Entering the labour market in the context of higher education reform and economic recession: young bachelor and master graduates in Portugal

ABSTRACT

A higher education degree has been regarded as an investment that helps young people access good jobs. However, it is increasingly difficult for young graduates to enter the labour market and, more importantly, to access high quality jobs. This paper examines determinants of the wages of young bachelor and master graduates engaged in different contractual arrangements. Linked employer-employee data, namely Quadros de Pessoal (2007 and 2011), were used to compare the impact of standard and non-standard jobs on the wages of post-Bologna graduates who entered the labour market during the economic recession in Portugal. Most graduates start by getting a full-time job, be it stable or flexible. Empirical evidence shows wage differentials linked to the type of contractual arrangement, although the impact in 2007 is not the same in 2011. The contracts that combine flexibility with part-time work have been the most penalised in recent times. The transition of bachelors to the labour market is expected to be more precarious; however, according to data for 2011, master graduates appear to be protected against low quality jobs in Portugal.

KEYWORDS:

• Young graduates
• wages
• contractual arrangements
• Bologna Process
• economic recession
• Portugal

SUBJECT CLASSIFICATION CODES:

• I23
• J13
• J31
• J42

Acknowledgments

This research was possible thanks to the Office for Strategy and Planning (GEP), the Ministry of Economy for access to the data, Quadros de Pessoal. The authors gratefully acknowledge the comments from the participants at LEED 2017 Workshop Faculty of Economics of University of Coimbra (FEUC), Coimbra, Portugal, July 14–15, 2017; Workshop DINAMIA’CET ISCTE-IUL, December, 18–19, 2017; and SRHE International Conference on Research into Higher Education, Celtic Manor, Newport, Wales, UK, December 5–7, 2018.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Non-standard employment relations represent solutions to cope with flexibility and include notably part-time work, temporary help agency, contract work, short-term employment, contingent work, independent contractors (see Kalleberg [2000] for definitions and discussion).

2 According to the labour market segmentation theory, flexible contracts are associated with low wages (Reich, Gordon, and Edwards 1973).

3 It should be noted that the country adhered to this model later than other Mediterranean countries (Italy and Greece) but slightly before Spain (Eurydice 2007).

4 Source: UNESCO Institute for Statistics: http://uis.unesco.org/.

5 Source: https://www.pordata.pt/.

6 As reported, we concentrate our study on the transition stage. Young adults face different challenges, notably women for whom ‘interruptions in career for family and child caring become important’ (Russell, Smyth, and O'Connell 2010, 18). Furthermore, this helps us examine some ‘temporary stop-gap jobs’ (Russell, Smyth, and O'Connell 2010) that graduates often accept at the first stage of their employment.

7 See in Table 4 the coefficient of Precarious and λ(Precarious): −0.202 + 0.154 in the outcome equation.

Additional information

Funding

This work was financed by Portuguese funds through FCT- Foundation for Science and Technology in the framework of the [project number 030016], ‘BRIGHET- Bringing together Higher Education, Training, and Job Quality’. Reference: PTDC/SOC-SOC/30016/2017.