IDEAS - Iniciativas de desarrollo educativo y sociocomunitario

The aim of the paper is to investigate the consequences of higher educational expansion on two goals of the educational system, that of promoting equity of educational opportunities and that of providing credentials that facilitate the matching between labour supply and demand. The first goal is typically studied by research on inequality of educational opportunities, the second by research on returns to education and credential inflation. The key idea of the paper is that educational expansion can have different and possible opposite effects on the two goals.
a. If with educational expansion equality of educational opportunities increases, while the occupational values of the titles decreases, one has a trade-off scenario, ie an increase in equality of educational opportunities is matched by a decline in the value of higher education in the labour market.
b. If equality of opportunities does not increase, despite expansion of higher education, and the returns of higher education degrees decline, one has then a worst-off scenario.
c. Finally, if with educational expansion equality of opportunities increases and there is no credential inflation, one has a best-off scenario In this paper we systematically investigate these alternative scenarios. We perform the same empirical analysis on two distinct data sets in order to test the robustness of our findings. We use micro data from EU-SILC 2005 and from the four merged waves of the European Social Survey (2002- 2008) for 23 countries.
The structure of the remaining paper is the following. In the first section we examine more in details the theoretical underpinnings and empirical evidence available of the alternative scenarios relating the level of vertical stratification in tertiary education to schooling equality and to the occupational value of school titles. In the third section we explain the research design and data and variables used in the empirical analysis. Issues of measurement errors in the two surveys are also discussed at some length. Finally, in the fourth section we present our results, while in the last section we draw our conclusions.