Value of qualifications
What does it mean to gain a qualification? Evidence suggests that it not only improves your ability in the area of study, but can also signal to people that you’re good in general at things that they want you to be good at, even if you were before you started the qualification. Research Officer, Tony Leech, takes a look at the implications of such findings.
To what extent are qualifications about what you learn while you’re studying them? We know that there are significant benefits to qualifications such as university degrees and A Levels. For example, qualifications can be required for entry to certain, particularly highly skilled, jobs, or for further study, develop candidates’ skills in and knowledge in particular areas, and prepare individuals for citizenship and involvement in society.
Moreover, in a professionalised labour market, a supply of well-qualified candidates is essential. As Ball (2022)  argues, we should not believe common labour market myths such as that there are too many graduates. Evidence suggests that there are more graduate-level jobs for which people are under-qualified than over-qualified. As Coulter et al (2022)  have argued, “we have come to rely on the expansion of [higher] education to prop up economic growth”. This highlights the continuing importance of high level qualifications. However, it is important to ensure that qualifications are fit for purpose. Again from Coulter et al: “we do need to tidy up some of the rough edges that lead to poor outcomes.”
There are a number of ways in which researchers have assessed the utility of qualifications such as degrees. The financial returns to qualifications can be assessed by economists using longitudinal datasets to determine, for example, the earnings premiums of particular degree classes or grades, or subject choices (that is to say, how much more one would earn by getting a first class degree compared to a 2:1, or studying mathematics compared to geography, or whatever). For a recent analysis of these themes in the university degree context, see Britton et al (2022) .
This kind of work operates under the paradigm of human capital theory, which suggests that people can increase their productive capacity (and therefore earning potential) through better education and training.
On the other hand, an influential alternative critical line of thinking suggests that the main impact of some qualifications is to “signal” pre-existing knowledge or abilities. In other words, it is possible to benefit financially from gaining a qualification such as a university degree not because it really improves your ability in that area, but because it tells people like university admission tutors or those leading job interviews that you’re good in general at things that they want you to be good at, even if you were before you started the qualification.
For example, passing A Level English might demonstrate mainly that you’re a good English speaker. You might well have been a perfectly good English speaker before you started the qualification – but the qualification “signals” to the outside world that you have that ability. These signals can be very general indicators – “this person is clever” or “that person works very hard and is organised”. In other words,
...the signals provided by qualifications can be a different attribute of the qualifications to the actual knowledge or skills learned within them.
Some writers, then, say that education systems based on the acquisition of qualifications are wasteful, as a lot of time is spent on teaching information and skills that either learners aren’t going to need in future or already have. Perhaps the most forceful critique of this kind comes from the American economist Bryan Caplan, who, in his The Case Against Education (2018) , argues, in terms of economic utility, that much of education (beyond the foundational level) is a waste of time and money. Caplan leaves out a whole range of important educational functions, but there may be something to the idea in general terms.
A recent report from the Social Market Foundation (Bhattacharya and Percy, 2021) , which overviewed various different works on signalling, makes a more subtle case. The writers suggest that something like 20-40%, on average, of the economic returns to a candidate taking a qualification, can be attributed to the effects of signalling. This is not catastrophic, perhaps, but is enough of a percentage for us to need to think deeply about this issue.
You might argue in response “isn’t signalling a good thing?” For one thing, qualifications that lots of people take are likely to signal the same thing in the same way.
If we didn’t have A Levels (and equivalent qualifications) to judge between candidates for university places, we would likely need a bewildering array of psychometric and personal tests to determine what abilities candidates had – and it’s hard to see how such a system could be fair or consistent.
Qualification-based signalling is also much fairer than making selection decisions on alternative signals – such as “which school did you go to?” For these reasons, proposals to rip up the qualifications system we have now entirely are unlikely to ever be desirable, and this adds to the sense that the system has considerable value.
Nevertheless, Bhattacharya and Percy’s work offers several important challenges for education policy experts. For example: should we consider reducing the amount of time spent on developing credentials, or using assessment more efficiently? This is an important issue for the present debate about the future of assessment in England. Cambridge University Press & Assessment is actively involved  in efforts to think through the implications of changes to the volume, type or quality of assessment in the school and college contexts – for example, through our research into high stakes digital qualifications. In addition, could we expand the list of the things that we think are important in our education systems? This would include considering (and perhaps, but not necessarily, assessing) a wider range of skills and abilities, including those learned outside of formal education.
It is important to continue to think about the value of qualifications to students, not only in relation to what they learn directly, but also what doors they open for them. Students’ preferences, ambitions and circumstances may change as they progress throughout their studies, suggesting that some degree of over-qualification may be valuable. What more we could be doing for students who move through education via less conventional or default routes is also a question of continuing importance. Cambridge researchers have long studied  the progression value of qualifications we offer, especially in the vocational space.
Bhattacharya and Percy also draw attention to what they call credential inflation. This refers to the problem whereby, as people seek more distinction from their competitors by taking more/higher qualifications, more people want to take those qualifications too, to try to gain that distinction themselves. As time goes by, the qualification therefore offers less of a distinction, meaning that people increasing look to higher-level qualifications to offer such a contrast between themselves and others. This results ultimately in access to jobs that, for example, used to require an undergraduate degree now increasingly requiring a master’s, without necessarily there being improvements in the abilities of those undertaking them. The knowledge and skills which have been acquired are also not utilised to the extent that they could be. As a result, this makes the qualifications system potentially quite inefficient. But there is a tension between this problem, and the strengths of qualifications in terms of what they do for students; careful attention needs to be paid to this balance.
A shared understanding of purpose is therefore crucial for the English qualifications system at both school and university levels. At the moment, the system sees qualifications serve various (some would say incompatible) purposes: these include selection for further study, accountability of teachers and schools and certification of ability at the end of a course of study. If these different purposes make actors within these systems prioritise different, competing things, the system will inevitably contain inefficiencies. If there was more of a shared consensus around the main point of qualifications – say, if it was agreed that the main purpose was to discriminate between candidates seeking to access future study – policy interventions could be better targeted.
Cambridge University Press & Assessment colleagues will be actively engaging in thinking through some of these issues in the coming months.
About the author
Tony Leech, Research Officer
Tony is involved in the analysis of assessment material, aspects of the role of digital technology in high stakes assessment, assessment design principles, and patterns of formative assessment internationally. He is also interested in debates on the future and purposes of assessment, the place of vocational and technical qualifications in learners’ programmes of study, access to higher education and social justice in education.
 Ball, C. (2022). Busting graduate jobs myths. Universities UK. Available online at: https://www.universitiesuk.ac.uk/sites/default/files/field/downloads/2022-04/busting-graduate-job-myths_0.pdf
 Coulter, S., Mulheirn, I., Scales, J. and C. Tsoukalis. (2022). We Don’t Need No Education? The Case for Expanding Higher Education. Tony Blair Institute for Global Change. Available online at: https://institute.global/sites/default/files/articles/We-Don-t-Need-No-Education-The-Case-for-Expanding-Higher-Education.pdf
 Britton, J., Walker, I., Waltmann, B. and Y. Zhu. (2022). How much does it pay to get good grades at university? The Institute for Fiscal Studies. Available online at:https://ifs.org.uk/uploads/How-much-does-it-pay-to-get-good-grades-at-university.pdf
 Caplan, B. D. (2018). The case against education: why the education system is a waste of time and money. Princeton, New Jersey: Princeton University Press.
 Bhattacharya, A. and Percy, C. (2021). Signal failure: How can we get more value and less waste from our education system? The Social Market Foundation. Available online at: https://www.smf.co.uk/publications/signal-failure/
 Cambridge Assessment (2021). Outline principles for the future of education. Available at:https://www.cambridgeassessment.org.uk/blogs/principles-for-the-future-of-education/
 Vidal Rodeiro, C.L. & Williamson, J. (2022). Tracking the June 2020 Key Stage 4 cohort: progression to post-16 study. Cambridge University Press & Assessment. Available at: https://www.cambridgeassessment.org.uk/Images/652616-tracking-the-june-2020-key-stage-4-cohort-progression-to-post-16-study.pdf