Returns to Education: Taking Account of Employers' Perceptions and Use of Educational Credentials

In examining labour-market returns to educational performance it is necessary to understand the way in which those actors who govern access to such returns—namely employers—perceive and utilize measures of performance. We argue that this will be responsive to institutional features of the educational system and the labour market and the relationship between them. We illustrate our case through an examination of the way in which Irish employers make use of educational credentials in deciding which school leavers to employ and how much to pay them. We suggest that failure to take account of employers' perceptions and interpretations of educational qualifications is likely to distort our understanding of the way in which educational attainment is rewarded in the labour market and how this can vary between sectors within a country and between countries whose institutional arrangements are different.