For decades, the dominant narrative in education policy has been straightforward: invest in human capital (education), and the economy will reward you with better jobs and higher wages. However, a deep dive into sociological and economic research suggests that this promise is increasingly fractured. By examining the concepts of social capital, the myth of meritocracy, the failures of technological wage theories, and the rise of governance by numbers like PISA, we can see a much more complex picture of how education actually functions in society.

The Myth of the Meritocratic Promise

We often believe we live in a meritocracy where intelligence and effort determine success. However, scholars argue that the link between education, merit, and economic reward is far from perfect. While meritocratic arguments claim that IQ and effort determine attainment, research shows that class origin significantly affects educational outcomes, often through parental strategies to secure privilege.

Furthermore, the assumption that the labor market rationally rewards the most productive individuals is under scrutiny. Evidence suggests that rewards are often arbitrary, based on market imperfections or “rents” rather than pure productivity. We may be moving away from a true meritocracy toward a “noo-plutocracy” (rule by the wise and wealthy) or a “noo-tychocratic” society (rule by the wise and lucky), where students from lower socio-economic backgrounds essentially gamble on education with uncertain returns,.

The Fracture in the Economy: Skill-Biased Technological Change

For years, the theory of Skill-Biased Technological Change (SBTC) has influenced policy, arguing that new technology increases the demand for skilled workers, thereby raising their wages. SBTC proponents believe that if the supply of educated workers increases, it will meet this technological demand.

However, recent data challenges this theory. Despite a doubling of the educated labor force globally, productivity in countries like the UK and USA has flatlined or declined. Real wages for many college graduates have fallen over recent decades, with significant wage growth reserved only for the top decile of earners,. Rather than technology simply lifting all boats, we are witnessing a fragmentation of the labor marketand a “global auction” for jobs, where high-skilled work can be offshored to lower-cost countries,. The result is that education alone cannot be seen as the antidote to labor market inequality.

The Hidden Ingredient: Social Capital

If human capital (skills and knowledge) isn’t the sole predictor of success, what is missing? Sociologist James S. Coleman argues for the vital importance of social capital. Unlike financial capital (money) or human capital (skills), social capital inheres in the structure of relations between and among persons.

Social capital manifests in several forms:

• Obligations and Expectations: A system of “credit slips” where doing things for others creates reciprocal obligations.
• Information Channels: Social relations that provide valuable information, saving time and attention.
• Norms and Sanctions: Effective norms that encourage acting for the public good or inhibiting crime.

Crucially, social capital within the family—specifically the time and attention parents give to children—is essential for converting a parent’s human capital into the child’s success. Furthermore, “intergenerational closure,” where parents know the parents of their children’s friends, creates a safety net of norms and monitoring that improves educational outcomes, such as reducing dropout rates,.

Governing by Numbers: The PISA Effect

On a global scale, how do nations measure their educational “worth”? Enter the Programme for International Student Assessment (PISA), managed by the OECD. PISA has become a powerful tool for “governing by numbers,” using comparative data to shape national education policies.

PISA creates a “European education space” of commensurability, where distinct national systems are de-contextualized to allow for direct comparison,. The impact of PISA varies by country:

• Finland: Experienced a “PISA-surprise,” becoming a model for others due to its high performance.
• Germany: Suffered a “PISA-shock” in 2000, leading to urgent reforms and a shift toward output-based standards,.
• The UK: Viewed PISA results more as a brand affirmation, though Scotland used it to validate its specific educational ethos,.

PISA essentially acts as a “political technology,”allowing policymakers to externalize justifications for reform by pointing to international rankings rather than domestic pressures,.

The Way Forward

The convergence of these factors paints a challenging picture. We face a reality where the “opportunity bargain”—the idea that education guarantees economic security—is breaking down.

• Social capital is a public good that is often underinvested in because individuals cannot capture all its benefits.
• High-stakes testing and global comparisons like PISA drive policy often at the expense of local context.
• Economic rewards are increasingly disconnected from productivity and educational attainment,.

To address these fractures, we may need to look beyond the “employability” of students and focus on education’s role in citizenship and redistribution. We must acknowledge the political economy of global capitalism—including the power of transnational corporations—rather than relying on simplistic supply-and-demand models of skills,. Ultimately, simply encouraging more education for jobs that may not exist is a strategy that intensifies competition without solving structural inequality.