Perfect Information and Perverse Incentives: Publish salaries, education availability
The labor market fails due to gaps in information, along with a lack of capability to respond to the information that does flow through the market.
Before reaching adulthood, students are making important decisions about their place in the labor market.
By their later years in schooling, they have typically selected their paths; either directly into the labor market, or into higher education such as university or college. At such a young age, most people are not yet aware what fields they might want to dedicate their life. Furthermore, the labor market conditions, salaries, and future career prospects are not well advertised for each field. Decisions made without this critical information leads to an underclass of graduates who are well educated but underemployed. Those who choose to re-educate themselves in a new field, face long, daunting, and sometimes expensive programs. The labor market takes an exceedingly long time to adjust and fill vacancies, or seeks imported labor.To address this market failure, several policies need to be implemented. First, the government must publish a detailed list of salaries by job, sector, and geographic region, along with trends and prospects. It’s not enough to host this information buried within the websites of national statistics agencies. Hard copies must be distributed to every household, informational boards must be posted in schools, and advertisements must be run with this information. It must also include information about living costs in each region, educational requirements, and where the relevant education can be obtained. Just as the prices for consumer goods are well known to the public, a concerted effort must be made to provide this labor market information. A new Department of Market Information must be tasked with such a job. Only then can people make informed decisions about their education and training. In addition, educational programs should be priced according to this market information, being free for areas, which are most in demand.