Should we start worrying? Mass higher education, skill demand and the increasingly complex landscape of young graduates’ employment

Abstract

Recent decades have seen a massive expansion in higher education (HE), fuelled by high expectations about its private benefits. This has raised concerns about the impact on the employability of recent graduates and the potential mismatches between their skills and the competences required by the job structure. Equally, it could set the ground for a possible transformation of demand for graduate skills and the emergence of new employment profiles. In this article, data for Portugal for the period 2000–2010 were used to look at compositional changes in graduate employment and the incidence of three potential problems in graduates’ transition to the labour market: overeducation, overskilling and education–job mismatches. The implications of growing demand heterogeneity on increasing inequality in graduate labour markets and on the expectations supporting mass HE in a country that rapidly expanded access to tertiary education as a strategy to converge with the productivity levels of other more developed economies are discussed.

Keywords:

• education–job mismatches
• higher education
• overeducation
• overskilling
• Portugal

JEL Classification:

• I20
• J24
• J31

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Hugo Figueiredo http://orcid.org/0000-0002-4336-2533

Ricardo Biscaia http://orcid.org/0000-0001-5596-6564

Vera Rocha http://orcid.org/0000-0003-0227-7129

Pedro Teixeira http://orcid.org/0000-0002-7128-8238

Notes

1. The Portuguese Labour Force Survey (‘Inquérito ao Emprego’) is a large quarterly survey of a representative (random stratified) sample of all Portuguese residents. The final sample regularly includes more than 20000 observations spread over around 1400 residential areas.

2. The sample was constructed in order to account for about 1/6 of the graduates of that year with the final number of valid answers (645), however, corresponding to a success rate of approximately 11%.

3. The only significant (P-value < 0.10) difference found in the groups’ mean hourly wages is between Latent and Traditional Graduate Occupations. See also supplementary appendix Table 4.

4. The authors consider the ‘mastery of a specific field’, the ‘knowledge of other related fields’, ‘abstract, analytical thinking’ and the ‘ability to rapidly acquire new knowledge’ to construct an overall measure of academic skills.

5. Compared to other countries in the international REFLEX data, Portugal presents the lowest proportion of overeducation and overskilling. Also, Portugal, as of 2009, still had one of the lowest proportion of graduates both in the 25–64 (15%) and 25–34 (23%) age cohorts (OECD, 2011, p. 40), indicating that the level of massification in the Portuguese higher education system was still lower relative to other countries. Ultimately, however, we are interested in differences across job groups as to test whether changes in the occupational structure have the potential to increase inequality within graduate labour markets.

6. We do not show the data for traditional graduate jobs since there are very few of such workers who reported being overeducated.

Additional information

Funding

This work was supported by the Portuguese National Science Foundation (FCT) [Grant PEST-OE/CED/UI0757/2013].