Abstract for: Hiring College Graduates to Flip Hamburgers: An Endogenous Theory of Professionalization
In this paper, we offer an endogenous theory of professionalization and ever-higher degree attainment. We theorize that higher education is a self-driving growth engine. We introduce two endogenous 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 an illustrative dynamic model based on simple rules of degree attainment and job selection, we argue that these self-driving growth engines are adequate to over-incentivize degree attainment, and can affect the match between supply and demand for college-educated labor. 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.