How the free-rider problem affects youth employability

How the free-rider problem affects youth employability

Syeda Tasfia Tasneem | February 20, 2020

In economics, the free-rider problem is referred to a market failure which is often associated with public goods. It occurs when someone benefits from the consumption of a shared resource or privilege without having to pay a fair share for it. Let’s look at the classic example of streetlights. Suppose a locality is considering installing an additional streetlight which has a certain cost. Once built, everyone on the street would have full access to the light and thereby receive equal benefits from its consumption. Even the people who refuse to pay for the light would enjoy its benefits. On the other hand, the additional resource cost of a new member on the street consuming the light is zero.

Similarly, consider the mundane task of cleaning a common area inside a house such as the living room. Now, imagine having a roommate who claims to be unaffected by tidiness and thereby leaves the entire strenuous task of cleaning on your shoulders. However, no matter how hard you try, there is no way you can fully prevent your selfish roommate from enjoying the comfort of the clean room.

What this means in economics is that these goods being consumed are both non-excludable and non-rivalrous. In other words, the free rider gets a good slice of the pie without having to pay for it and there is no way to deny them their share.

If you are a high-school or college student, trapped in a group task with lazy members, this phenomenon might sound familiar to you. Oftentimes, we come across at least one member in every group assignment who skilfully glides past the workload without putting in a single ounce of effort. Since the nature of these assignments requires teachers to award equal grades to all members of a group, the “slackers” receive full credit for the work they had no contribution in. These assignments contribute significantly to the grades we receive on each course and consequently to the highly prestigious degree that we like to flaunt after graduation.

Several studies around the globe have confirmed that employers are increasingly rating “group work” as one of the most important criteria in the recruitment process. Therefore, college curriculums focus a great deal on team-building skills but they often fail to achieve the desired outcomes because of the situation described above. Sadly, the free-rider problem is not limited to just group tasks. Every now and then, we find that one person in the class who turns in someone else’s work as their own. Thanks to plagiarism-checker software, students have at least improved on their paraphrasing skills. But this also puts a question mark on the quality of our degree. What knowledge is derived from completing courses that have allowed us to reap the benefits of somebody else’s hard work? What kind of workforce are these beneficiaries capable of creating?

In a recent study by the Centre for Development and Employment Research (CDER), it was found that youth unemployment in Bangladesh has most severely affected the highly educated group of the workforce. According to the labour force survey (2016-17) of Bangladesh, 29.8 percent of people with a secondary-level education and 13.4 percent with a tertiary-level education were unemployed. A similar survey by Bangladesh Institute of Development Studies (BIDS) reported the unemployment rate for graduates with a university degree to be 38.6 percent. Even though unemployment for the highly educated is currently a common phenomenon worldwide, it is an alarming issue for a country like Bangladesh where jobs have been growing by only around one-eighth of the rate at which the economy has been growing.

Surprisingly, it is also common knowledge that employers in most of the large organisations of the country, particularly in the RMG sector, prefer to recruit foreigners for the top managerial positions of their companies. This dependency on foreign workers is an indication of the inability of our highly educated youth in fulfilling workplace roles. There is overwhelming evidence that our fresh graduates often fail to exhibit the skills or training they are expected to have by virtue of their educational degrees.

Furthermore, as remittance is one of the key drivers of our growth, Bangladesh also needs to focus on the quality of the workforce it exports to foreign countries. Even though Bangladesh was ranked as the top 9th remittance-receiving country globally and the third among South Asian countries in the World Bank Group’s Migrants and Remittances Report (2018), we are far behind the Philippines, India, Sri Lanka and Pakistan in terms of sending skilled workers abroad. Out of the workers who have been sending remittance to the country since 1976, only 33 percent were skilled. These workers face various problems in foreign countries and earn low wages owing to their lack of skills and inadequate training.

Even though much is discussed about the problem of unemployment in our country and the failure of our educational institutions and policies, very little attention is given to the declining work ethic of our students and workers. The free-rider problem is real and it undermines, and imposes a threat to, the quality of education being delivered in our universities. It is high time we stopped blaming our educational institutions for everything that is wrong and started taking responsibility for lacking the required skills because of our unethical practices and half-hearted dedication to learn as we graduate.

 

Syeda Tasfia Tasneem is a student of economics at BRAC University.

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