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Jobs for Young University Graduates: Is It Worth Having a Degree?

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  • Cardoso, Ana Rute

    () (IAE Barcelona (CSIC))

Abstract

This study addresses the question: Are workers who hold a university degree increasingly filling job openings meant for people with lower levels of schooling? It focuses on Portugal, where the higher education system has been expanding at a fast pace and the share of university graduates in total labour force has been increasing, but where the unemployment rate for such workers has also been increasing. The analysis relies on a remarkable dataset covering the entire workforce in manufacturing and services private sectors, to implement the conceptual framework developed by Gottschalk and Hansen (2003). Results indicate that the university wage premium increased and the proportion of university graduates working in non-university jobs declined sharply over time. Therefore, no support is found for the skepticism over investment in higher education. Results are consistent with the idea that skillbiased technological progress taking place in some sectors raises the productivity of workers with higher schooling levels, thus raising their wages, which attracts new workers with high qualifications.

Suggested Citation

  • Cardoso, Ana Rute, 2004. "Jobs for Young University Graduates: Is It Worth Having a Degree?," IZA Discussion Papers 1311, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1311
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    References listed on IDEAS

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    1. Machin, Stephen, 1996. "Wage Inequality in the UK," Oxford Review of Economic Policy, Oxford University Press, vol. 12(1), pages 47-64, Spring.
    2. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    3. 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.
    4. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    5. repec:sae:niesru:v:166:y::i:1:p:87-96 is not listed on IDEAS
    6. Kiker, B. F. & Santos, Maria C., 1991. "Human capital and earnings in Portugal," Economics of Education Review, Elsevier, vol. 10(3), pages 187-203, September.
    7. Hartog, Joop & Oosterbeek, Hessel, 1988. "Education, allocation and earnings in the Netherlands: 0verschooling?," Economics of Education Review, Elsevier, vol. 7(2), pages 185-194, April.
    8. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    9. Mendes de Oliveira, M. & Santos, M. C. & Kiker, B. F., 2000. "The role of human capital and technological change in overeducation," Economics of Education Review, Elsevier, vol. 19(2), pages 199-206, April.
    10. Ana Rute Cardoso, 1999. "Firms' Wage Policies and the Rise in Labor Market Inequality: The Case of Portugal," ILR Review, Cornell University, ILR School, vol. 53(1), pages 87-102, October.
    11. Stephen Machin, 1998. "Recent shifts in wage inequality and the wage returns to education in Britain," National Institute Economic Review, National Institute of Economic and Social Research, vol. 166(1), pages 87-96, October.
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    Cited by:

    1. Mário Centeno & Álvaro Novo, 2014. "When supply meets demand: wage inequality in Portugal," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    2. Heshmati, Almas, 2007. "Labor Market Policy Options of the Kurdistan Regional Government," IZA Discussion Papers 3247, Institute for the Study of Labor (IZA).
    3. Quintini, Glenda & Martin, John P. & Martin, Sébastien, 2007. "The Changing Nature of the School-to-Work Transition Process in OECD Countries," IZA Discussion Papers 2582, Institute for the Study of Labor (IZA).
    4. World Demographic and Ageing Forum & Glenda Quintini & John P. Martin & Sébastien Martin, 2007. "The changing nature of the school-to-work transition process in OECD countries," Journal Article y:2007:i:1, World Demographic and Ageing Forum.

    More about this item

    Keywords

    higher education; youth; job creation; labour market trends;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I20 - Health, Education, and Welfare - - Education - - - General

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