9 February 2018

Demand for graduates is outstripping supply in Germany, study shows

A new study into the graduate labour market in Germany between 1999-2012 by Dr Golo Henseke has found that during this time there were more graduate jobs than graduates to fill them.

Young graduates (aged 25-34) saw a slightly declining underemployment rate and the difference in earnings between graduates and non-graduates increased for young men, according to the study.

In contrast to the UK, a much smaller proportion of Germans hold a graduate degree and a smaller percentage of the labour force is employed in graduate jobs. Nevertheless, the proportion of graduates aged 25-34 rose among both men and women between 1999 and 2012.

By 2012, graduate jobs constituted almost a third of all jobs for the young workforce in Germany. At the same time, only around one in five workers holds a university degree.

The study reveals gender differences in graduate employment. While the difference in earnings between graduates and non-graduates rose sharply among men, the wage gap between female graduates and non-graduates did not increase. In addition, while underemployment among both young male and young female graduates fell slightly, older female graduates (aged 35-54) experience above average rates of underemployment.

The difference between the wages of graduates in graduate jobs and those in non-graduate jobs remained stable during the period studied.

The supply of graduates in the labour force is likely to expand further and to become increasingly diverse, according to Dr Golo Henseke from the Centre for Global Higher Education at the UCL Institute of Education, the author of the study.

Dr Henseke highlights a number of risk factors to the demand for high-level skills and concludes that future trends are uncertain. He warns that developments in information and communication technology, automation and the global expansion of graduate labour could all have a negative impact on graduate jobs.

Dr Henseke said:

‘At a time when graduate underemployment is a widespread concern, this evidence points towards a rising demand for graduates in Germany. Although Germany has seen a slower expansion of its higher education sector than the UK, the results emphasise the need for a strategy to ensure a match between graduates and appropriately skilled jobs. This emerges not only from this research, but is supported by our ongoing Centre for Global Higher Education investigation of graduate labour market trends across Europe.’

Against the grain? Assessing graduate labour market trends in Germany through a task-based indicator of graduate jobs is published by Social Indicators Research.