'Stigmatization by Negative Selection': Explaining Less-Educated People's Decreasing Employment Opportunities

Abstract

The displacement argument is the dominant explanation for the phenomenon of trained individuals out‐qualifying the less educated in job competition. Decreasing employment opportunities are seen as a labour‐market matching problem. The explanation given in this paper is ‘stigmatization by negative selection’. It takes into account that educational expansion has not only changed the number of less‐educated people, but also the ‘quality’ of the less‐educated group – due to changes in its group composition caused by increasing selection in the educational system, employers' perceptions, and ultimately employers' human resource management of this group. Thus, shrinking employment opportunitities for less‐educated people are not only derived from distributional but behavioural changes. Whereas the displacement argument is mainly based on labour‐market disequilibrium in terms of quantity, the ‘stigma by selection’ argument considers qualitative changes in this relationship between individuals and their environment. The ranking process is expanded into a ‘sorting‐out’ process for the less‐educated group which begins in school. The main argument is that following educational expansion, employers increasingly trust the sorting function of schools and teachers' evaluation, resulting in an exclusion of the less well educated. The empirical findings based on West German data correspond to the theoretical reasoning of the ‘stigma by selection’ argument.