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Work-Education Mismatch: An Endogenous Theory of Professionalization
Navid Ghaffarzadegan1, Yi Xue2, Richard C Larson3
1Assistant Professor, Department of Industrial and Systems Engineering, Virginia Tech, 231 Durham Hall, 1145 Perry St, Blacksburg, VA 24061.
Abstract:
We model the education-workforce pipeline and offer an endogenous theory of professionalization and ever-higher degree attainment. We introduce two mechanisms that act on the education enterprise, causing the number of educated people to increase dramatically with relatively short-term changes in the job market. Using our illustrative dynamic model, we argue that the system is susceptible to small changes and the introduced self-driving growth engines are adequate to over-incentivize degree attainment. We also show that the mechanisms magnify effects of short-term recessions or technological changes, and create long-term waves of mismatch between workforce and jobs. The implication of the theory is degree inflation, magnified pressures on those with lower degrees, underemployment, and job market mismatch and inefficiency.
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