Bartender, Cashier, Cook, Janitor, Security Guard, Waiter
By Bryan Caplan
The human capital and signaling stories can both explain the existence of malemployment. But malemployment research still provides some of the most compelling evidence in favor of the signaling model. The latest draft of my The Case Against Education explains why:
By itself, malemployment is compatible with the human capital model. How? Graduates are “malemployed” because they failed to acquire marketable job skills in school. This could mean that malemployed graduates failed to learn and retain the curriculum; recall that on the National Assessment of Adult Literacy, over 50% of high-school grads and almost 20% of college grads have less than Intermediate literacy and numeracy. Or it could mean that malemployed graduates learn an irrelevant curriculum; recall that over 40% of high school coursework and over 40% of college majors score “Low” in usefulness. When a B.A. bartender asks, “Why oh why can’t I get a better job?,” the human capital model bluntly answers, “Because despite your credentials, you didn’t learn how to do a better job.”
The signaling model weaves a rather contrary tale. Malemployment reflects an arms race in the labor market – workers’ never-ending struggle to outshine each other. Rising education automatically sparks credential inflation: The amount of education you need to convince employers to hire you automatically rises too. In an everyone-has-a-B.A. dystopia, an aspiring janitor might need a master’s in Janitorial Studies to land a job scrubbing toilets.[i] When a B.A. bartender asks, “Why oh why can’t I get a better job?,” the signaling model answers, “Because too many competing workers have even more impressive credentials than you do.”
If both human capital and signaling allow for malemployment, why raise the issue? Because the two stories diverge on one crucial point: Does the labor market reward workers for education they do not use? Human capital says no; signaling says yes. Take bartenders with B.A.s. On the plausible assumption that college does not transform students into better bartenders, the human capital model predicts that B.A.s will fail to raise bartenders’ income. The signaling model, in contrast, predicts the opposite: Bartenders with B.A.s will outearn bartenders without B.A.s. Why? Because bars, like all businesses, want intelligent, conscientious, conformist workers – and a B.A. signals these very traits. So given a choice, bars favor applicants with B.A.s despite the irrelevance of the academic curriculum to the job.
To weigh the power of human capital versus signaling, however, we must zero in on occupations with little or no plausible connection to traditional academic curricula. Despite many debatable cases, there are common occupations that workers clearly don’t learn in school. Almost no one goes to high school to become a bartender, cashier, cook, janitor, security guard, or waiter. No one goes to a four-year college to prepare for such jobs. Yet as Table 4.6 shows, the labor market comfortably rewards bartenders, cashiers, cooks, janitors, security guards, and waiters for both high school diplomas and college degrees.
|Occupation||H.S. Premium||College Premium|
High school premium = [(median earnings for high schoolgraduates)/(median earnings for high school drop-outs)] -1.
College premium = [(median earnings for collegegraduates)/(median earnings for high school graduates)] -1.
Source: Supplementary data for The College Payoff, supplied by author Stephen Rose.
None of these occupations are weird outliers. True, most bartenders, cashiers, cooks, janitors, security guards, and waiters lack college degrees. Yet in the modern economy, all are common jobs for college grads. More work as cashiers (48th most common job for college grads) or waiters (50th) than mechanical engineers (51st). More work as security guards (67th) or janitors (72nd) than network and computer systems administrators (75th). More work as cooks (94th) and bartenders (99th) than librarians (104th). I selected Table 4.6’s occupations to minimize controversy. Human capital purists could insist that college provides useful training for electricians, real estate agents, or secretaries. But even the staunchest fans of human capital theory struggle to say, “College prepares the next generation of cashiers and janitors for their careers” without smirking.
[i] I borrow this example from Vedder et al, p.28: “We jokingly predict that colleges will offer a master’s degree in Janitorial Studies within a decade or two and anyone seeking employment as a janitor will discover no one will hire unless proof of possession of such a degree is presented.”