The "Educated Unemployment" Driven By The Expansion Of Higher Education

With the growing size of higher education and the increasing number of graduates, the problem of"educated unemployment"gradually becomes apparent. This paper uses the theory about"lemon market"to explore the reasons of"educated unemployment", which is under the background of increased enrollment of higher education. The direct result of increased enrollment of higher education is the growing number of graduate. As a result, the number of job-seekers which hold the same diploma continues to increase. Under the original scale of education, academic diploma could be used to transfer signal between employers and job seekers, thus it played the function of removing information asymmetry. But when the number of job seekers which hold the same academic diploma becomes great, the signal function of diploma will inevitably tends to weaken. With a result, information asymmetry between employers and job-seekers will be enhanced.On this basis, the paper established a"Lemon market"model about graduate employment market. Through the analysis of the relevant variables, we can see the understanding about quality and efficiency of job-seekers is different between employers and employees. Especially in the background of diploma signal depreciation resulted from increased enrollment of higher education, this difference becomes obvious. In order to reduce the employment risk resulted from information asymmetries, employers will drop the employment preference of graduates by reducing wages. But the more efficient graduates will not accept the adjustment of wages programmes. As a result, the phenomenon of voluntary unemployment will be apparent. Accordingly, the equilibrium interval of employment will be reduced, the equilibrium price will fall. That is, it tends to form the employment equilibrium of low prices resulted from the different evaluation about the quality of job-seekers. When only low-efficiency job-seekers accept this adjustment of wages programmes, employers will find their expected level about the overall quality of graduates is too high. They will further drop the employment preference, which will"crowd out"a number of high-efficiency graduates. It does so repeatedly, the phenomenon of adverse selection which is similar to"lemon market"will appear. If the graduates can realize diploma signal depreciation and increased competition of employment, and consciously reduce to the evaluation level of quality and efficiency and drop employment expeaction, then the employment balanced range will be expanded, the problem of adverse selection will be mitigation, and employment agreement will be more easily reached. Model also shows that if the more efficient graduates further to"separate"themselves by choosing to obtain a stronger diploma signal, both job-seekers'subjective evaluation about the their own of quality and employers'employment preference will be improved. But the variation of employment equilibrium range is uncertain, and it depends on the range of these two"increase". However, if they obtain higher education is only to"prove"themselves rather than to satisfy the actual needs of the workplace, which will appear that the post-graduate students are engaged in undergraduates'jobs and undergraduates are engaged in the college students'jobs. Obviously, this is the phenomenon of"positions exclusion". Hidden"educated unemployment"will appear. The basic conclusion is: Diploma signal depreciation resulted from expansion of higher education makes graduates employment market show characteristics of"lemon market", to a certain extent. That is, it tends to form the employment equilibrium of low prices in the employment market which is information asymmetry. It may be theoretical explanation about"educated unemployment".