Graduate Over-Education in the UK

Individual copy price: £5 The Centre for the Economics of Education is an independent research centre funded by the Department of Education and Employment. The view expressed in this work are those of the authors and do not necessarily reflect the views of the Department of Education and Employment. All errors and omissions remain the authors. Executive Summary The UK has been the theatre of a dramatic shift in the production of graduates; during the past decade the proportion of a cohort attending tertiary education has increased from less than 15% in 1985 to more than 33% 10 years later. However, doubts have been raised whether the demand for graduates has kept up with the supply. Furthermore, claims have been made that a large proportion of graduates are employed in " sub-graduate jobs " , that is graduates are over-educated for the tasks required to do their job. Over-education would indicate that a tremendous amount of p ublic money is wasted subsidising higher education. Thus, estimating the extent and effect of over-education is important, especially at a time when the debate on the financing of higher education is raging. Widening participation in education may lead to an increase in over-education for various reasons. Employers faced by a more qualified pool of candidates may have upgraded some traditionally non-graduate jobs. Alternatively they may recruit graduates for jobs that have basically stayed the same and do not require graduate skills, or as educational standards are commonly suspected to decrease overtime , upgrade their qualification requirements to select candidates with the appropriate skills. Moreover, the increased participation in tertiary education has depleted the pool of well-qualified 16 year-old school leavers, thus employers may consider low ability graduates as an adequate substitute. However, it is suspected that widening the access to higher education has increased the heterogeneity of the skills of the new graduates entering the labour market. Hence, previous measures of over-education may have overestimated the true extent of the phenomenon, as some graduates are not endowed with the skills required to obtain a graduate job. After reviewing the literature on over-education, this paper proposes an alternative measure of over-education based on occupation and job satisfaction, more precisely, whether the graduate is satisfied with the match between her education and her occupation. Graduates in a sub-graduate occupation who are satisfied are defined as apparently over-educated, whereas those who are dissatisfied are called genuinely …