Reasons for Student Employment: The Case of Low Enforcement of University Standards

Author(s):

Maria YudkevichAlexander Apokin

Conference:

ECER 2009

Network:

22. Research in Higher Education

Format:

Paper

Session Information

22 SES 08 C, Higher Education, Labour Markets and Employability

Paper Session

Time:

2009-09-30

08:30-10:00

Room:

HG; HS 29

Chair:

Mari Karm

Contribution

Our paper focuses on the importance of beliefs and expectations in functioning and the efficiency of the institutions of market for higher education. Due to credence nature of education and high measurement cost of educational quality of at this market both students and prospective employers of the graduates have to rely on the signals they got and form the beliefs to interpret these signals. These beliefs may force universities to change their educational policy if educational standards are not properly enforced. Why more able students in Russia start working part-time during their studies earlier than less able ones? What are the factors that determine the part-time employment duing university studies? While classical Spence lmodel predicts that diploma may serve as a signal at the labor market in the sense that more productive workers obtain diploma and less productive ones do not, at the Russian labor market for students and young graduates the situation is rather reverse. We present a formal microeconomic model that explains why there exists such a widespread student employment in Russia with more able students being more active in seeking the job and starting their careers earlier, sacrificing the quality of education they get while striving to work full-time. We take into account an endogeneity of education effort requirement (that is due to the absence of educational standards enforcement) settled by universities, and demonstrate that alternative signaling by job experience may exist even if productivity increase from education is high enough. We use the employers' rationale to make an equilibrium refinement and to explain the features of equilibrium that emerge at Russian labor market for young labor force. We compare this outcome with those emerging in European countries and USA.

Method

We test our theoretical findings with the data of Economics of Education Monitoring Survey (a series (since 2002) of nationally representative annual surveys of higher education institutions, students, faculty and administrators. It is a joint project of Ministry for Education and Science, Russian Statistics Office (Rosstat) and HSE). Our dataset includes data on 1035 employers and 2092 students. Statistical and regression analysis is used.

Expected Outcomes

Russian labor market experiences a continuous growth of student part-time and full-time employment. While ratios of employed correspond to the worldwide trend, there are some distinct features as well. The most important one is that while-atuniversity employment might be considered as a signal of productivity for perspective employers. The results obtained from model suggest several findings consistent with present situation on Russian market for education. Lack of funding of higher education creates incentives for universities to economize on education which makes early employment more attractive for the sake of signalling. Employers’ beliefs are more than just an element of the equilibrium in the model. In case of multiple equilibria a shift in employers’ beliefs can change equilibrium and thus amount of education each type will obtain.

References

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Author Information

Maria Yudkevich

Higher School of Economics

Economics

Moscow

180

Alexander Apokin

Higher School of Economics, Russian Federation

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