Over-education in the Graduate Labour Market - Essay Example

Over-education in the Graduate Labour Market Over-education in the Graduate Labour Market Introduction: What is “over-education”? Over-education refers to a situation whereby a person holds a job for which they are overqualified (Zhai & Zhao, 2012). Thus, when used in the context of the graduate labour market, the term implies that degree holders are employed in jobs whose skills requirements are much lower than the skills they have acquired at college or university. Put in another way, the graduate is underemployed. For instance, a holder of a degree in electrical engineering who works as a salesperson of cars can be described as being underemployed. A person does not require a degree in engineering to sell cars. The skills of such a person would be better utilized if they were employed in a company that manufactures electrical appliances. This paper analyzes the incidence of over-education in the UK graduate labour market. By incidence is meant the extent or degree of over-education in this segment of the UK labour force. The author intends to effect the analysis by critically assessing scholarly literature on the topic. The analysis will be done under different headings such as the causes of over-education, whether or not over-education is a temporary development, the UK graduate labour market and the effect of over-education on job satisfaction. Thereafter, the author will draw conclusions based on their analysis. Causes of Over-education Scholars have advanced many reasons to explain why the citizens of a country may become over-educated. The two most cited reasons are skewed government policies(Department of Economics, University of Sheffield, 2009) and high levels of unemployment(Zhiwei, 2013). In its efforts to enhance access to higher education,the government may open the doors of higher education so wide that everyone goes through. A common way by which governments around the world accomplish their goal of making higher education more accessible is by transforming middle-level colleges and technical training institutes into universities. Unfortunately, the same governments do not step up efforts to create employment opportunities to match the rising number of graduates. The result is often a flooded job market where, in desperation, the graduates snap any job that comes their way. On unemployment, research has shown that sustained high rates of employment tend to induce fear in people(Zhiwei, 2013). As a result, they grab any available opportunity for higher education, hoping that once armed with a degree(s), they will be able to escape from the snare of joblessness. Because many people make the same moves, the end result is an educated population that cannot find gainful work to do. The degree to which these two factors lead (or have led) to over-education in the UK cannot be ascertained from the literature accessed by the writer. This could be an indicator that much needs to be done in terms of investigations into the causes of over-education in the country. Perhaps the factor that best explains the occurrence of over-education in the UK is the mismatch between the training that universities offers and the skills that employers demand of graduates(Pietro & Urwin, 2003). This is not a new discovery; it has been a well-known fact for several years, both to educationists and government policy makers on the one hand and employers on the other. It’s interesting that even the solution to this problem is known: institutions of higher learning, government policy makers and employers must work together, first to determine industry-specific needs, then to develop courses that address those needs. Yet for years this is not happening. The reason is unclear. Over-education as a Short-term Phenomenon Many educationists believe that the over-education is a short-lived stage in the career life of a graduate(Dolton & Vignoles, 2001). They maintain that the scenario of degree-holders working in jobs that do not require a degree is brought about by seasonal shifts in the labour market. In the long-run, they argue, the graduate will eventually find a job where they can use their skills fully. Consequently, they encourage graduates to be patient in the job market. Part of that patience entails them accepting jobs they are over-qualified in the hope that in the longer term, they will secure the right jobs. The problem with the view of academicians is that first, they do not define these “temporary shifts” in the job market (Rafferty & Dale, 2008). In fact, that statements comes out as an excuse for them not to face the realities of the job market. Besides, they tend to ignore the fact that life in the UK continues to be more expensive by the day. This means that every single day a graduate spends in a job they are over-qualified, and therefore underpaid, they are struggling to make ends meet. Some scholars are of the view that universities must accept that they are offering courses that employers have no need of. The solution is for them to review their course offerings to match industry-specific needs. That is the best way they can give value for taxpayers’ money that the government sinks into higher education every year. The UK Graduate Labour Market The graduate market has been growing steadily over the last several decades(Brown & Smetherham, 2004). This growth has been fostered by the government’s increasing funding to higher education on the basis of economics. The government and the general public have assumed that employers are demanding highly skilled workers, and that, overall, graduates earn more with their counterparts without university education. However, research has poked holes into the government’s assumptions about linkages between education, jobs and pay. For instance, in 2003research found that many graduates would earn significantly less than they expected. On average, graduates hoped to earn approximately 19,000 Sterling pounds in their first job after campus. This was against the Higher Education Statistical Agency (HESA) average of 17,000 pounds. This figure has since increased to an average of 29,000 pounds in 2013 (High Fliers Research, 2013). In view of existing evidence, the government will need to review its policies that govern funding for higher education to bring them in line with existing reality. It is high time the government stops investing in the sub-sector based on euphoria and assumptions. Employers are increasingly getting concerned that they cannot find graduates with the desired level of technical skills required by industries. This is partly so because, over the years, the government has focused more on university education while ignoring vocational and technical training(Dolton & Silles, 2011). The Incidence of Over-education in the UK Graduate Labour Market The phenomenon of over-education is unevenly distributed among graduates, both geographically and by industry(Hanushek, et al., 2011). Those graduates with degrees with specialist degrees are less likely to be over-educated than their colleagues with more general courses. It has also been said that the incidence of over-education varies significantly across different parts of the UK. However, no empirical evidence has been put forward thus far to support those claims. The fact that the more general degree courses tend to lead to under-employed graduates means that the government and universities will have to collaborate closely with industry in order to develop programmes that industry demands. However, collaboration has proved to be a hard nut to crack. The tendency is for educationists to design programmes they believe are “marketable”(Taylor, et al., 2006). Universities then go ahead and offer these courses only for the graduates to come to realize that employers have no need for their skills. As a matter of urgency, universities must seriously start working with employers in order to determine what skills and competencies are desired in the labour market. Still, the mismatch between education and industry has been fueled by the notion among educationists that the UK is increasingly becoming a knowledge economy. However, no evidence supports that notion in most parts of the UK such as Wales (Dolton & Silles, 2011). Over-education and Job Satisfaction Job satisfaction refers to the sense of fulfilment that a person draws from their job (Dolton & Silles, 2011). In an ideal situation, a person ought to find enjoyment in their work. However, over-education tends to erode job satisfaction. This is especially so because, the under-employed person earns much less than they believe they deserve based on their training. An employee who is not satisfied with their work is less productive than their counterpart who is employed in the right job they trained for. Thus, over-education is a negative phenomenon both for the employer and the worker, hence the need to ensure that universities and colleges provide only the training in skills demanded by employers. Implications for Universities and Government Policy Makers The phenomenon of over-education has several implications for both universities and government policy makers. Universities have to review their courses to ensure that those courses meet the needs of the labour market(Wilton, 2011). That review will entail them working with practitioners in various industries to find out with them. However, it will be important that the universities do due diligence to ascertain that the needed identified by practitioners are felt needs that will hold for a long time to come. Otherwise, they will develop courses only to realize that the need they were meant to meet were temporary and no longer exist. Research and development (R & D) is a well-developed practice in the corporate world. Prior to launching a new product, a lot of resources are spent on market research and the design of the product. The role of market research is to establish the adequacy of demand for the product to make it profitable in the longer term. Whereas R & D does not guarantee the success of a product, it does significantly increase the chances of it doing well. It not clear to what extent universities undertake R & D prior to introducing new courses, if at all they do (McGuinness & Sloane, 2009). On their part, government policy makers must stop placing undue emphasis on university education to the detriment of technical and vocational training. For any country to develop and sustain that development, it needs all cadres of workers – technical, skilled, semi-skilled, unskilled and vocational(Campbell, 2013). Paying too much emphasis on one cadre and ignoring the others is neither prudent nor sustainable. In addition, as already seen, employers are already raising the alarm that graduates do not possess the relevant technical skills the employers need. This is a clear sign that the government should move with speed to rejuvenate technical training through policy and other measures. Secondly, government policy makers must require and enforce the requirement that universities work with professional bodies in designing their degree programs(Chevalier & Lindley, 2007). This is the surest means by which to endthedisconnect between education and the labour market. Hence over-education. Otherwise, the proliferation of programmes that help no one but the universities will continue to worsen an already bad situation. However, such a policy must safeguard the universities from being arm-twisted by employers into providing programmes that they cannot sustain in the long term for lack of demand. As things stand today, it appears that there is very little synergy between universities and employers, such that universities offer courses they believe employers demand. In the end, the victim is the graduate who discovers soon after they graduate that they have a degree no employer is interested in. Conclusion Over-education in the UK graduate job market is a reality we must face as a country. Arguably, the mismatch between education and the labour market is the main culprit behind this problem. Over-education is estimated to be a nation-wide problem. However, its distribution across the country is not well documented. Nevertheless, over-education remains a problem to graduates, employers, universities, the government and the economy as a whole. There is an urgent need for synergy among the government, universities and employers. Otherwise, no single entity can solve the problem single-handedly. References Brown , P. & Smetherham, C., 2004. The Changing Graduate Labour Market: A Review of the Evidence, London: Cardiff University. Campbell, S., 2013. Over-education among A8 Migrants in the UK, London: University of London. Chevalier, A. & Lindley, J., 2007. Over-educarion and the Skills of UK Graduates, London: Cenre for the Economics of Education. Department of Economics, University of Sheffield, 2009. A Panel Data Analysis of the Incidence and Impact of Overeducation, London: University of Sheffield. Dolton , P. & Silles, M., 2011. Over-education in the Graduate Labour Market: Some Evidence from Alumni Data, London: Centre for the Economics of Education(CEE). Dolton , P. & Vignoles, A., 2001. The Incidence and Effects of Over-education in the UK Graduate Labour Market. Economics of Education Review, 19(2), pp. 179-198. Hanushek, E., Machin, S. & Woessmann, L., 2011. Over-education and Mismatch in the Labour Market. In: G. Becker, ed. Hndbooks in Economics: Volume 4. Amsterdam: Elsevier, pp. 283-326. High Fliers Research, 2013. The graduate Market in 2013, London: High Fliers Research. McGuinness, s. & Sloane, P., 2009. Labour Market Mismatch Among UK Graduates:, Bonn: Institute for the Study of Labour: An Analysis Using FEFLEX Data. Pietro, G. & Urwin, P., 2003. Education and Skills Mismatch in the Italian Labour Market, Italy: University of Westminister. Rafferty, A. & Dale, A., 2008. Ethnic Differences in Graduate Over-education in the UK, Manchester: Cathie Marsh Centre for Census and Survey Research. Taylor, S., Ranyard , R. & Charlton , J., 2006. Graduate Entry into the UK labour Market: Demographic Differences in Perceptions of Disadavntage, Bolton: University of Bolton. Wilton, N., 2011. Do Employability Skills Really Matter in the UK Graduate Labour Market? The Case of Business and Management Graduates. Work Employment and Society, 25(1), pp. 85-100. Zhai, L. & Zhao, W., 2012. Education and Economic Growth: Schooling Quantity and Quality Efffect on GDP Level and Economic Growth, Vasteras: Malardalen University. Zhiwei, C., 2013. Analysis of RReasons and Countermeasures of the College Students Relative Over-education. Journal of Chngsha Aeronautical Vocational and Technical College, 6(2), pp. 13-24. Read More