Over-Education in the Graduate Labor Market, Research Paper Example

Executive Summary

The education in the UK has witnessed a number of changes over the past 20 years, with rising number of graduates. Many researches show that many of these graduates have higher education than is required by the jobs they are employed for. This has created a challenge on how to meet the required skills and at the same time offer the required level of knowledge.

There is a great inequality in the wage demand in the market and the available skills. In addition, there is a major notion that university education is a key investment for a brighter future. This has led to many questions about the value of higher education and the notion of university education holding key for future success.

This paper looks at the phenomenon of over-education; it causes and gives recommendations on what can be done to solve the problem.

Introduction

Over education is a situation where one is employed for a job for which his/her skills are underutilized and this means such a person possess higher skills than the job requires (Morrison, 2014, p.185). There is a constant rise in the number of graduates while the education skills and curricula keep changing. However, a slower change in the market and adoption of the ever-increasing number of graduates means they have to take jobs that they come across even if it means their skills are going to be underutilized.

The rise in education forms an important socio-economic factor in the present economic history. Most of the workers who already have jobs are continually upgrading their education levels and the university graduates from colleges are forced to take up jobs for which their skills are not required (Matkovi? & Kogan, 2014, p.115). At the intermediate level of skills, a huge gap is spread across all disciplines. The continued expansion of education has therefore elicited a heated debate on the value of university education and the popular saying that university education is an important requirement for one to achieve economic freedom.

Although the idea of over-education is not new, and affects many countries, there has never been a clear theory that seeks to explain the phenomena. Many researchers have pointed the downward mobility as the major cause and this has an impact of reducing investment on university education.

Occurrence of Over-education

Over-education refers to the discrepancy between the graduate skills and the required on-job skills. Over-education is not a new phenomenon in the UK and many researches has been done about over-education although none has clearly articulated major implications of this phenomenon. Many publications have pointed that in the UK, over 30% of graduates are over-educated, although all these analysis depended on self-assessment (Mason, Williams & Cranmer, 2009, p.27).

Previous research pointed out that over-education did not rise in the UK in nineties, and this has been validated by the fact that this did not happen worldwide despite a general increase in the levels of education. However, it was concentrated amongst lower workers. This probably suggested that over-education cannot be attributed solely to the mismatch between workers and education.

There is widely held notion that over-education is a temporary phenomena, as evidenced by pioneer studies concerning this phenomenon. However, this assumption does not hold water for every scenario and in particular; it is not true for UK (Livanos, 2010, p.480). The early studies pointed to the fact that the presence of friction in the market makes over-education a temporary occurrence. In contrary, some other researchers suggest that over-education can be permanent in some careers of some graduates, over a long period.

Conclusively, whether over-education is a permanent or a temporary occurrence the fact remains that there is a wide gap between the skills that graduates have and the skills that are needed in the industry. It is probably for this reason of a gap in skills that most graduates do not get job placements and this further compound the problem of over-education (Lindberg, 2014, p.267).

Causes of Over-education

Probably many factors cause over-education in the UK. When socio-economic and institutional factors had been controlled for by many research done on this phenomenon, over-education persisted. This then meant that other factors must be responsible for this occurrence. Studies then revealed that over-education is a consequence of other hidden factors that include variations in abilities and skills of graduates (Li, John Morgan, & Ding, 2008 p.690). This is shown from the fact that most over-educated graduates are matched to the jobs they initially qualify for. However, when other hidden heterogeneous factors such as skills and abilities are taken into account, they are penalized for that in terms of lower wages.

Some other schools of thought suggest that over-educated workers have skills that are of low demand in the market place. The consequence of having skills that are of low demand is that one will be forced to settle for a job that matches some of his/her skills, a result of which leads to underutilization of the skills belonging to such over-qualified individual (Leuze & Strauß, 2014). This shows that such graduates do not actually have less of the skills that are desirable but more of the undesired skills.

Moreover, other studies have explained the idea of over-education by using a mismatch in skills and a mismatch between acquired and required skills (Klein & Weiss, 2011, p.972). Studies done amongst the graduates in Netherlands have shown that mismatch between education and jobs does not directly relate to a mismatch between acquired and required skills amongst the graduates. These are in tandem with the results that more than half of the employees who were over-educated reported that they used most of the skills that they have in their daily-to-daily job activities.

Finally, the other major cause of over-education stem from the fact that some courses in the universities are over-represented in terms of numbers of the students who enroll in them, this consequently leads to more graduates in some fields than the others (Rérat, 2014, p.72). The main reason behind this would be the applicability and marketability of such courses in modern industrial settings. Some courses offer less job opportunities in the industry than others do and this leads to many students enrolment in such disciplines. This is in line with the widely held notion that university education is a prerequisite for success and economic advancement in one’s life (Zorlu, 2012).

Impact of Over-education on Individuals, Universities and Government

Over-education can be a burden to both the government and individuals and its impact cuts across all the sectors of economy. Over-education has major impact on policy creation in the education and other allied industries and sectors (Jackson, 2014, p.145). Over-education has a major impact on wages since skills determines the wages, as this should always be commensurate to the level of skills a graduate has. Studies have revealed that over-educated graduates are always paid less than their skills can offer. This is particularly true for first job opportunity that such graduates get, a fact attributed to mismatch in skills.

The other major impact of over-education is job dissatisfaction and lack of motivation to work (Hermannsson et al, 2014, p. 480). Over-education has been defined as a situation where an individual has more skills than the skills required for the same job category. Although studies show that such individuals accepts such job opportunities in order to further their career, this shows that necessity is a major factor (Dolton & Silles, 2008, p.130). However, this may be due to job unavailability that plays a role in one choosing a job that does not match his/her level of skills. Either way, this has an impact of creating job dissatisfaction where such individuals feel that they are earning less or they are not fully realizing their potential to produce more due to limited resources or lower wages (Potestio, 2014, p.550).

Finally, over-education affects government policy creation and productivity. Studies have revealed that education attainment is directly proportional to productivity and it is for this reason that over-education determines the creation of economic policies that are directed towards employment and industrial development (Bredtmann & Otten, 2014). The impact of over-education affects many stakeholders that include education, industrial development and budgetary allocation and revenue collection.

Conclusion

In conclusion, it is clear that over-education is a major socio-economic phenomenon. It affects all sectors of education and is worst in the arts and humanities. Over-education can be attributed to rapid growth in the skills gap compared to available opportunities in the market. The hidden heterogeneous factors such as skills and abilities between the individuals are major factors behind over-education in the UK.

Over-education affects policy creation in the education economy. Curricula development and unemployment form such policy areas that over-education affects (Allgood et al, 2011, p.780). There are no specific theories to explain over-education, however, some scholars point to economic restructuring as the cause, and that it is a short-term phenomenon.

Recommendations

There is need for the university education to be aligned to provide skills that are market oriented, through analysis of syllabus to ensure that the students gain relevant knowledge.

There is need to remove the notion that university education is a pre-requisite for success and economic investment. This will allow growth of other sectors of education including craftwork and other jobs that do not need one to attend university education.

There is need for clear policies to be developed to ensure that employment offers wages that are commensurate to the skills and this will ensure a match in skills and jobs thus eliminating over-education.

Industrial internships should be increased so that the graduates released into have the required skills. This will ensure such graduates are employed in the areas where their skills can be utilized fully.

There is need to encourage diversity in the courses that are being offered in the universities. It is worth noting that some courses are over-represented in terms of number of students taking those courses and this produces many students under such disciplines and this further compound to the problem of over-education.

Graduates need to be encouraged to be innovative and use their skills to create jobs for themselves rather than look for employment.

References

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