Social background, credential inflation and educational strategies

The primary goal of this paper is to examine the impact of credential inflation on educational attainment in twentieth century United States. To do so, we create a measure of 'intergenerational credential inflation' (IIF) and include it in regression models predicting educational transitions. Using the General Social Surveys of 1972-2000 we find that people are generally less likely to invest in schooling if its value is relatively low. An exception is the final transition to a postgraduate degree, where we find that when its value is low, children of parents with postgraduate education are more likely to take it. This finding supports relative risk aversion theory, which assumes that the main goal of children is to avoid downward social class mobility. Perhaps most important, we find that credential inflation is particularly influential on transition probabilities if parents had made the same transition. This pattern is consistent with the information differential thesis that children are more informed about the value of education if their parents acquired it.