The Economics of Fake Degrees

It's the knowledge era. We eat what we know. Smart is cool. The most attractive companies to work for, especially in tech, are the most elitist when it comes to validating the quality of one's intellectual attainments.

So the incentives to demonstrating those achievements have never been more worth the effort - or the risk.

Yes, as the following article explains, as many as half of the Ph.D.s granted in any given year may be fake. Which is not to say they weren't properly acquired - after all, most aren't stolen or forged - no, most of them were purchased fair and square. It's just that the institutions doing the granting dont really have courses - or professors - or the charters permitting them to issue such credentials. But the benefits of the fees charged to grant diplomas appear to exceed the fines or approbrium heaped on the offender. Which is an interesting commentary on the socio-economic need for an intermediary to guarantee one's competency. There ought to be an app for that. JL

Scott McLemee reports in Slate:

“More than half of all people claiming a new Ph.D. have a fake degree.”

It’s surprising how many house pets hold advanced degrees. Last year a dog received his MBA from the American University of London, a non-accredited distance-learning institution. It feels as if I should add “not to be confused with the American University in London,” but getting people to confuse them seems like a pretty basic feature of the whole AUOL marketing strategy.

The dog, identified as “Peter Smith” on his diploma, goes by Pete. He was granted his degree on the basis of “previous experiential learning,” along with payment of 4,500 pounds ($7,723). The funds were provided by a BBC news program, which also helped Pete fill out the paperwork. The American University of London required that Pete submit evidence of his qualifications as well as a photograph. The applicant submitted neither, as the BBC website explains, “since the qualifications did not exist and the applicant was a dog.”

The program found hundreds of people listing AUOL degrees in their profiles on social networking sites, including “a senior nuclear industry executive who was in charge of selling a new generation of reactors in the UK.” (For more examples of suspiciously credentialed dogs and cats, see this list.)

Inside Higher Ed reports on diploma mills and fake degrees from time to time but can’t possibly cover every revelation that some professor or state official has a bogus degree, or that a “university” turns out to be run by a convicted felon from his prison cell. Even a blog dedicated to the topic, Diploma Mill News, links to just a fraction of the stories out there. Keeping up with every case is just too much; nobody has that much Schadenfreude in him.

By contrast, scholarly work on the topic of counterfeit credentials has appeared at a glacial pace. Allen Ezell and John Bear’s exposé Degree Mills: The Billion-dollar Industry That Has Sold Over a Million Fake Diplomas, first published by Prometheus Books in 2005 and updated in 2012, points out that academic research on the phenomenon is conspicuously lacking, despite the scale of the problem. (Ezell headed up the FBI’s “Dipscam” investigation of diploma mills that ran from 1980 through 1991.)

Forty thousand legitimate Ph.D.s are awarded annually in the U.S.—while 50,000 spurious Ph.D.s are purchased here.

The one notable exception to that blind spot is the history of medical quackery, which enjoyed its golden age in the United States during the late 19^th and early 20^th centuries. Thousands of dubious practitioners throughout the U.S. got their degrees from correspondence course or fly-by-night medical schools. The fight to put both the quacks and the quack academies out of business reached its peak during the 1920s and ’30s, under the tireless leadership of Morris Fishbein, editor of the Journal of the American Medical Association.

H.L. Mencken was not persuaded that getting rid of medical charlatans was such a good idea. “As the old-time family doctor dies out in the country towns,” he wrote in a newspaper column from 1924, “with no competent successor willing to take over his dismal business, he is followed by some hearty blacksmith or ice-wagon driver, turned into a chiropractor in six months, often by correspondence. ... It eases and soothes me to see [the quacks] so prosperous, for they counteract the evil work of the so-called science of public hygiene, which now seeks to make imbeciles immortal.” (On the other hand, he did point out quacks worth pursuing to Fishbein.)

The pioneering scholar of American medical shadiness was James Harvey Young, an emeritus professor of history at Emory University when he died in 2006, who first published on the subject in the early 1950s. Princeton University Press is reissuing American Health Quackery: Collected Essays of James Harvey Young in paperback this month. But while patent medicines and dubious treatments are now routinely discussed in books and papers on medical history, very little research has appeared on the institutions—or businesses, if you prefer—that sold credentials to the snake-oil merchants of yesteryear.

There are plenty still around, incidentally. In Degree Mills, Ezell and Bear cite a congressional committee’s estimate from 1986 that there were more than 5,000 fake doctors practicing in the U.S. The figure must be several times that by now.

The demand for fraudulent diplomas comes from a much wider range of aspiring professionals now than in the patent-medicine era—as the example of Pete, the canine MBA, may suggest. The most general social-scientific study of the problem seems to be “An Introduction to the Economics of Fake Degrees,” published in the Journal of Economic Issues in 2008.

The authors—Gilles Grolleau, Tarik Lakhal, and Naoufel Mzoughi—are French economists who do what they can with the available pool of data, which is neither wide nor deep. “While the problem of diploma mills and fake degrees is acknowledged to be serious,” they write, “it is difficult to estimate their full impact because it is an illegal activity and there is an obvious lack of data and rigorous studies. Several official investigations point to the magnitude and implications of this dubious activity. These investigations appear to underestimate the expanding scale and dimensions of this multimillion-dollar industry.”

Grolleau, et al. distinguish between counterfeit degrees (fabricated documents not actually issued by the institutions the holder thereby claims to have attended) and “degrees from bogus universities, sold outright and that can require some academic work but significantly less than comparable, legitimate accredited programs.” The latter institutions, also known as diploma mills, are sometimes backed up by equally dubious accreditation “agencies.” A table in the paper indicates that more than 200 such “accreditation mills” (defined as agencies not recognized by either the Council for Higher Education Accreditation or the U.S. Department of Education) were operating as of 2004.

The authors work out the various costs, benefits, and risk factors involved in the fake-degree market, but the effort seems very provisional, not to say pointless, in the absence of solid data. They write that “fake degrees allow their holders to ‘free ride’ on the rights and benefits normally tied to legitimate degrees, without the normal investment of human capital,” which may be less of a tautology than “A=A” but not by much.

The fake-degree consumer’s investment “costs” include the price demanded by the vendor but also “other ‘costs,’ such as … the fear of being discovered and stigmatized.” I suppose so, but it’s hardly the sort of expense that can be monetized. By contrast, the cost to legitimate higher-education institutions for “protecting their intellectual property rights by conducting investigations and mounting litigation against fakers” might be more readily quantified, at least in principle. 

The authors state, sensibly enough: “The resources allocated to decrease the number of fake degrees should be set equal to the pecuniary value of the marginal social damage caused by the existence of the fakes, at the point of the optimal level of fakes.” But then they point to “the difficulty in measuring the value of the damage and the cost of eliminating it completely.”

So: If we had some data about the problem, we could figure out how much of a problem it is, but we don’t—and that, too, is a problem.

Still, the paper is a reminder that empirical research on the whole scurvy topic would be of value—especially when you consider that in the United States, according to one study, “at least 3 percent of all doctorate degrees in occupational safety and health and related areas” are bogus. Also keep in mind Ezell Bear’s estimate in Degree Mills that 40,000 to 45,000 legitimate Ph.D.s are awarded annually in the U.S.—while 50,000 spurious Ph.D.s are purchased here.

“In other words,” they write, “more than half of all people claiming a new Ph.D. have a fake degree.” And so I have decided not to make matters worse by purchasing one for my calico cat, despite “significant experiential learning” from her studies in ornithology.