When information is imperfect, markets may not work well. If consumers are highly uncertain about the quality of what they are buying, they become less likely to buy. If a lender is highly uncertain about whether a potential borrower will repay a loan, the lender is less likely to make that loan. The more uncertain that an employer is about the quality of a potential employee, the less likely the employer is to hire that person. This problem of imperfect information in labor markets is especially severe now, with an unemployment rate that has been between 8.8% and 10.1% since April 2009. If someone hasn\’t been working, how can an employer judge their skills and talents?

Is there a way in which workers with experience could have a way of demonstrating their skills and knowledge that didn\’t involve taking a class or getting a degree? There are some recent experiments along these lines in the U.S. economy, but it turns out that several other countries have already developed processes for recognizing  non-formal and informal learning.

Jeff Selingo, who is editorial director of the Chronicle of Higher Education, tackled the question of whether colleges might lose their near-monopoly power over anointing people with job credentials in a short article last month. Selingo writes:

The day when other organizations besides colleges provide a nondegree credential to signify learning might not be as far off as we think. One interesting project on this front is an effort to create “digital badges,” which would allow people to demonstrate their skills and knowledge to prospective employers without necessarily having a degree. Badges could recognize, for example, informal learning that happens outside the classroom; “soft skills,” such as critical thinking and communication; and new literacies, such as aggregating information from various sources and judging its quality. And in a digital age, the badge could include links back to documents and other artifacts demonstrating the work that led to earning the stamp of approval.

Until now an interesting-but-somewhat-fringe idea, digital badges received a big boost last week, when the John D. and Catherine T. MacArthur Foundation announced a $2-million competition to create and develop badges and a badge system. (The contest is also supported by Mozilla and the Humanities, Arts, Sciences, and Technology Advance Collaboratory, otherwise known as Hastac.)

At the announcement in Washington, the U.S. secretary of education, Arne Duncan, called badges a “game-changing strategy” and said his agency would join with the Department of Veterans Affairs to award $25,000 for the best badge prototype that serves veterans looking for well-paying jobs. Under a badge system, colleges would no longer be the sole providers of a credential. While badges could be awarded by traditional colleges, they could also be given out by professional organizations, online and open-courseware providers, companies, or community groups.

In the Autumn 2011 issue of the Wilson Quarterly (not available free online), Kevin Carey writes in an essay about \”College for All?\” about how the Western Governors University is awarding degrees based on competency, not classroom hours. Carey writes:

\”While American higher education is diverse in many ways, encompassing a variety of missions and constituencies, it is remarkably undiverse when it comes to awarding degrees. Every institution grants the same two- and four-year credentials that signify little more than how many hours the bearer sat in classrooms. Newer institutions such as Western Governors University (WGU) are turning that equation upside-down, awarding degrees when students demonstrate defined competencies, regardless of how long it took to achieve them.\”

WGU is a fully accredited nonprofit institution founded in the 1990s by the governors of 19 western states that now enrolls 25,000 mostly adult students online. It currently focuses on occupation-specific fields such as education, business, and health care. But efforts are afoot to expand the model into more traditional academic fields.

The WGU experiment points to a future public education system in which public subsidies are tied to commonly understood goals for learning, not how old the student happens to be or whether he or she happens to live. In increasingly digital learning environments, it will be possible to track, store, and summarize evidence of learning in ways that render traditional time-based credentials obsolete.\”

On the international front, Patrick Werquin wote an OECD report on \”Recognising Non-Formal and Informal Learning: Outcomes, Policies and Practices\” which was published in spring 2010 (and to my knowledge is not freely available on-line). Some highlights (omitting some references for readability): 

\”All data on lifelong learning indicate that the highest qualification held by the great majority of people is obtained in the formal system of education and initial training, which in the case of many adults occurred some time ago. This is confirmed by other sources revealing that almost 90%of adult learning initiatives do not lead to a qualification, even though, depending on the country, 20-60% of  individuals who embark on learning do so primarily to obtain one. … There is therefore a patent lack of visibility as regards people\’s real knowledge, skills and competences, since those acquired during their working lives or other activities remain invisible. This lack of visibility is all the more significant for those who left the initial education and training system many ears earlier. It is also especially detrimental to those with a low level of qualification …\”

\”More recently, OECD (2007) ranked the recognition of non-formal and informal learning outcomes high on a list of 20 mechanisms identified as potentially capable of motivating learning. At the same time, major international organizations are showing a close interest in the recognition of learning outcomes. All these studies point in the same direction: formal learning alone cannot account for all of the learning encompassed by the concept of lifelong learning. There is thus no shortage of studies that argue for the recognition of non-formal and informal learning outcomes. …\”

Werquin\’s report for the OECD lists mechanisms for recognizing non-formal and informal learning in 21 countries–notably, with no mention of any such effort in United States. Two countries with especially well-developed policies along these lines are Ireland, which has certificates for Recognition of Prior Learning (RPL), Accreditation of Prior Experiential Learning (APEL), Recognition of Current Competences (RCC), Learning Outside Formal Teaching (LOFT) and others, and Norway, which has a \”skills passport\” system.

These systems for recognizing non-formal and informal learning systems vary considerably across countries. I can imagine a number of practical concerns. But for many Americans, maybe especially those with lower and medium skill levels, their educational credentials (often from long-ago) don\’t reveal their true skill set. For many of them, going back to school for some additional degree or certificate is impractical, and frankly a waste of time–because whether they have a piece of paper from an educational institution to prove it, they have already acquired the skills they need for many jobs. America should be thinking more about ways of connecting potential workers to the labor market that don\’t involve telling those who don\’t flourish in school that they need to keep attending. A couple of weeks ago I posted on Apprenticeships for the U.S. Economy as one such option. Ways to recognize competences achieved through non-formal and informal learning seems like a complementary approach.

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