Education Inflation, Technological Advancement, and Cognitive Surplus

One possible way to mitigate this problem is a Pigouvian tax on signalling (perhaps compensated for by a reduction in income tax).<p>Signalling is a lot like standing up at a baseball game. It gives you a great view, at the cost of having your legs get tired. Once everyone else starts doing it, your view is no better than before, and everyone is a little more tired than before. But no one can sit down, because they don't get to see the game.<p>A tax on signalling might reduce the benefits and thereby reduce the amount of resources wasted. Additionally, the people who don't engage in signalling would enjoy reduced taxes.<p>To begin, I'd propose an education tax, since education seems to be our nation's most expensive form of signalling. You want an education? Fine, but be prepared to pay an extra $5-10k/college year to compensate the people who don't get a job as a result of the degree inflation you cause.<p>(Obviously, ending subsidies for higher education would also be a good start.)

Hmm<p><i>In order to obtain a job, you need to satisfy an employer's stringent and sometimes arbitrary requirements. In order to do so, you must spend extra years of your life in school.</i><p>That's a naive analysis - given a pool of unknown candidates (e.g a stack of CVs from people unknown to the hiring manager) he or she will obviously look for "the best" candidates, and lacking any other indication (e.g. from fresh grads with no work experience) will go for the best qualified. It's not the case that employers are driving up the academic requirements - they are merely responding logically to a more academically qualified pool of candidates.

On the one hand, the spirit of inquiry and promotion of learning that higher education (should be) driven by is an excellent thing for both "productivity" and society as a whole.<p>On the other hand, the idea that colleges exist merely as a credentialing system, and the intellectual complacency that pervades much of academia since it can extract such high rents as a gatekeeper, result in a vast misallocation of resources.<p>Untangling the two (education vs. credentialing) will take time, but with the enormous debt-loads of graduating students these days, I find it hard to believe that today's college students will accept sending their own children through an educational/credentialing system that resembles today's status quo.

China's "education inflation" problem is not like ours. The problem in China: it's an underdeveloped economy. This may change in 20 years-- I think everyone in the world hopes it does-- but right now, there are so few middle-class jobs available in countries like China, Vietnam, and the Philippines. The competition is incredibly tight and (as anywhere else) mostly on socioeconomic status and connections, not education.<p>Our problem is different: technology and the national job market have created The Résumé Blizzard. The cost of sending a CV to an employer has dropped from about $1 (today's dollars) in postage, nice paper, and printing, to $ε in electron-pushing. Most HN posters are relatively successful in their careers and probably send out 3-5 CVs per job search, but there are unqualified lottery-players who send out hundreds or thousands. Front doors don't work anymore-- "closed till the Blizzard ends"-- and colleges and universities now provide a very expensive sorting mechanism for entry-level jobs. The truth is that job-matching is a difficult unsolved problem that no one has solved very well, and the universities and business schools are, at the entry level, the best solution.