Working Paper 3
Should governments of OECD countries worry about graduate over-education?
Published June 2016

Professor Francis Green and Dr Golo Henseke address public concerns about the graduate job market.

The current – and unprecedented – generalised expansion of higher education has led to an increase in highly educated workers. But how far can graduates find employment to match their education level, and should this be of concern to governments?

Professor Green and Dr Henseke examine theory and evidence surrounding graduate over-education. They argue that it is important to take over-education or underemployment seriously as an indicator of macro-economic disequilibrium in the graduate labour market. Yet it is equally important not to translate concern about over-education automatically into an argument against higher education.

They contend that the over-education debate, both in academic scholarship and public discourse, is too narrowly focused on the employment effects of higher education. Higher education leads to social benefits – such as social trust, volunteering and political efficacy. Yet these social benefits are mediated at best only partially through employment in a graduate job.

The instrumental orientation that sees the purpose of higher education as a route to good and secure employment appears to be widespread. The paper calls for higher education policy, in addition to looking at graduate employability, to be based on social returns, and to recall higher education’s wider purposes.