Home > Economic policy > In praise of credentialism

In praise of credentialism

March 1st, 2017

That’s the title of my latest piece in Inside Story. The crucial para

The term “credentialism” is used in many different ways, some of them contradictory, but the implication is consistent: too many young people are getting too much formal education, at too high a level. This implication was spelt out recently by Dean Ashenden, who contends that “education has not just grown to meet the expanding needs of the post-industrial economy, but has exploded like an airbag.” The claim that young people are getting too much education, and the supporting critique of credentialism, is pernicious and false.

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  1. Jim Rose
    March 1st, 2017 at 21:16 | #1

    John, have You seen Bryan Caplan on this and his book coming out this year called The Case Against Education. He argues that that education is mostly signalling.

    He has blog debates against economists including William T Dickens who support the human capital explanation. What is extraordinary is the number of concessions they make to Caplan in the course of arguing that human capital still counts.

    The weakest part of his argument is signalling appears to be the best way of measuring ability because it were profitable to invent cheaper ways, they would be invented by now.

    I studied at Japanese universities. Everyone gets an A. If a professor fails a student, you must explain to the faculty why you are such a bad teacher because the student did not pass. It is not the student’s fault they failed. Their professor failed to inspire them to work harder.

    attending different Japanese universities has a signal value because to get into the top universities you have to pass a really tough entrance test.

    Students do even less study in their 3rd year at Japanese universities because they are preparing for really tough employer entrance tests. Employers know that university marks of worthless.

  2. Ikonoclast
    March 2nd, 2017 at 06:30 | #2

    @Jim Rose

    I’m tempted to make a joke and I will give in to temptation. Japanese university students study less because they have been hot-housed from about age two by their tiger mums, tiger kindergartens and tiger elementary schools. By the time the poor little blighters reach university they are already fully educated in STEM subjects. There is nothing more the unis can teach them (unless it is the much despised humanities education). Remember, I did say I was joking. 😉

  3. Greg McKenzie
    March 2nd, 2017 at 07:15 | #3

    I can only contribute a frivilious aside here because I agree with all the above comments and have nothing worthwhile to contribute. I am, of course, away of my humourous intent.
    When a first year undergraduate had a meeting with her tutor, at one of the prestigious Oxford university colleges, Shenasked her tutor about how many lectures she should attend.
    The tutor looked with scorn on her question before replying:
    “I presume you can read. In which case, I fail to see why you need to attend any.”
    Advice I wish that I had been given during my microeconomics year at UNSW.

  4. Tom Davies
    March 2nd, 2017 at 10:09 | #4

    I agree that passing any degree is sufficient to show that you have the skills for an office admin job, but I don’t think a degree is necessary — there must be many people who can’t/don’t want to spend three years doing a degree that doesn’t interest them, just to prove that they have some practical skills.

    Is there a vocational education option for such people, that teaches specific written communication and basic IT skills in, say, 12 months?

  5. March 2nd, 2017 at 10:33 | #5

    As someone who can remember Illich, his claim was in part, that universities weren’t for teaching but for guaranteeing that the children of the rich would have a head start at the best jobs – a replacement for a peerage, in the first iteration, or the old school tie, in the second. Universities certainly had other effects, but that was, at the most basic level, what they were for, and the other effects were essentially epiphenomena.

  6. March 2nd, 2017 at 11:05 | #6

    An anecdote from the time of the first Gulf War. Before this, Iraqi officers had visited USAF bases on exchange programmes. They could not believe that the sergeants running say the engine maintenance shop could take million-dollar decisions on replacement of engines on their own authority.

  7. John Quiggin
    March 2nd, 2017 at 11:33 | #7

    @Tom Davies

    Sure, there are plenty of TAFE courses like this, at certificate level, diploma level, or offering a transition to university.

    https://www.tafesa.edu.au/courses/information-technology

    But “I think” and reliance on anecdotes are no more reliable as guides here than in assessing climate science.

  8. John Quiggin
    March 2nd, 2017 at 11:37 | #8

    @ChrisB

    That claim is certainly common, but sounds rather unlike Illich to me. After all, on that story, greatly expanding student numbers would undermine the filtering effect, as indeed has happened to a significant degree.

  9. John Quiggin
    March 2nd, 2017 at 11:42 | #9

    @Jim Rose

    I’ve replied to the signalling argument here, and would argue that the opposite is true (that is, it’s harder to signal acquisition of learning than native ability). To make the obvious point, we do have a much cheaper signal, highly correlated with university results, namely university entry scores. If you get a top percentile entry into university, you’re almost certain to do well unless you have some sort of personal crisis. And since personal crises are stochastic events, completing university successfully is no guarantee that you won’t have one on the job,

    So, if signalling were the issue, employers could just hire on the basis of high school results.

  10. Jim
    March 2nd, 2017 at 11:50 | #10

    I suspect the truth on credentialism is probably somewhere between what you have argued and what some of the other commentators do, particularly in some areas.

    I think it is particularly the case for white collar jobs that have been incrasingly filled by graduates in recent years (think banking, insurance, HR, finance). These jobs are process driven, while the actual technical requirements are primarily automated (unlike 20 years ago when I had to discount forward exchange contracts for exporters using my Casio FX 82, and all without the luxury of university training).

    You use an example that filing clerks etc may need a higher qualification because they manage databases etc. But you actually learn those skills at high school now. My child in high school has better skills in Access, Excel (including writing macros) and Word than most recent graduates. Kids are learning programming using the same language that is used for many applications in robotics and gaming. Furthermore, the foundations of good writing are established in high school. There is little difference in the writing skills between a recent graduate and a high school leaver that would have gained entry to the same course.

    I guess my point is that the ‘generic’ analytical skills required for most white collar jobs don’t need a university education and there is likely to be credentialism at play. A good high school education is enough, and may actually be preferable. And I suspect the credentialism is reinforced by employers that have a 1980s or 1990s view of what a high school graduate can actually do.

    For many, the value of a degree really is a bit more life experience, demonstration that you can see something through, a means to make it through the first 90 seconds of a shortlisting process for some jobs, and a signal you need to work to pay of your student debt.

  11. Smith
    March 2nd, 2017 at 12:29 | #11

    @John Quiggin

    You might be surprised how mant graduates, and even graduates with several years working experience, put their high school results on their CVs, presumably because they think that employers will take these into account in deciding whether to employ them.

  12. John Quiggin
    March 2nd, 2017 at 13:05 | #12

    @Smith

    I try not to be surprised by anything people do, but I long ago reached the conclusion that the opposite strategy is correct. If I were three years out of uni, I wouldn’t bother reporting my university grades in any detail, let alone high school. Considered purely as credentials (and excluding the formally credentialled professions), school and uni qualifications are single use. Your high school grades matter for university entrance and never again, university grades matter for your first real job or grad school entry and never again, and so on. ‘

    What matters is what you learned, explicitly or tacitly along the way. Because this is very hard to test, a university degree is less useful as a signal than is generally assumed.

  13. John Quiggin
    March 2nd, 2017 at 13:11 | #13

    “My child in high school has better skills in Access, Excel (including writing macros) and Word than most recent graduates”

    Let’s think this through. These applications were well-established 20 years ago, when today’s recent graduates were in kindergarten. So, what has changed in the educational system, that your child has learned this stuff in high school, while they didn’t?

    In fact, as it happens, I’m the father of a relatively recent graduate, so I can match anecdotal evidence for anecdotal evidence. My son learned bits and pieces of Excel in High School, but not nearly enough to become proficient. He used it a lot at University, and can now write good VBA code.

  14. Ernestine Gross
    March 2nd, 2017 at 13:33 | #14

    JQ, I have enough problems with ism words as it is and now you write an article on ‘In praise of credentialism’.

    What you call ‘formal credentialism’ I would call qualifications. There may be many types and varying over time.

    Credentials are not necessarily associated with education at all. For example, a billionaire’s off-spring has the right credentials for a bank loan, if the parent acts as a guarantor and the off-spring is of legal age, irrespective of educational achievements.

    To me, credentialsim means a state of a society which, in the limit, requires a document verifying that the holder of the document can do up their shoe laces (or walk without risk of injury with thongs, etc, etc). It goes well with managerialism, corporatism, ….. but not with thinking people, who are educated to the level of their ability and in areas of specialisations where they feel comfortable within the context of the society they live in.

  15. HED PE
    March 2nd, 2017 at 13:53 | #15

    I like the idea of an extended period of education that improves critical thinking skills, knowledge of diverse peoples, history, values, philosophy and so on and if such an education can make folk more liberal and prone to empathy that is great. But I’m not convinced that credentialism is not a problem and I disagree with some of John’s comments. Here is one example:

    In most offices, a high school graduate requiring training would be a liability rather than an asset.

    I worked for 15 years assessing workers’ comp claims. It usually took at least three or four years for a new employee to get across the legislation, the case law, the payroll system etc so they could work as completely independent case officers, but in that job and every other office job I’ve worked in it took no more than a couple hours to instruct a new starter so they could do some of the more routine tasks. Most young folk are at least moderately computer literate and can use packages like Microsoft Office without any instructions.

    My partner has an absurd number of siblings (10!) and almost half my superabundant nieces and nephews who have a uni degree have simply wasted their time and ended up with a big debt. Do you really need a degree in the Life Sciences to be a checkout chick in a big box pharmacy or an Arts degree to wash dishes? That’s what I am seeing.

    I think this AFR article is much closer to the mark:

    Overall, Mr Norton said the graduate job market remained over-supplied with too many graduates chasing too few entry-level positions.

    The demand-driven university system leading to “a dramatic increase in the number of bachelor degree completions each year,” he said.

    “At the same time we have had an absolute decline in the number of full-time jobs that recent graduates have achieved.”

    The sheer number of job-seekers has meant employers are flooded with applications for graduate positions, said fellow panellist Katea Gidley, the director of career management consultancy Raw Talent.

    “The graduate recruitment process is really broken,” Ms Gidley said.

    As I see it, we have far too many folk chasing too few job vacancies. Education can’t solve that and what is effectively happening is that kids are being put on ice for 3 to 6 years (increasingly the latter) in higher education as a way to deal with insufficient jobs.

    So I’m seeing credentialism as being at least in part a subset of a much bigger problem, which too few jobs to the meet the demand.

    I also have to wonder why I needed to pay a plumber $200 for 10 minute’s work to replace the main regulator for my home’s gas bottles when the gas bottle supplier could have done for $100 if the law let him!

  16. Smith
    March 2nd, 2017 at 14:25 | #16

    @John Quiggin

    When Jim Spigelman was appointed Chief Justice of NSW in 1998 by the Carr government, the shadow attorney general said he supported the appointment because Spigelman won the university medal in law – in 1971.

    Perhaps credentials should not matter. But they do.

  17. derrida derider
    March 2nd, 2017 at 14:30 | #17

    Some people here really should take to heart Paul Krugman’s line about “your gut feel does not trump my econometrics”.

    Whether a uni education raises productivity (& hence income) or merely signals it (the credentialling or “screening” hypothesis) has been a subject of pretty intense and sophisticated empiric study for over 40 years now. The short answer is a bit of both, but mostly the former.

    The consequence is that calculated social rates of return to such education are only a bit lower than the calculated private rates of return (that’s why, as John will know, I’m for free uni education – the government gets its investment expenditure back in extra income tax anyway). If it was mostly screening the social rate of return would be much lower.

    As the “gut feel” of most of those originally studying the question was strongly for screening, this actually can be seen as an example of good science – the economists’ theory said one thing, the data another, and the data prevailed.

  18. John Quiggin
    March 2nd, 2017 at 14:34 | #18

    @Smith

    That’s interesting. I also got a University medal; in fact, I still have the thing somewhere. In 40 years, I don’t think anyone has ever mentioned the fact, let alone suggested that it would justify employing me.

    @derrida derider

    Thanks, DD. Credentialism seems to be an idea, like generational cliches, that is impervious to evidence.

  19. Ikonoclast
    March 2nd, 2017 at 14:34 | #19

    @Ernestine Gross

    You have problems with “ism” words but “tion” words are okay? 😉

  20. HED PE
    March 2nd, 2017 at 14:59 | #20

    @derrida derider

    “Whether a uni education raises productivity (& hence income) or merely signals it (the credentialling or “screening” hypothesis) has been a subject of pretty intense and sophisticated empiric study for over 40 years now. The short answer is a bit of both, but mostly the former.”

    That sounds about right to me overall, although I couldn’t help but note how many of my fellow office workers had archaic degrees in fine arts, history, dramatic arts and archaeology while my own social science degree wasn’t worth tuppence. It was kinda like the Boulevard of Broken Dreams …

  21. Smith
    March 2nd, 2017 at 15:00 | #21

    @John Quiggin

    Let’s assume that all undergraduate education in economics in Queensland is pretty much the same. If a school leaver were to ask you whether they should go to the prestigious UQ to study economics, or a lesser ranked university, your answer will presumably be it doesn’t make any difference (abstracting from the aesthetics of different campuses, extra curricular facilities, travel times etc).

  22. John Goss
    March 2nd, 2017 at 16:22 | #22

    I noticed the fact that you had won the University medal John, and at the time I read it I thought, well that strengthens my prior that Quiggin is a smart bugger. So such things do change perceptions.

  23. March 2nd, 2017 at 20:52 | #23

    I read somewhere that what employers are looking for is someone who is nice, intelligent and conscientious. Formal credentials reduce risk over an area of job-specific knowledge that doesn’t mean all that much in.most cases. Degrees have some signalling value on intelligent and conscientious, but only a little

  24. March 2nd, 2017 at 20:55 | #24

    I read somewhere that what employers are looking for is someone who is nice, intelligent and conscientious. Formal credentials reduce risk over an area of job-specific knowledge that doesn’t mean all that much in most cases. Degrees have some signalling value on intelligent and conscientious, but only a little: perhaps they prove a minimum.

  25. Ikonoclast
    March 3rd, 2017 at 05:55 | #25

    @James Wimberley

    Going by the empirical evidence, employers are looking for someone they can exploit by paying extremely low, often illegally low, wages to and place in insecure, temporary work with unfair and unsafe conditions. That is the way the whole system is trending. That is the way the LNP “stooges for capitalist power” want it to trend. They support that trend every day in Parliament.

  26. March 3rd, 2017 at 08:57 | #26

    Back in the day they saw these things differently. Oscar Wilde’s tombstone, for example, reads
    Oscar Wilde, author of Salome and other beautiful works, was born at Westland Row, Dublin, in October 1854. He was educated at Porton Royal School, Esk, and Trinity College Dublin, where he obtained a scholarship and won the Berkeley Gold Medal for Greek in 1874. Sometime Demy of Magdalen College Oxford, he gained a first-class degree in Classical Moderations in 1876, a first class degree in Literae Humanitores, and the Newdigate Prize for English Vere in 1878. He died fortified by the sacraments of the church on November 30, 1900, at the Hotel d’Alsace.
    That’s seven words for the works and 57 for the education, including two medals. have you written your epitaph yet, John? If you do it on this model you can have it cut now and will only have to leave your heirs with the task of filling in the final date.

  27. Jim
    March 3rd, 2017 at 14:16 | #27

    @John Quiggin “So, what has changed in the educational system, that your child has learned this stuff in high school, while they didn’t?”

    I suspect it is the fact that while kids were exposed to this stuff 10 years ago, now it is embedded into the day-to-day of high school life.

    By the time my child finishes high school, he would have had his own laptop for 7 years (including using the key programs required of most non-specialist white collar jobs) and would have been leaning programming for six years. That is not unusual for many high schools. But I’m sure it would have been pretty unusual even 5 years ago.

  28. HED PE
    March 3rd, 2017 at 15:42 | #28

    Going by the empirical evidence, employers are looking for someone they can exploit by paying extremely low, often illegally low, wages to and place in insecure, temporary work with unfair and unsafe conditions.

    I can’t say I was surprised by the 7-11 worker exploitation revelations. I know numerous folk who get paid less than the award rate and/or do not get paid superannuation. The employers themselves would argue that their competitors do the same and they’d go bust if they paid full entitlements.

  29. John Quiggin
    March 3rd, 2017 at 16:28 | #29

    @Jim

    This still doesn’t work. Recent graduates have also had their own laptops and have been using them for the same purposes.

    Turning more directly to evidence that can be observed at a university, your claim would imply that first-years (recent high school grads) should have better computer skills than PhD students (recent uni graduates). I don’t find this to be the case at all.

  30. Ikonoclast
    March 3rd, 2017 at 17:00 | #30

    @HED PE

    A few thoughts here, although I am going off topic.

    If everyone pays very poor wages (say below what would be called a “living wage”) then (a) workers cannot live in the long term without supplementary welfare and (b) since wages spent are someone else’s income then low wages lead to low consumption (lack of demand) and the whole economy spirals into recession. It’s Econ 101.

  31. Ron E Joggles
    March 3rd, 2017 at 17:33 | #31

    “A PhD is no substitute for native intellect.”

    The frequency with which graduates misinterpret this meme is evidence of its truth.

  32. Jim Rose
    March 4th, 2017 at 14:51 | #32

    @John Quiggin

    I regard that article as your best. Whenever I am dealing with the signalling literature, I always began back to that one from 1995.

  33. Vegetarian
    March 4th, 2017 at 15:40 | #33

    As someone with an MA, I regard higher education as a valuable enrichment in life.
    But as an MA, circumstances forced me to spend a large part of my career in secondary schools. Believe me, huge numbers of youngsters have neither the interest nor the aptitude for higher education. What should be their career future?

  34. Greg McKenzie
    March 5th, 2017 at 07:51 | #34

    I taught in high schools for 31 years and found many students with the interest and aptitude for higher education! What depressed me was what they did with their qualifications. I taught Economics and Business Studies. My ex-students who got high marks in Business Studies, with one notable exception (he became one of Australia’s most well known comedians), went into marketing for the money. My ex-students who got high HSC marks in Economics and then got first class honours degrees went into the finance industry, again for the money. So sad.
    By the way I actually did programming at UNSW and what they learn in high schools is not programming its software applications. The RAM studies and the ROM studies needed to be a real programmer are now the most sort after university skills. They are essential for Cyber security.

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