September 25, 2014
"Back in the Day, You Only Needed to Be Smart; Now You Need a Degree ! "
Research Finding :
In the 1980s, rapid technological growth in the U.S. raised the relative importance of on-the-job training, in comparison with classroom learning, and thus increased the value of employees’ cognitive skills. But in the 2000s, technological change has slowed, and work environments have become more stable, and reduced the reward for cognitive ability among workers .
As a consequence, employers now value workers’ cognitive abilities less and their formal education more.
Supporting Stat :
The financial return on employees’ cognitive ability declined by 30% to 50% from the 1980s to the 2000s, while the return on FORMAL EDUCATION has increased.
Conclusion : A formal qualification and certifications matter now , more than they did in the past. Invest on it. Reap rewards.
Courtesy : Gonzalo Castex of the Central Bank of Chile and Evgenia Kogan Dechter of the University of New South Wales in Australia & HBR .
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