The positional value of education in the Americas: dynamics of inequality in labour market returns for highly unequal countries, 2000-2019

The article examines how the labour market value of education has changed in the context of the expansion of higher education. However, one drawback is understanding how it generates differences between high and low-skilled labour markets, particularly in contexts of high inequality and informality. This could be linked to specific mechanisms by which employers value educational credentials as signalled skills. Using the Luxembourg Income Study (LIS), we analyse trends over two decades in 11 American countries. Our results confirm the previous results for the claim that education has become increasingly positional, compared with the absolute model of education. However, we find that the relative gains in wages for workers with higher levels of education, as the pool of higher education graduates expand over time, increased only slightly in high-skilled occupations, while their relative gains decreased for lower-skilled occupations. This trend is present in both absolute and positional models of education. Moreover, when looking at the structure of labour markets in terms of the linkage between educational credentials and occupational groups, we higher the tertiary education specificity of occupations, the higher the earnings for workers with advantaged positions. These findings are consistent with processes of displacement of low-skilled workers due to increasing competition among highly educated workers, from the positional model of education.