Amusing Ourselves to Death? Education and Work Under Digital Influence

Abstract

We study individual decisions about educational pursuit, influence acquisition, and economic production, in the presence of increasingly ubiquitous digital (social) media that are purely entertaining. Education traditionally not only imparts knowledge, but also determines initial labor market placements. The rise of the influencer economy via digital platforms alters individual attention and effort allocation, and consequently the relative returns across occupations and overall resource allocation in the society. Technologies that augment entertainment surplus (e.g., improved matching and amplified outreach) can discourage or even break down education. Education pursuits exhibit complementarity in the presence of a sizable influencer economy, resulting in multiple equilibria including one featuring inefficiently low education. Education and occupational choices exhibit generally non-monotonic dependence on labor market search frictions and digital influence technologies. Digital influence becomes ``anti-intellectual'' because it crowds out not only people's attention but also education and productive occupational choices, especially when societal decisions and public goods provision rely on an individual's logic and scientific understanding. Surprisingly, regulations directly targeting influencers or reducing search friction in the labor market may backfire, but taxing both influencers and followers helps. Interventions to coordinate equilibria and adjust platform designs can also mitigate inefficiency. 

Keywords: Creator/Influencer Economy, Digital Addiction, Digital Platforms, Disinformation, Occupation Choice, Returns to Education, Social Media