Education and work in the 21st century: credential inflation or transformation?

This paper will analyze data from the U.S. [Programme of International Assessment of Adult Competencies] PIAAC Main Study, the Adult Literacy and Life Skills Survey (ALL), and the International Adult Literacy Skills Survey (IALS) to test two competing paradigms in educational and social science research: credential inflation (the idea that degrees are becoming more costly and less valuable in the labor market); and educational transformation (the idea that education is not becoming less valuable, but rather that education, skills, and work are evolving in the knowledge economy). The analysis will be guided by a series of related questions: (1) Is there any relationship between years of education and employment status and type of employment (supervisory duties and job tasks) over time? (2) Are respondents with similar levels of education likely to work similar numbers of hours per week (testing for underemployment) over time? (3) Do respondents with similar levels of education tend to have similar earnings over time (after adjusting for inflation)? (4) Were years of education or literacy skills better predictors of labor market outcomes in 2012 than 2003 or 1994? Based on preliminary results, we find that education and skills often had independent, but significant effects related to labor market outcomes (employment, job tasks, and earnings).

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