Abstract
A large matched employer–employee data set on the Portuguese economy is used to analyse gross job creation and job destruction for university graduates, compared to other groups of workers. Standard measures of gross job flows are computed, and variance decomposition is used to check whether idiosyncratic shocks or aggregate and sectoral shocks can account for the time variation in gross job flows, for schooling groups separately. Results indicate that the market for university graduates has expanded much more than that for undergraduates, and that idiosyncratic shocks are more relevant driving job flows for university graduates than for nongraduates. No support is therefore found for the pessimistic view that states that the expansion of higher education may have gone too far.
Acknowledgements
This study was prepared under project PRAXIS/P/ECO/13014/1998 funded by Fundação para a Ciência e a Tecnologia. We are grateful to the Ministry of Employment, Department of Statistics, for access to the dataset Quadros de Pessoal and to Vítor Andrade from newspaper Expresso for the data on announced job offers.
Notes
1 It is therefore possible to compute the measure for new firms and for those going out of business (achieving the values +2 and −2, respectively). Values between −1 and +1 correspond approximately to the traditional percent increase in employment.
2 Part of the detected homogeneity in firm behaviour when it comes to job changes for the undergraduates may result from the fact that we are dealing with a broader group of workers, and therefore mechanisms of compensation within the firm may operate. Note the example of a firm that may contract its employment level for workers holding 4 years of education, while expanding it for workers with 9 years of education. In such a case, overall employment for undergraduates could remain stable, and neither job creation nor destruction would be captured.