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

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  • 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
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    Cited by:

    1. 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.
    2. 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.
    3. Damian Grimshaw & Marcela Miozzo, 2021. "Human Capital and productivity: a call for new interdisciplinary research," Working Papers 006, The Productivity Institute.
    4. Elodie Andrieu & Malgorzata Kuczera, 2023. "Minimum Wage and Skills -Evidence from Job Vacancy Data," Working Papers 034, The Productivity Institute.
    5. Dickson, Matt & Donnelly, Michael & Kameshwara, Kalyan Kumar & Lazetic, Predrag, 2024. "The Scarring Effect of Graduate Underemployment: Evidence from the UK," IZA Discussion Papers 17364, Institute of Labor Economics (IZA).
    6. 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.
    7. 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.
    8. Lindsey Macmillan & Richard Murphy & Gill Wyness, 2024. "Occupational hazard: Inequalities in labour market mismatch," CEPEO Working Paper Series 24-06, UCL Centre for Education Policy and Equalising Opportunities, revised Oct 2024.
    9. 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).
    10. 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.
    11. 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.
    12. 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.
    13. Goehausen, Johannes & Thomsen, Stephan L., 2024. "Early Career Effects of Entering the Labor Market During Higher Education Expansion," IZA Discussion Papers 17487, Institute of Labor Economics (IZA).
    14. Wenchao Jin, 2022. "Occupational polarisation and endogenous task-biased technical change," Working Paper Series 0622, Department of Economics, University of Sussex Business School.

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    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

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