EH.Net Abstracts in Economic History

ABSTRACTS IN ECONOMIC HISTORY
(c) 2001 EH.Net
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Name: Claude Diebolt
Email: claude.diebolt at lameta.univ-montp1.fr Institution: CNRS

Co-author: none

Title: La théorie de l'engorgement (The Theory of Glutting)

Internet Address of abstracted work: not available

By mail:
DIEBOLT Claude
8 Route de Montpellier
34160 RESTINCLIERES
France

Language: French

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 [Titze, Windolf, M¸ller-Benedict, Diebolt]. 
Starting from this observation, this article constructs a 
neoclassical glutting theory developed within the framework of a 
partial equilibrium education and labour economics model. It extends 
and generalises the works of Walsh, Becker, Ben-Porath, Arrow, 
Spence, Mincer, and others. Like Freeman's recursive cobweb models, 
the paper is aimed at establishing possible causal relations between 
educational development and the movements of the labour market, or 
rather the labour markets in the plural.

Firstly, we support the hypothesis that 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. In addition, we replace analysis of series of 
occupational earnings by an attraction effect that may appear for 
certain curricula when a shortage occurs in different professional 
sectors. Once the shortage has been made up, the demand ffect 
continues as a result of delay in the perception of the situation by 
young people. This may gradually lead to the 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 pattern modulated according to job availability.

The discussion is in two parts.

1) The theoretical model is presented in the first part. It was 
inspired by an econometric tool originally developed in industrial 
economics and reputed for the quality of its performance in analysing 
the allocation of production resources. This is the transcendental 
logarithmic (translog) function developed by Christensen, Jorgenson 
and Lau.

2) A cliometric application using the case of Prussia is developed in 
the second part. An original triple database was used. This consists 
firstly of the students enrolled in the protestant theology, law, 
medicine and literature faculties and then the corresponding 
professions: pastors, the legal profession, doctors and teachers in 
secondary education. The third part consists of earnings.

Throughout our statistical window (19th and 20th centuries), 
elasticities display a net and gross substitutability effect between 
the different university curricula and the various professions. In 
concrete terms, the effect of the substitutability between two 
faculties H and J, for example, means that the number of students 
enrolled at H moves in the opposite direction to the expected 
earnings in J. Their own positive elasticities were also observed, 
highlighting synchronous movement of numbers (at the universities and 
in the professions) and their respective yields.

We support the hypothesis that such a phenomenon can have at least 
three causes. The first is student behaviour when they choose a 
curriculum; this will be governed by the expected earnings. In 
addition, there may be a substantial demand for young gradates 
because of the aging of the profession. Finally, there may be strong 
demand because of the number of posts to be filled.


Bibliography: Diebolt Claude.  "La théorie de l'engorgement." 
Economie Appliquée. An International Journal of Economic 
Analysis (Les Presses de l'ISMEA), Archives de l'ISMEA (Institut de 
Sciences Mathématiques et Economiques Appliquées), Vol. 54, 
forthcoming. 2001.


Subject: G
Geographical Area: 4
Country/Region: Germany
Time Period: 0

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