IDEAS home Printed from https://ideas.repec.org/a/spr/izalpo/v5y2016i1d10.1186_s40173-016-0070-0.html
   My bibliography  Save this article

The changing graduate labour market: analysis using a new indicator of graduate jobs

Author

Listed:
  • Francis Green

    (UCL Institute of Education)

  • Golo Henseke

    (UCL Institute of Education)

Abstract

This paper examines differentiation in the recent evolving graduate labour market in Britain. Using a novel statistically derived indicator of graduate jobs, based on job skill requirements in three-digit occupations obtained from the British Skills and Employment Survey series, we analyse trends in the labour market between 1997/2001 and 2006/2012. The indicator performs better than other indicators in validation tests, could be applied flexibly in other contexts, and is available in the Additional file 1. We find that the massive influx of graduates into the labour force has been absorbed with no increase in overeducation. However, the returns to graduation have become more dispersed, with those at the upper quartile of the residual distribution increasing, while those at the lowest quartile have fallen. The wage gap between matched and overeducated graduates increased by 11 log points. Using the British Household Panel Study, we find that the persistence of overeducation status did not change but for non-employed male graduates moving into employment, the chances of entering a graduate job decreased. JEL Classification: J21, J24, J3

Suggested Citation

  • Francis Green & Golo Henseke, 2016. "The changing graduate labour market: analysis using a new indicator of graduate jobs," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-25, December.
    • Handle: RePEc:spr:izalpo:v:5:y:2016:i:1:d:10.1186_s40173-016-0070-0
    DOI: 10.1186/s40173-016-0070-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s40173-016-0070-0
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s40173-016-0070-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rabe-Hesketh, Sophia & Skrondal, Anders, 2013. "Avoiding biased versions of Wooldridge’s simple solution to the initial conditions problem," Economics Letters, Elsevier, vol. 120(2), pages 346-349.
    2. Hugo Figueiredo & Pedro Teixeira & Jill Rubery, 2011. "Is Mass Higher Education Working? An Update and a Reflection on the Sustainability of Higher Education Expansion in Portugal," Working Papers 14, AlmaLaurea Inter-University Consortium.
    3. Arnaud Chevalier & Joanne Lindley, 2009. "Overeducation and the skills of UK graduates," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 172(2), pages 307-337, April.
    4. David Autor & David Dorn, 2009. "This Job Is "Getting Old": Measuring Changes in Job Opportunities Using Occupational Age Structure," American Economic Review, American Economic Association, vol. 99(2), pages 45-51, May.
    5. Paul Beaudry & David A. Green & Benjamin M. Sand, 2016. "The Great Reversal in the Demand for Skill and Cognitive Tasks," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 199-247.
    6. Britta Matthes & Bernhard Christoph & Florian Janik & Michael Ruland, 2014. "Collecting information on job tasks—an instrument to measure tasks required at the workplace in a multi-topic survey [Die Erfassung von Job-Tasks in persönlichen Befragungen. Ein neues Instrument z," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(4), pages 273-297, December.
    7. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54, January.
    8. Green, Francis, 2013. "Skills and Skilled Work: An Economic and Social Analysis," OUP Catalogue, Oxford University Press, number 9780199642854.
    9. Longhi, Simonetta & Brynin, Malcolm, 2010. "Occupational change in Britain and Germany," Labour Economics, Elsevier, vol. 17(4), pages 655-666, August.
    10. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, July.
    11. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    12. Carroll, David & Tani, Massimiliano, 2013. "Over-education of recent higher education graduates: New Australian panel evidence," Economics of Education Review, Elsevier, vol. 32(C), pages 207-218.
    13. Joseph G. Altonji & Erica Blom & Costas Meghir, 2012. "Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 185-223, July.
    14. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
    15. Neumark, David & Johnson, Hans & Mejia, Marisol Cuellar, 2013. "Future skill shortages in the U.S. economy?," Economics of Education Review, Elsevier, vol. 32(C), pages 151-167.
    16. Hugo Figueiredo & Pedro Teixeira & Jill Rubery, 2013. "Unequal futures? Mass higher education and graduates' relative earnings in Portugal, 1995--2009," Applied Economics Letters, Taylor & Francis Journals, vol. 20(10), pages 991-997, July.
    17. Richard R. Verdugo & Naomi Turner Verdugo, 1989. "The Impact of Surplus Schooling on Earnings: Some Additional Findings," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 629-643.
    18. Kiersztyn, Anna, 2013. "Stuck in a mismatch? The persistence of overeducation during twenty years of the post-communist transition in Poland," Economics of Education Review, Elsevier, vol. 32(C), pages 78-91.
    19. Peter A. Riach & Judith Rich, 2010. "An Experimental Investigation of Age Discrimination in the English Labor Market," Annals of Economics and Statistics, GENES, issue 99-100, pages 169-185.
    20. Christina Gathmann & Uta Schönberg, 2010. "How General Is Human Capital? A Task-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 1-49, January.
    21. Peter Gottschalk & Michael Hansen, 2003. "Is the Proportion of College Workers in Noncollege Jobs Increasing?," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 409-448, April.
    22. P. J. Sloane & H. Battu & P. T. Seaman, 1999. "Overeducation, undereducation and the British labour market," Applied Economics, Taylor & Francis Journals, vol. 31(11), pages 1437-1453.
    23. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    24. Gianni Betti & Antonella D’Agostino & Laura Neri, 2011. "Educational Mismatch of Graduates: a Multidimensional and Fuzzy Indicator," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 103(3), pages 465-480, September.
    25. Baert, Stijn & Cockx, Bart & Verhaest, Dieter, 2013. "Overeducation at the start of the career: Stepping stone or trap?," Labour Economics, Elsevier, vol. 25(C), pages 123-140.
    26. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    27. Mavromaras, Kostas & McGuinness, Seamus, 2012. "Overskilling dynamics and education pathways," Economics of Education Review, Elsevier, vol. 31(5), pages 619-628.
    28. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 843-881.
    29. Francis Green & Yu Zhu, 2010. "Overqualification, job dissatisfaction, and increasing dispersion in the returns to graduate education," Oxford Economic Papers, Oxford University Press, vol. 62(4), pages 740-763, October.
    30. Lindley, Joanne & Machin, Stephen, 2014. "Spatial changes in labour market inequality," Journal of Urban Economics, Elsevier, vol. 79(C), pages 121-138.
    31. Francis Green, 2012. "Employee Involvement, Technology and Evolution in Job Skills: A Task-Based Analysis," ILR Review, Cornell University, ILR School, vol. 65(1), pages 36-67, January.
    32. Cardoso, Ana Rute, 2007. "Jobs for young university graduates," Economics Letters, Elsevier, vol. 94(2), pages 271-277, February.
    33. Matthes, Britta & Christoph, Bernhard & Janik, Florian & Ruland, Michael, 2014. "Collecting information on job tasks - an instrument to measure tasks required at the workplace in a multi-topic survey," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 47(4), pages 273-297.
    34. Nigel O’Leary & Peter Sloane, 2016. "Too many graduates? An application of the Gottschalk–Hansen model to young British graduates between 2001–2010," Oxford Economic Papers, Oxford University Press, vol. 68(4), pages 945-967.
    35. McGuinness, Seamus & Bennett, Jessica, 2007. "Overeducation in the graduate labour market: A quantile regression approach," Economics of Education Review, Elsevier, vol. 26(5), pages 521-531, October.
    36. Elias, Peter & McKnight, Abigail, 2001. "Skill Measurement in Official Statistics: Recent Developments in the UK and the Rest of Europe," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 508-540, July.
    37. Francis Green & Steven McIntosh, 2007. "Is there a genuine under-utilization of skills amongst the over-qualified?," Applied Economics, Taylor & Francis Journals, vol. 39(4), pages 427-439.
    38. Salvatori, Andrea, 2018. "The anatomy of job polarisation in the UK," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages 1-8.
    39. Paul Sullivan, 2009. "Estimation of an Occupational Choice Model when Occupations are Misclassified," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    40. Hon‐Kwong Lui & Wing Suen, 2005. "The Shrinking Earnings Premium for University Graduates in Hong Kong: The Effect of Quantity or Quality?," Contemporary Economic Policy, Western Economic Association International, vol. 23(2), pages 242-254, April.
    41. Mark Hoekstra, 2009. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 717-724, November.
    42. Korpi, Tomas & Tåhlin, Michael, 2009. "Educational mismatch, wages, and wage growth: Overeducation in Sweden, 1974-2000," Labour Economics, Elsevier, vol. 16(2), pages 183-193, April.
    43. Geoff Mason & Gareth Williams & Sue Cranmer, 2009. "Employability skills initiatives in higher education: what effects do they have on graduate labour market outcomes?," Education Economics, Taylor & Francis Journals, vol. 17(1), pages 1-30.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michela Vecchi & Maja Savic & Marina Romiti, 2021. "Skill mismatch among UK graduates," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2021-11, Economic Statistics Centre of Excellence (ESCoE).
    2. Francis Green & Golo Henseke, 2021. "Europe’s evolving graduate labour markets: supply, demand, underemployment and pay," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-13, December.
    3. Luca Cattani & Giovanni Guidetti & Giulio Pedrini, 2018. "Overeducation among Italian graduates: do different measures diverge?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 491-521, August.
    4. Michela Vecchi & Catherine Robinson & Maja Savic & Marina Romiti, 2023. "Vertical and Horizontal Mismatch in the UK: Are Graduates' Skills a Good Fit for Their Jobs?," National Institute of Economic and Social Research (NIESR) Discussion Papers 548, National Institute of Economic and Social Research.
    5. Maarten Goos & Melanie Arntz & Ulrich Zierahn & Terry Gregory & Stephanie Carretero Gomez & Ignacio Gonzalez Vazquez & Koen Jonkers, 2019. "The Impact of Technological Innovation on the Future of Work," JRC Working Papers on Labour, Education and Technology 2019-03, Joint Research Centre.
    6. Golo Henseke, 2019. "Against the Grain? Assessing Graduate Labour Market Trends in Germany Through a Task-Based Indicator of Graduate Jobs," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(2), pages 809-840, January.
    7. Damian Grimshaw & Marcela Miozzo, 2021. "Human Capital and productivity: a call for new interdisciplinary research," Working Papers 006, The Productivity Institute.
    8. Elodie Andrieu & Malgorzata Kuczera, 2023. "Minimum Wage and Skills -Evidence from Job Vacancy Data," Working Papers 034, The Productivity Institute.
    9. Claire Callender & Kevin J. Dougherty, 2018. "Student Choice in Higher Education—Reducing or Reproducing Social Inequalities?," Social Sciences, MDPI, vol. 7(10), pages 1-28, October.
    10. Benny, Liza & Bhalotra, Sonia & Fernández, Manuel, 2021. "Occupation flexibility and the graduate gender wage gap in the UK," ISER Working Paper Series 2021-05, Institute for Social and Economic Research.
    11. Wenchao Jin, 2022. "Occupational polarisation and endogenous task-biased technical change," Working Paper Series 0622, Department of Economics, University of Sussex Business School.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Green, Francis & Henseke, Golo, 2021. "Europe's evolving graduate labour markets: supply, demand, underemployment and pay," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-2.
    2. Andrea Salvatori, 2018. "The anatomy of job polarisation in the UK," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-15, December.
    3. Meroni, Elena Claudia & Vera-Toscano, Esperanza, 2017. "The persistence of overeducation among recent graduates," Labour Economics, Elsevier, vol. 48(C), pages 120-143.
    4. Golo Henseke, 2019. "Against the Grain? Assessing Graduate Labour Market Trends in Germany Through a Task-Based Indicator of Graduate Jobs," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(2), pages 809-840, January.
    5. David Boto-García & Marta Escalonilla, 2022. "University education, mismatched jobs: are there gender differences in the drivers of overeducation?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 861-902, October.
    6. Sudipa Sarkar, 2017. "Employment polarization and over-education in Germany, Spain, Sweden and UK," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 435-463, August.
    7. Inmaculada Garc�a-Mainar & V�ctor M. Montuenga-G�mez, 2017. "Subjective educational mismatch and signalling in Spain," Documentos de Trabajo dt2017-03, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    8. Marco Pecoraro, 2014. "Is There Still a Wage Penalty for Being Overeducated But Well-matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort," LABOUR, CEIS, vol. 28(3), pages 309-337, September.
    9. Raquel Sebastian, 2018. "Explaining job polarisation in Spain from a task perspective," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 9(2), pages 215-248, June.
    10. Koomen, Miriam & Backes-Gellner, Uschi, 2022. "Occupational tasks and wage inequality in West Germany: A decomposition analysis," Labour Economics, Elsevier, vol. 79(C).
    11. Sara Flisi & Valentina Goglio & Elena Claudia Meroni & Margarida Rodrigues & Esperanza Vera-Toscano, 2017. "Measuring Occupational Mismatch: Overeducation and Overskill in Europe—Evidence from PIAAC," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(3), pages 1211-1249, April.
    12. Hanan Morsy & Adamon N. Mukasa, 2020. "‘Mind the mismatch?’ Incidence, drivers, and persistence of African youths' skill and educational mismatches," African Development Review, African Development Bank, vol. 32(S1), pages 5-19, November.
    13. Juan Acosta-Ballesteros & María del Pilar Osorno-del Rosal & Olga María Rodríguez-Rodríguez, 2018. "Overeducation of Young Workers in Spain: How Much Does the First Job Matter? Social Indicators Research," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(1), pages 109-139, July.
    14. Antonio Di Paolo & Ferran Mañé, 2014. "Are we wasting our talent? Overqualification and overskilling among PhD graduates," Working Papers XREAP2014-06, Xarxa de Referència en Economia Aplicada (XREAP), revised Jun 2014.
    15. Luca Cattani & Giovanni Guidetti & Giulio Pedrini, 2018. "Overeducation among Italian graduates: do different measures diverge?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 491-521, August.
    16. Cavaglia, Chiara & Etheridge, Ben, 2020. "Job polarization and the declining quality of knowledge workers: Evidence from the UK and Germany," Labour Economics, Elsevier, vol. 66(C).
    17. Theo Sparreboom & Alexander Tarvid, 2016. "Imbalanced Job Polarization and Skills Mismatch in Europe," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(1), pages 15-42, July.
    18. Daniela Rohrbach-Schmidt & Michael Tiemann, 2016. "Educational (Mis)match and skill utilization in Germany: Assessing the role of worker and job characteristics [Qualifikatorisches (Mis)matching und die Ausnutzung von fachlichen Kenntnissen und Fäh," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(2), pages 99-119, October.
    19. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2018. "Skills Mismatch: Concepts, Measurement And Policy Approaches," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 985-1015, September.
    20. Etheridge, Ben & Cavaglia, Chiara, 2017. "Job polarization, task prices and the distribution of task returns," ISER Working Paper Series 2017-09, Institute for Social and Economic Research.

    More about this item

    Keywords

    Higher education; Wages; Skills; Overeducation; Tertiary education;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:izalpo:v:5:y:2016:i:1:d:10.1186_s40173-016-0070-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.