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Graduate workforce over-educated: report
New research suggests many graduates are over-qualified for the jobs they’ re taking. By Aileen Macalintal
There is a substantial mismatch between employment and qualifications among Australian graduates, according to a report in the Australian Economic Review.
Professors Ian Li from the University of Western Australia and Paul Miller of Curtin University examined the level of demand in the job market for skilled workers, and the results are surprising.
Their study revealed that about 50 per cent of recent graduates are employed in jobs that require a level of education lower than a university degree, and that over-education can result in a 12 per cent reduction in earnings.
A surprising aspect of the study, Li said, is the fact that the extent of over-education was very much the same regardless of which university group.
“ Earnings penalties associated with over-education did not vary much across university groups,” he said.
Economists Li and Miller used data from the annual Graduate Destination Surveys from 1999-2009, which takes in graduates from universities that include the Group of Eight, Australian Technology Network, and Innovative Research Universities.
They concluded:“ either the quality of the graduates in particular fields of study emerging from the various broad university groups are very similar, or the Australian graduate labour market simply does not pay attention to the quality differences that are there, at least in the short term.”
Over-education can also be present even when an overall balance is found between the number of graduates and the number of graduate jobs, said Li and Miller.
“ Some recent graduates may also choose to enter jobs that do not require
their qualifications, as these jobs may simply be part of a career path to higherlevel jobs that match their educational attainment,” Li said.
Based on the study, graduates from natural and physical sciences, agriculture and environment, society and culture, and creative arts and other fields were more likely to be over-educated, while nursing graduates were unlikely to experience such a problem.
“ Other fields that had reduced probabilities include medicine and education,” Miller said.
The researchers said other studies have shown that the typical bachelor degree graduate earns around 30 per cent or more than a person who did not undertake post-secondary qualifications.
“ This earnings reward varies between those bachelor-degree graduates who secure a job that matches their qualification, and those that do not,” said Miller.
“ However, this means that even if the bachelor’ s degree graduate did not end up in a job that uses their qualifications, they are still earning some 20 per cent more than a high school graduate,” Miller said.
The researchers also showed a clear hierarchy of earnings for higher levels of qualifications.
Those with graduate certificates or graduate diplomas earned 18 per cent more than those with bachelor’ s pass degrees, while those with masters and doctoral degrees earned 25 and 30 per cent more than bachelor’ s degree holders.“ In other words, university education pays, but it pays more if you can move into a job that matches your training,” the researchers said.
Dr Nathan Cassidy, policy analyst at Universities Australia, dismissed the results of the study.“ Statistics from Graduate Careers Australia show employers continue to snap up graduates with three-quarters of bachelor graduates achieving a job four months after graduation. On the face of it, neither employers nor graduates see higher education as‘ over education’.”
Cassidy said that the study“ correctly indicates that there is always going to be a necessary workforce balance between those with higher education qualifications and those without. However … the demand for higher-skilled graduates is rising by the day.”
He added, in due time, the higher the qualification the graduates have, the more they will earn.
“ AMP / NATSEM has found that a postgraduate will earn $ 3.17 million, compared to $ 2.9 million for a university graduate and $ 2.07 million for a Year 12 completer,” he said.
“ This shows that employers are not just wanting to hire graduates, but are willing to pay a premium for their skills.”
Demand for skilled graduates rises every day, said Cassidy, and demand for qualifications is projected to grow more than twice the projected growth in supply.
“ Recent government modelling has shown that there will be a possible shortfall of 2.8 million higher skilled workers needed by industry by 2025,” he said.
“ And over the next decade, the growth for high-skilled jobs is expected to occur at around 1.6 times the rate of low-skilled jobs.” n
www. campusreview. com. au April 2013 | 9