ABSTRACT
This chapter suggests that the commonly accepted meritocratic ideology concerning the allocation of economic rewards in this country may be more illusory than real. It demonstrates that the economic value of schooling varies across large urban economies in the United States. Urban economic structure affects the social contract specifying returns to schooling for every class of labor, but this effect varies dramatically contingent upon age, race, gender, and schooling achieved. The historical relationship of education and economic institutions in this country has been interpreted in a variety of ways. The allocation of higher educational credentials demonstrates another linkage between economic and educational systems in American society. The institutionalized system of education serves the needs of advanced capitalism by providing a differentiated work force appropriate for graded positions in the technical division of labor, and by rationalizing this hierarchical social order through invidious distinctions based on educational credentials.
