An analysis of the economic returns of education in Australia finds a rising need for education at a time of diminishing apparent returns. It is proposed that the notions of credentialism and education as a positional good provide a better explanation for this phenomenon than does the human capital approach. (MSE)

Since the 1960s there has been a major expansion in the number of people in Australia holding post school educational credentials and the proportion of the full time work force with those credentials. The penalties of not holding credentials, in terms of the incidence and duration of unemployment, are increasingly severe. At the same time, there…