The Relationship Between Postsecondary Education and Skill - Volume 34 - Academic research on credentialism vs human capital

Oct 15, 2026

This paper evaluates how employer-required postsecondary credentials relate to graduates’ on-the-job skill use. Grounded in theoretical debates between credentialism and human capital theory, it reviews prior work that emphasizes earnings, underemployment, and productivity while highlighting limited empirical focus on skill utilization. Statistical results indicate a strong alignment between employees’ credentials and employers’ needs, and the study further examines how program-specific features affect each theoretical position’s viability.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages28

Reading Time1 h 11 min

AccessFree to download

Abstract

Introduction

Theoretical Context

Functionalism and Human Capital Theory

The Canadian Journal of Higher Education La revue canadienne dʼenseignement supérieur Volume XXXIV, No. 2, 2004 pages 97–124 The Relationship Between Postsecondary Education and Skill: Comparing Credentialism with Human Capital Theory DAVID WALTERS Brock University ABSTRACT This paper assesses the importance of the credential requirements used by employers to attract graduates who will use their education on the job. The framework of this study is embedded within the theoretical debates between proponents of the credentialist and human capital theories of education. Past research related to these debates has focused largely on issues such as earnings, underemployment, and productivity, while less empirical treatment has focused on the issue of skill utilization. The statistical analysis suggests that thereis a strong correspondence between employeesʼ credentials and the needs of their employers. The extent to which the viability of each theoretical position depends on speciﬁc postsecondary programs is also explored. 98 David Walters RÉSUMÉ Cet article se penche sur lʼimportance des lettres de créance exigéesparles employeurs pour attirer les étudiantsgradués qui feront usage de leurs compétences sur le marché du travail. Il sʼinscrit dans le débat théorique opposant les tenants de lʼapproche “crédentialiste”et ceux de la théorie du capital humain en éducation. La plupart des études à caractère empirique ont insisté jusquʼà maintenant sur des thèmes comme le revenu, le sous-emploi et la productivité, alors que les études théoriques se sont davantage intéressés à lʼutilisation des compétences. Lʼanalyse statistique présentée ici suggère une correspondance marquée entre les références des employés et les besoins de leurs employeurs. Nous analysons également le lien entre les approches traitées et le programme dʼétudes post-secondaireauquel elles sʼadressent. INTRODUCTION As more and more employers are demanding postsecondary credentials for basic entry-level positions, many investigators are deeply concerned about whether postsecondary credentials are actually needed in the contemporary labour market. Does a postsecondary education provide students with the skills that they need in order to be successful? Or does it simply supply educational credentials? More speciﬁcally, does postsecondary education teach the skills needed for speciﬁc professional occupations, or does it merely provide them with a slight advantage when competing for jobs that could be performed with a lower level of schooling? Drawing on a large Canadian dataset, this study assesses whether the credentials requested by employers are useful, in terms The Canadian Journal of Higher Education Volume XXXIV, No. 2, 2004 The Relationship between Postsecondary Education and Skill 99 of obtaining graduates with the appropriate skills for their jobs. This paper is also intended to inform the theoretical debates in this area, as much of the discussion and analysis is organized around human capital and credentialist approaches. They are the two most fruitful approaches available to analyze the transitions from school to work; however, there is little empirical evidence available that would enable the propositions of each theory to be tested. The relevant theoretical issues are discussed brieﬂy below. THEORETICAL CONTEXT Functionalism and Human Capital Theory The idea that the expansion of postsecondary education systems in developed countries after World War II was the consequence of industrialization is associated with the sociological functionalist approach. According to functionalist theory, economic and technological innovation generally raises the skill levels required to perform jobs. At the same time, manual labour jobs disappear as new knowledge-based jobs grow and the need for new knowledge increases within existing occupations. Thus, formal educational institutions must expand in order for individuals to learn the skills required

FAQs

What is the paper’s central question about credentials and skills?

It asks whether postsecondary education provides the actual skills needed for job success or mainly supplies credentials, and whether those credentials matter for specific occupations.

How does the study frame the theoretical debate?

It situates the analysis within debates between credentialist and human capital theories, emphasizing that transitions from school to work have not been strongly tested with empirical evidence.

What do the statistical findings suggest?

The analysis suggests a strong correspondence between employees’ credentials and employers’ needs, and it also explores how the plausibility of each theory depends on specific postsecondary programs.

Oct 15, 2026

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