This article explores the role of national institutional factors - more specifically, the level of skill transparency of the education system and labour market coordination - in accounting for cross-national differences in the relationship between education and occupational status. Consistent with previous research, our findings suggest that skill transparency is the primary moderator. Countries with a highly transparent educational system (i.e., extensive tracking, strong vocational orientation, limited tertiary enrolment) tend to be characterized by a strong relationship between education and occupational status. These findings hold even after controlling for the level of labour market coordination. Nevertheless, we also find that labour market coordination plays an independent role by dampening the effect of education on occupational status. Taken together, these results suggest two quite different policy implications: (1) strengthening the skill transparency of the education system by increasing secondary and tertiary-level differentiation may strengthen the relationship between education and occupation, regardless of the level of coordination, and (2) increasing labour market coordination could lead to improved social inclusion and a reduction in inequalities related to educational attainment. © London School of Economics and Political Science 2010.
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