Although it begins as a cheeky little joke, Jiminy's badge is a validation of his work as Pinocchio's conscience, not to mention his own personal growth over the course of the film.

The badge is first mentioned after Jiminy takes the job from the Blue Fairy. Check it out:

JIMINY: Gee, thanks. But don't I get a badge or something?

THE BLUE FAIRY: Well, we'll see.

JIMINY: You mean maybe I will?

THE BLUE FAIRY: I shouldn't wonder.

JIMINY: Make it a gold one?

THE BLUE FAIRY: Maybe.

As we know, however, Jiminy gets off to a rough start with his new gig. He's late on his first day. He fails to free Pinocchio from the Great Stromboli. He even allows the kid to get nabbed by Honest John for a second time.

But our man turns it around. With Geppetto safely extracted from the belly of Monstro and Pinocchio finally made human, the Blue Fairy rewards Jiminy with a gold, star-shaped badge reading "Official Conscience." That's legit, son.

On one hand, this is a straightforward reference to the wishing star that kicked off this whole chain of events. More than that, however, it validates Jiminy for sticking with Pinocchio through thick and thin—from Pleasure Island to Monstro's lair.