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Should governments of OECD countries worry about graduate underemployment?

Green, GF; Henseke, G; (2016) Should governments of OECD countries worry about graduate underemployment? Oxford Review of Economic Policy , 32 (4) pp. 514-537. 10.1093/oxrep/grw024. Green open access

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Abstract

To assess potential public concerns, this paper examines theory and evidence surrounding graduate educational underemployment (overeducation) in this era of mass higher education. Using a new, validated, index of graduate jobs, we find that the prevalence of graduate underemployment across 21 countries is correlated with the aggregate supply–demand imbalance, but not with indicators of labour market flexibility. Underemployment’s association with lower job satisfaction and pay is widespread. Yet in most countries there are external benefits (social trust, volunteering, and political efficacy) associated with higher education, even for those who are underemployed. Taken together with existing studies we find that, in this era of mass higher education participation, under-employment is a useful indicator of the extent of macroeconomic disequilibrium in the graduate labour market. We conclude that governments should monitor graduate underemployment, but that higher education policy should be based on social returns and should recall higher education’s wider purposes.

Type: Article
Title: Should governments of OECD countries worry about graduate underemployment?
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/oxrep/grw024
Publisher version: http://dx.doi.org/10.1093/oxrep/grw024
Language: English
Additional information: © The Authors 2016. Published by Oxford University Press. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
Keywords: Higher education, overeducation, mismatch, wages, skills, social returns
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > School of Education
UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education
UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education > IOE - Education, Practice and Society
URI: https://discovery.ucl.ac.uk/id/eprint/1522165
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