The empirical association between schooling and economic success is one of the most secure findings in the social sciences. With rare exceptions, across societies and historical periods those with more schooling or particular types of schooling have held significant material advantages over those with less schooling. While not perfect, the empirical associations between schooling and economic success are high, persistent, and according to many accounts, increasing. Schooling in many societies is now generally regarded as the key to both individual and collective social mobility.
Educational attainment is consistently associated with virtually every standard measure of socioeconomic success. For example, in the United States only a little more than three out of five individuals who have not completed high school are in the labor force. This number rises steadily as educational attainment rises, with nearly nine out of ten college graduates participating in the labor force. Similarly, as educational attainment goes up, unemployment rates unambiguously go down. This does not mean that providing high school dropouts with diplo mas will suddenly provide adequate opportunities for them, but it does mean that when jobs are scarce, the least educated have the least access to them.
The relationship between education and socioeconomic success goes beyond whether or not people are working, to the types of work they do and the rewards associated with that work. Level of schooling is consistently and strongly related to occupational status, worker autonomy, earnings, employment stability, access to learning opportunities at work, and job benefits.
The good life afforded by schooling is not equally accessible to everyone. For example, at all levels of education, African Americans and Hispanics are more likely to be unemployed than are whites. The difference is especially great for African Americans. Further, women earn less than men at all levels of schooling.
Precisely why schooling is such a consistent predictor of economic success is less certain. Human capital theory (Becker 1964; Mincer 1989) maintains that schooling provides marketable skills and abilities relevant to job performance. This makes the more schooled more valuable to employers, thus raising their incomes and their opportunities for securing jobs. In this view, employers act rationally by selecting on educational credentials (although this need not be the only hiring criterion) because schooling has prepared the more educated to be better workers. Similarly, job seekers (in their prior role as students) act rationally by investing in their own human capital.
Credentialism offers a different vision of the association between education and work (Berg 1971; Collins 1979). This view holds that educational credentials are little more than arbitrary and exclusionary means of preserving socioeconomic advantage across generations and socio economic groups. Rather than indicating job skills, credentials are the ways in which gate keepers restrict access to privileged positions. By using such putatively objective indicators of merit as educational credentials, elite classes can reproduce themselves in what appears to be a fair and equitable manner (Bourdieu & Passeron 1974).
Credentialism can refer to two very different processes that may or may not be directly related. For some, credentialism describes credential inflation. This position describes a system of job assignment in which employers demand more and more education for the same work. As evidence, analysts point to a rate of expansion in educational enrollments that is much more rapid than technologically induced growth in the demand for skills. Of course, economies can and do experience skill shortages and skill surpluses at the same time. Credential inflation may well operate in some sectors and not in others.
A second way to think about credentialism is as ”sheepskin effects.” These are usually defined as disproportionate increases in returns to schooling after the completion of a year that usually is associated with a degree (Park 1999: 238). In other words, people are economically rewarded simply for holding a given degree. (One could as easily say that they are economically penalized for not completing a degree.) The difference in earnings between, for example, someone with four years of postsecondary education but no degree and someone with the degree (the sheepskin) is in effect the ”rent” one collects for being credentialed.
Other theories of the relationship between schooling and economic success lie closer to the human capital theory, while incorporating aspects of the skepticism of credentialist theory. These include theories of screening, signaling, and filtering (Bills 2003). While there are important differences between these theories, they are unified by the claim that the importance of schooling is not so much that it enhances ability but rather that it reveals it. Because employers cannot know which potential hires are most likely to be productive, they need to identify and gather trustworthy labor market information (Rosenbaum 2001). Educational credentials provide this information. More able job seekers can thus signal their market value by acquiring educational credentials, which in most societies have attained the status of legitimate indicators of the kinds of ability valued by employers.
Both analysts and policymakers show recur rent concern for overeducation (variously referred to as overqualification, surplus education, or educational mismatch, but rarely, strangely enough, overskilled). The idea behind overeducation is that some workers, usually considered to be a growing number, have more education than is “needed” for the jobs they hold (Halaby 1994). Determining the criteria for how much education is “needed” is far from self-evident, and there is no uniform definition about what counts as overeducation. Some see overeducation subjectively, as workers’ own assessments of the adequacy of their educational backgrounds for the demands of the jobs they hold. Those who see their own credentials as significantly higher than those needed to either secure or perform a job are held to be overeducated. Others measure overeducation more in terms of the objective characteristics of jobs. One might, for example, compare the educational level of a given worker to the educational level of the typical worker in that occupation or to some ”job level requirements” of the occupation. In objective conceptualizations, workers who are significantly more highly educated than other workers in the same occupational category (regardless of their self-assessments) are considered to be overeducated.
The evidence on overeducation and its social, political, and economic consequences is less than definitive. Empirical findings differ quite substantially across societies, and different con ceptualizations of overeducation often produce different results. Most analysts believe that overeducation is both fairly common (sometimes held to be nearly a third of the workforce) and increasing (Green et al. 1999). Others believe there may have been some decline in the incidence of overeducation (Groot & van den Brink 2000). Some data suggest that women are more likely to be overeducated, and men more likely to be undereducated. In general, the returns to overeducation (typically taken as ”years of surplus schooling”) are lower than the returns to ”matched” schooling, but are positive nonetheless.
Theory and research on the relationships between schooling and economic success should continue to develop. The emergence of several integrated efforts to conduct cross-societal comparative studies of social stratification, the development of high quality nationally representative data sets for an increasing number of countries, and solid methodological and conceptual apparatuses provide a solid foundation for further progress.
- Becker, G. S. (1964) Human Capital. National Bureau of Economic Research, New York.
- Berg, I. (1971) Education and Jobs: The Great Training Robbery. Beacon, Boston.
- Bills, D. B. (2003) Credentials, Signals, and Screens: Explaining the Relationship between Schooling and Job Assignment. Review of EducationalResearch 73: 441-45.
- Bourdieu, P. & Passeron, J.-C. (1974) Reproduction in Education, Society and Culture. Sage, BeverlyHills, CA.
- Collins, R. (1979) The Credential Society: An Historical Sociology ofEducation and Stratification. Academic Press, New York.
- Green, F., Mcintosh, S., & Vignoles, A. (1999) “Overeducation” and Skills: Clarifying the Concepts. Unpublished paper, Centre for Economic Performance, London.
- Groot, W. & van den Brink, H. M. (2000) Over-education in the Labor Market: A Meta-Analysis. Economics of Education Review 19: 149-58.
- Halaby, C. N. (1994) Overeducation and Skill Mismatch. Sociology ofEducation 67: 47-59.
- Mincer, J. (1989) Human capital and the Labor Market: A Review of Current Research. Educational Researcher 18 (4): 27-34.
- Park, J. H. (1999) Estimation of Sheepskin Effects Using the Old and the New Measures of Educational Attainment in the Current Population Survey. Economics Letters 62: 237-40.
- Rosenbaum, J. E. (2001) Beyond College For All: Career Paths for the Forgotten Half. Russell Sage Foundation, New York.