Closure Through Occupational Standardization?—Signalling Effects of Domestic and Foreign Credentials

Abstract

The article investigates the effect of occupational standardization on employees’ probability of getting high profile jobs without having the necessary educational credentials. Based on the German Socio-Economic Panel, it is shown for the first time that such formal undereducation becomes more unlikely, the more standardized an occupation is. Contrary to theoretical expectations, this effect is not observed among employees without any credentials beyond schooling. When they access highly standardized occupations despite lacking the credentials, they are equally as frequently employed in higher positions as in occupations with low standardization. Overall, the effects of occupational standardization on employees’ undereducation are about the same for immigrants as for natives. However, immigrants are less likely to gain access to standardized occupations in the first place. This suggests that occupational closure among immigrants is effective in addition to intra-occupational closure through more difficult access to standardized occupations.