Arnold Kling  

Macroeconomic Costs of Credentialism

Hummel on Government Military ... The Era of Expert Failure...

My latest essay:

Entrepreneurs in healthcare and education face unusually strong barriers to entry. Both industries are credentials cartels. Licensing and accreditation are key requirements to compete in those fields, and incumbents are in control of the process. In addition, particularly in education, the government subsidizes major service providers.

In the long run, education and health care are the sectors most likely to grow. The more impediments that there are to transformation of these sectors, the more difficulty the economy will have returning to full employment.

COMMENTS (9 to date)
Ronald writes:

I definitely agree with you. Small business owners never realize the full costs associated with barriers to entry and often leave them out of start-up costs. We have already seen healthcare on the climb yet education looks a little shaky.

Troy Camplin writes:

Isn't that the truth! With my Ph.D. in the humanities and Master's in English I cannot teach high school English and humanities unless I get certification. Yet I can teach college. This is absurd on the face of it.

It is perhaps not surprising that educaton and health care have such high costs.

[broken link fixed.--Econlib Ed.]

Rebecca Burlingame writes:

In the near future it might be possible for local communities to come together to provide support systems for knowledgeable and degreed people without jobs, perhaps at times even finding ways to pay their loans so that the communities can benefit from their knowledge. By so doing, the issues of credentialism can be internalized, and both individual and community can benefit.

Roger Sweeny writes:


That's one reason high school English and humanities teachers are paid more than college adjuncts (who are the majority of new college hires these days).

Rebecca Burlingame writes:

How might credentialing be possible at the community level? Or, how might a community "hire" an individual when a corporation, business or non-profit can not? Even though the corporation, business or non-profit can benefit from the individual's skills, the money-restricted entity has a limited means of compensation ability, in that the vast part of its capital, resources and money is already committed in other areas, plus it is only capable of economic action when it stays in the black.

Whereas, the community is composed of vast quantities and elements of resources, many of which are actually underutilized. While many of those elements are not represented by money, they can still match resource needs that a community "hire" has.

Troy Camplin writes:

You don't have to tell me about the exploitative wages of adjuncts.

Troy Camplin writes:

Of course, I suppose they only feel exploitative to someone who has 10+ years of education, only to get paid jack-squat. Market prices and all, in all honesty.

It's harder to complain if you're a free market supporter! :-)

Mr. Econotarian writes:

I cannot teach high school English and humanities unless I get certification. Yet I can teach college.

But perhaps high school certification teaches you what to you need to know to teach high school: how to shoot a handgun in a self-defense situation, counter-insurgency against gangs in your classroom, how to defuse disruptive students, dealing with parents that sue you so their kid gets an A, dealing with mainstreamed kids in your classroom that can't read or speak english, etc.

Troy Camplin writes:

LOL.I wish that's what it taught you -- then I might find it of some value!

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