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How responsive is higher education? The linkages between higher education and the labour market

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  • Ashok Bardhan
  • Daniel L. Hicks
  • Dwight Jaffee

Abstract

Higher education is considered vital for developing a productive and dynamic labour force to meet the demands of the global economy. How effectively does the US higher education sector respond to labour market signals? We match US postsecondary degree completions from 1984 to 2008 with occupational employment statistics and employ an Instrumental Variable (IV) strategy to examine the supply response to changes in occupation specific demand. The supply of educated workers appears weakly responsive to short-term wage signals and moderately responsive to long-term employment conditions. Analysis reveals a sizeable degree of heterogeneity and lag in the responsiveness across specific occupation--degree pairings. Failure to respond rapidly to changes in labour demand may be one factor driving inequality in wages across occupations and in the aggregate economy. We suggest some simple policy measures to help increase the responsiveness of the higher education sector, both in terms of the output of specific degree programmes and the overall mix and composition of graduate completions.

Suggested Citation

  • Ashok Bardhan & Daniel L. Hicks & Dwight Jaffee, 2013. "How responsive is higher education? The linkages between higher education and the labour market," Applied Economics, Taylor & Francis Journals, vol. 45(10), pages 1239-1256, April.
    • Handle: RePEc:taf:applec:45:y:2013:i:10:p:1239-1256
    DOI: 10.1080/00036846.2011.613801
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    Cited by:

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    2. Hana Stojanova & Barbora Lietavcova & Ivona Vrdoljak Raguž, 2019. "The Dependence of Unemployment of the Senior Workforce upon Explanatory Variables in the European Union in the Context of Industry 4.0," Social Sciences, MDPI, vol. 8(1), pages 1-9, January.
    3. Élisé Wendlassida Miningou, 2020. "Matching the Education System to the Needs of the Economy: Evidence from Burkina Faso," Cahiers de recherche 20-04, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    4. Balogh, Gábor & Sipos, Norbert, 2019. "Pályakezdő közgazdászok bére a szakdiverzifikáció függvényében [Programme diversification effects on the salaries of freshly graduated economists]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 551-577.
    5. Piróg Danuta & Hibszer Adam, 2023. "Which Skills are the Most Prized? Analysing Monetary Value of Geographers’ Skills on the Labour Market in Six European Countries," Quaestiones Geographicae, Sciendo, vol. 42(4), pages 63-79, December.
    6. Jaideep Ghosh & Avinash Kshitij, 2016. "Higher Education in Basic Science and Socioeconomic Characteristics of Students’ Life in India: An Exploratory Study," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(1), pages 311-337, January.
    7. Gracia Serrano & Francisco Llamazares & F. Javier Otamendi, 2015. "Measurement and Sustainability of the Qualifications Frameworks in the European Higher Education Area through an Employment Survey on Access to the Labour Market," Sustainability, MDPI, vol. 7(10), pages 1-36, October.
    8. Daniel Kuehn & Hal Salzman, 2018. "The Engineering Labor Market: An Overview of Recent Trends," NBER Chapters, in: US Engineering in a Global Economy, pages 11-46, National Bureau of Economic Research, Inc.
    9. Ilyés, Virág & Sebők, Anna, 2020. "Egyetemről a munkaerőpiacra. Felsőoktatási ismeretségek hatása a munkaerőpiaci kilátásokra [From university to working life - the effect peers in higher education have on labour-market outcomes]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 993-1028.
    10. Donald R. Grimes & Penelope B. Prime & Mary Beth Walker, 2019. "Geographical Variation in Wages of Workers in Low-Wage Service Occupations: A U.S. Metropolitan Area Analysis," Economic Development Quarterly, , vol. 33(2), pages 121-133, May.

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