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A model of glutting: human capital and labour markets in the long-run

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  • C. Diebolt
  • B. El Murr

Abstract

For over a century and a half, there have been cyclical phases of saturation and shortage in the numbers of students enrolled at German and Prussian universities. Starting from this observations, this article constructs a neoclassical glutting theory. A twofold hypothesis is put forward. First, the behaviour of students in their choice of curriculum depends on the expected rewards. Indeed, the allocation of students to the various faculties depends on the comparative yields of the latter in terms of expected earnings and job availability in the corresponding professional sectors. Thus, the rewards expected by a student are represented by the earnings on the labour market at a given moment and that he or she considers to be sustainable in time. Second, an attraction phenomenon may appear for certain curricula when a shortage occurs in different professional sectors. Once the shortage has been made up, the demand effect continues as a result of delay in the perception of the situation by young people. This may gradually lead to comparative over-production of qualified university leavers. This unbalanced situation diverts new cohorts of students to other sectors of education and may cause a new shortage, finally resulting in a cyclical movement modulated according to job availability.

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  • C. Diebolt & B. El Murr, 2003. "A model of glutting: human capital and labour markets in the long-run," Applied Economics Letters, Taylor & Francis Journals, vol. 10(9), pages 557-560.
    • Handle: RePEc:taf:apeclt:v:10:y:2003:i:9:p:557-560
    DOI: 10.1080/1350485032000100251
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    References listed on IDEAS

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    1. J. R. Walsh, 1935. "Capital Concept Applied to Man," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 49(2), pages 255-285.
    2. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, July.
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    Cited by:

    1. Claude Diebolt & Olivier Darné, 2005. "Cliometrics of Academic Careers and the Impact of Infrequent Large Shocks in Germany before 1945," Post-Print hal-00279246, HAL.
    2. Magali JAOUL-GRAMMARE, 2014. "Prestige social des professions et substituabilité des filières universitaires en France au XXème siècle," Economies et Sociétés (Serie 'Histoire Economique Quantitative'), Association Française de Cliométrie (AFC), issue 49, pages 1309-1333, Août.
    3. Magali Jaoul-Grammare, 2014. "Prestige social des professions et substituabilité des filières universitaires," Working Papers of BETA 2014-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Claude Diebolt & Bachir El Murr, 2004. "A cobweb model of higher education and labour market dynamics," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(3-4), pages 409-430.
    5. Magali Jaoul, 2004. "Enseignement supérieur et marchés du travail. Analyse économétrique de la théorie de l'engorgement," Economie & Prévision, La Documentation Française, vol. 166(5), pages 39-57.
    6. Magali Jaoul-Grammare, 2006. "Cliométrie de l’engorgement en France. Evaluation théorique et empirique," Working Papers 06-07, Association Française de Cliométrie (AFC).
    7. Magali Jaoul-Grammare, 2014. "Social prestige of occupations and substitutability of university courses in France during the 20th century [Prestige social des professions et substituabilité des filières universitaires en France," Post-Print hal-01744651, HAL.

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