The Reconstruction of the Mechanisms of Educational Credential Devaluation: A Multi-Level Integrative Analysis of Educational Expansion, Institutional Absorption, and Labour Market Restratification

Against the backdrop of the continued massification of higher education, educational credential devaluation does not imply that diplomas have become meaningless. Rather, it reflects a declining marginal discriminatory power of educational credentials as proxy signals of ability and productivity, thereby inducing a systematic reordering and internal differentiation of the returns structure within the labour market. Building on the theoretical lineage of signalling and screening, and synthesising evidence from cross national micro data, job advertisement data, and cohort studies, this article conceptualises credential devaluation as a form of structural revaluation triggered by educational expansion. When the growth of highly educated labour supply outpaces the creation of high skill jobs and the intensification of task complexity, credentials shift from a core differentiating signal to an entry threshold. Screening weight correspondingly moves towards observable skills, institutional prestige, field of study matching, and relative educational position, while reinforcing the degree completion premium and threshold based hiring practices. Its observable consequences are concentrated in four dimensions: downward shifts in job match quality and declining skill utilisation; persistently high levels of qualification mismatch that translate into wage penalties; a separation between returns to years of schooling and discrete degree premia; and intensified stratification driven by rising entry thresholds and credential inflation. The article further argues that youth mismatch is not a linear trend, but a context dependent outcome shaped by the interaction of cyclical shocks, institutional absorption, and labour market entry timing effects, with cross border mobility functioning as an exogenous buffer.