Credentialism and the Proliferation of Fake Degrees: The Employer Pretends to Need a Degree; The Employee Pretends to Have One

Abstract:     
A report from the U.S. General Accounting Office recently exposed 463 federal employees with degrees from schools believed to be "diploma mills" - sham schools that sell college degrees to individuals who complete little or no academic work to earn them. This report, along with other investigative work, confirmed the claims of diploma mill operators: their "graduates" have well-paying jobs in all levels of both the public and private sectors, and employers have subsidized the purchase of fake degrees via tuition reimbursement programs. For a growing number of positions, employers prefer college students and graduates over workers with only high school diplomas, even when a college education is not necessary for competent job performance. As a result, employers are partially responsible for the fake degree demand through the practice of credentialism - overly relying on degrees as proof of job competency. Faced with a diminishing pool of well-paying jobs and fearing their employers are unfairly holding them back, some workers pretend to have earned degrees, purchasing them to obtain coveted jobs or promotions. This article posits that by relying on higher education credentials as proof of competency when filling low-to-moderate-skill positions, employers risk violating Title VII of the Civil Rights Act to the extent that such credentials are not a business necessity and job-related and such reliance has a disparate impact on groups protected by the Act. To deter the demand for fake degrees, this article explores several solutions, including recommending that employers adopt effective testing procedures to find competent workers. To encourage the attainment of legitimate degrees, employers can cultivate partnerships with community colleges to allow workers to acquire relevant skills through two-year degree programs. Furthermore, government initiatives such as work-study programs and tax incentives can help persons without degrees obtain entry-level positions and concurrently pursue legitimate postsecondary education.

Keywords: human capital, screening, signaling, control theory

JEL Classifications: I20, I21, I28, J24, J78, K20

Accepted Paper Series