Managing Graduate Unemployment in Emerging Economies: Critical Analysis of the Skills Mismatch and Oversupply Theses

Graduate unemployment and its management are challenges that leaders of the economy, managers and policy analysts grapple with on a daily basis. As a result, economic leaders and managers of economies have sought theoretical explanations to guide their management strategies of graduate unemployment. Th ere are two competing theses to explain the problem: skills mismatch and skills oversupply. However, due to the seeming simplicity of basic tenets and policy implications of the skills mismatch thesis, many governments and laypersons have blamed graduate unemployment on it. Th is paper argues that policy solutions based entirely on skills mismatch may trigger another form of unemployment, oversupply of skilled graduates. Furthermore, oversupply of graduates is more likely to be the signifi cant cause of graduate unemployment than skills mismatch. An eff ective policy, therefore, is one that takes into account interventions to stimulate demand for labor while at the same time manages the supply of skilled labor. Such an approach will provide more sustainable solutions to graduate unemployment. In addition, the potential contributions of psychologists in the eff orts towards the management of graduate unemployment are also outlined.