Description: The dominant view today is that we have entered a global knowledge economy, driven by the application of new technologies and collapsing barriers to international trade and investment, that has accelerated the evolutionary path from a low to a high skills economy. This view is reflected in the central role of education in national economic and social policy. Not only is education seen to hold the key to a competitive economy but it is also seen to be the foundation of social justice and social cohesionIt is also believed that there is a global auction for jobs. Low skilled jobs will be auctioned on price and will tend to migrate to low waged economies such as those in Asian or Eastern Europe, while high skilled jobs will continue to attract higher wages. These jobs will be auctioned on 'quality' rather than price, including the skills, knowledge and insights of employees. This offers the potential for countries such as the Britain, France and the United States to become magnet economies, attracting a disproportionate share of these high skilled, high wages jobs (Brown and Lauder, 2001).This paper will assess the underlying assumptions of the magnet economy and especially the changing relationship between education, jobs and rewards. Our account of the educational, social and economic realities of the early twenty-first century will focus on four facets of the dominant policy discourse: Firstly, we examine the idea that countries such as Britain and America can become high skilled, high waged 'magnet' economies, able to resolve problems of labour demand and income inequalities through educational reform. We will argue that this fails to understand how multinational companies are developing human resource strategies that increase the likelihood of a larger proportion of high skilled jobs being established in relatively low waged economies. Governments in the developed economies have yet to acknowledge the full consequences of countries such as China and India expanding their educational systems to compete for high skilled work within key sectors of the global economy or trends towards the 'offshoring' of skilled along with semi-skilled and unskilled jobs.Secondly, the official policy discourse is driven by a view of human capital that assumes a tightening bond between education, jobs and rewards, with a rising wage dividend for those who invest in higher education. We will argue that the basic premise of the rhetoric concerning human capital - that investments in education and training lead to rising wages - is not a universal law of economic development but a 'transitional' case where there are no guarantees that the educational system will meet the expectations of students, families or governments. Thirdly, the anticipated powershift from employers to 'knowledge' workers has not materialised. The view that there will continue to be an exponential increase in the demand for knowledge workers who will be encouraged to use their creative energies is ahistorical. It fails to take account of the tendency for periods of rapid technological innovation to be followed by standardisation (Weber, 1945). This is as true for 'knowledge' workers today as it was for craft workers in the fledgling automobile industry at the beginning of the twentieth century. Finally, it will be argued that the emphasis on individual employability and raising the educational standards of all ignores increasing 'positional' conflict in access to education and tough entry jobs (Hirsch, 1977; Brown, 2003). As the oversupply of graduates force many to enter employment that does not utilise their knowledge, skills or creativity, the competition for elite jobs intensifies leaving employers with problems of how to select between large numbers of highly qualified candidates and how to legitimate their selection decisions (Brown and Hesketh, 2004). It has also led social elites to find new forms of social closure to give them a competitive advantage. Methodology: This paper is based on over ten years of research drawing on secondary analyses and primary data from two large scale comparative projects funded by the ESRC in the UK. Conclusions: This paper offers a 'state of the art' account of the changing relationship between education, jobs and rewards in an increasingly global economy. It marks a major development from our 1996 paper 'Education, Globalization and Economic Development' which was originally published in the Journal of Education Policy.