Skills, positional good or social closure? The role of education across structural-institutional labour market settings

A theoretical approach is formulated that connects various theories of why education has an effect on labour market outcomes with institutional settings in which such theories provide the most likely mechanism. Three groups of mechanisms are distinguished: education as an indicator of productive skills, as a positional good and as a means for social closure. Conditions were formulated under which labour market behaviour is likely to correspond to the behavioural models underlying the three mechanism groups. To test the theoretical relationship between settings and mechanisms, I formulated hypotheses on setting variation in the (horizontal and vertical) process of matching educational level and field of study to jobs and its consequences for wages. Analyses in which Dutch survey data were combined with industry statistics confirmed the hypotheses.