Over-Education in the Graduate Labour Market: Some Evidence from Alumni Data

Abstract

authors and do not necessarily reflect the views of the Department of Education and Employment. All errors and omissions remain the authors. Executive Summary Over the last 25 years there has been a rapid expansion of UK higher education with dramatically increasing graduate numbers. Recent research has shown that a considerable proportion of graduates have attained more education than is required to do their jobs. At the same point in time, employers continue to complain that there is a shortage of highly skilled labour and wage inequality has continued to widen both within as well as between narrowly defined educational groups. This has raised concerns about the value of higher education and challenges the widely held belief that a university education is a good investment and a guarantee of economic success. In particular, we examine the graduate labour market in the UK using alumni data from one large civic university. There has been no complete theory on over-education in the literature- instead some potential explanations have been offered. Among the reasons advanced to explain overeducation are ability differences between similarly qualified workers and the career-related equivalence of qualifications. Since there is no formal division between career-related and