many of our local plumbers, for example, contract themselves out to local builders and by doing so make themselves unavailable to customers such as myself who aren't building houses. (There are few independent plumbers etc.) In that situation, I don't know to what extent the plumber's wages are pre-negotiated. The dearth of skilled labour, especially further south in the UK, is apparently being filled by Polish immigrant workers. Despite this shortage of skilled labour, such people, when they are self-employed, can apparently command an extremely good wage - possibly, as in the example you quoted, earning higher wages than a doctor or any type of graduate. Yet the money doesn't seem to be attracting people into those jobs. So I'm puzzled about what is really going on.

When you mention in a US context that insurance will 'shrink', does that imply the result will be more or fewer people working in general contruction?

LLOD · 05-06-08, 05:27 AM

Scucca, that's an interesting suggestion that you make about employers possibly using university degrees as a cheap method of filtering job applicants. Which makes me wonder if employers aren't putting pressure on educational institutions to open their doors to students for that very reason. Certainly in secondary education employers have increasingly more influence on what is taught and education seems to be very much about preparing young adults for the world of work (as opposed to offering education in a more general, broader sense). I wonder if employers haven't shifted focus away from schools and onto tertiary education, especially since tertiary education has had to become competitive. And I wonder if, by doing so, they have actually worked against themselves in that in some cases tertiary education has become, as you suggest in the original post, just an exercise in certification.

Does that sound like a plausible scenario?