The Sheepskin Effect

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The sheepskin effect means someone who quits just short of finishing earns much less than someone who finishes. I think it's an enormous market failure, but why don't people then start companies or for that matter non-profits and hire up the people who almost finished because they would be way under price? But I don't see anyone doing that. Are you doing it? No, there are actually lots of people doing it. That's an arbitrage opportunity for sure. What does Singapore need to do to support more creative talent? Well, we'd get a lot more creativity if you had kind of more diversity of talent.

When looking at the U.S. labor market, Byron Auguste sees too many job seekers screened out based on shallow signals like a bachelor’s degree, and too few ‘screened in’ by directly demonstrating the skills needed for the job at hand. To close those opportunity gaps in the American workforce, Byron co-founded and runs Opportunity@Work, which played a key role in Maryland’s decision in early 2022 to drop four-year degree requirements for thousands of state jobs in favor of recruiting from those identified as being Skilled Through Alternate Routes, or STARs.

He joined Tyler to discuss workforce training in the digital economy, re-evaluating college degree requirements in recruitment, why IQ is overrated and conscientiousness is underrated, the major opportunity gap in on-the-job training, what people miss about the German apprenticeship model, the best novel about finding a job, what’s gone wrong with American men, why we need signal pluralism for higher education admission, why he’s wary of AI for predicting labor outcomes, what happened when Maryland rolled back degree requirements for state jobs, the incentive problems in higher education, and more.

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Recorded September 6th, 2022 Other ways to connect

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