How did occupational returns to education change over time?

PWP-CCPR-2014-017

Abstract

Comparative status attainment research suggests that the effect of education on occupational standing has grown over cohorts as predicted by modernization theory. We argue, however, that an adequate test of the theory requires that education be treated as a set of discrete categories rather than as a single continuous variable, the latter approach prevailing in the field so far. We examine this idea using a subset of the International Stratification and Mobility File containing information on 637,767 men from 42 nations observed in repeated cross-sectional samples covering most of the 20th century and the beginning of the 21st century. We measure educational attainment using an ordinal scale differentiating seven levels, derived from the International Standard Classification of Education. The data show partial convergence and partial divergence between average occupational statuses of individuals with various levels of education: occupational returns to education among those with tertiary education are diverging from occupational returns among those with secondary education or less; but within these two large categories, the specific level of education attained appears to become less important over time. Over all, occupational returns to education have been decreasing. This picture is consistent with a greater increase over time in the amount of education people attain than in the proportion of high status occupations. Taken together, these results suggest a complex pattern of changing relationships between education and occupation, which is consistent with some but not all aspects of modernization theory. In the final section of the paper we consider the implications of the results for claims stemming from over-education, occupational upgrading, and skill-based technological change theories.