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On the Relation between Education and Success on the Labor Market

3/3/2021

In his LIfBi Lecture in early February, Prof. Dr. Rolf van der Velden, long-time director of the Research Centre for Education and the Labor Market (ROA) Maastricht, presented a chapter for a newly planned book. Titled "It's the skills, stupid!" he discussed how education and individual labor market success are linked and what mechanisms are at work.

 

Van der Velden examined various theories on the role of education: theories on social closure, theories of education as a positional good, and theories on education as a basis for productive skills and knowledge. He made clear that, for example, Market Power Theory as well as Reproduction Theory can provide initial explanations of how education affects labor market success through social closure. According to these approaches, education is used, amongst other things, to socially regulate access to higher status positions. However, according to van der Velden, these approaches result in various problems, both theoretically and empirically, so that they can be considered rather unsuitable to be the only or dominant mechanism.

Therefore, theories that consider education as a positional good might be more promising to explain the relation between education and the individual success on the labor market. In particular, these approaches emphasize that education is used as a proxy for the individual's assessment of general skills and learning ability and thus determines an individual's position in the labor market. Here, van der Velden cited Screening Theories and Labor Queue Theory. Van der Velden described this approach as a strong one that works in many contexts and for many countries. But, for example, the effects of vocational training and specialization on earnings and labor market success cannot be satisfactorily explained by these theories.

Prof. Dr. Rolf van der Velden at his LIfBi Lecture

The shortcomings in the named approaches lead van der Velden to believe that the best and most convincing arguments therefore tend to come from approaches that relate the importance of education to the development of relevant skills and knowledge in particular (e.g., Skill Formation Theory or Human Capital theory). He justifies this primarily by arguing that these theories allow skills and acquired knowledge to be theoretically and empirically related to individual labor market success. Even though other questions, such as which knowledge and which skills are really significant and how they can be assessed, remain unresolved, these approaches promise better explanatory power than other theories.

However, this leads science to the challenge of investigating the emergence of relevant skills and knowledge and making them measurable. For further research, this means, first, that a multidisciplinary approach is needed to find out how skills and knowledge are acquired. Here, van der Velden advocates greater consideration of findings from neuropsychology. For example, biological factors condition the acquisition but also the loss of skills, and the acquisition of certain skills is strongly age-dependent – here van der Velden cites the ability to plan, reflect and self-regulate, which is best acquired between the ages of 17 and 22. More attention should also be paid to the influence of family, social, and personal factors on skill acquisition. Second, strategies of measurability of relevant skills and knowledge need to be (further) developed. Although it would be best to measure skills and knowledge directly in everyday work and life, this cannot be implemented in practice. Therefore, tests, rather than self-assessment by respondents, would be a good alternative. Statistical estimation methods can be used to survey required skills, or analyses can be carried out with the help of occupational experts. Third, according to van der Velden, the longitudinal perspective must be addressed more strongly in order to be able to identify long-term outcomes and impact relationships.

Rolf van der Velden has supervised several (inter-)national studies on the transition from school to work, including the international REFLEX project. He is currently coordinator of the Netherlands Cohort Study on Education of the Netherlands Initiative for Educational Research (NRO) and one of the coordinators in the PIAAC project. His current research focuses on education and skills development, the transition from education to work, the knowledge economy and the demand for 21st century skills, skills shortages, and the acquisition and decline of skills over the life course.

Link to the PDF of the presentation

Link to the profile page Prof. Rolf van der Velden at Maastricht University