Higher education serves as a critical vehicle for upward mobility and equal opportunity in the U.S. labor market. First, it provides opportunities for workers to develop critical skills and competencies, and more generally pursue goals for self-improvement throughout their lives. Second, higher education provides a process for obtaining credentials, which play a critical role in differentiating workers in the labor market by providing signals that represent their skills, competencies, and accomplishments. In an ideal world, credentials would be tightly coupled with the skills and competencies that a student obtains from an educational experience. In reality, traditional academic credentials function more like roughly hewn proxies for ability, whose signaling power must be supplemented by other information. This tends to entrench social stratification rather than transform it.
The stated objectives for assessments and credentials often include a desire to overcome human biases with more “objective” measures of a person’s skills, qualifications, or character. However, results have generally fallen short, either by replicating existing inequalities or by overemphasizing skills that are easy to measure in a standardized way. A persistent challenge has been to develop assessments that are both meaningful and accurate. At best, educational assessments tend to be roughly hewn proxies for complex social structures and experiences.
In response to these challenges, people have begun to call for a fundamental rethinking of how we train and credentialize the future workforce. In this brief, part of the Next American Economy Learning Series, we explore the challenges and opportunities related to some of these efforts. First, we discuss the emerging challenges associated with credentialing given the increasingly diverse landscape of higher education. We then explore the specific risks and affordances related to two distinctive approaches to capturing meaningful signals from this “unbundled” (and increasingly digitized) landscape of higher education: first, unbundling credentials from the university degree, and second, moving beyond credentials to more direct data-based evaluations. Based on this discussion, we offer a few guiding principles for future development of an ideal infrastructure for managing credentials.