Regulación y aplicación

Men (%) Women (%)

Full time Partnered Dependent children 57.5 44.9

No children 57.6 53.3

Not Partnered Dependent children 54.5 45.6

No children 56.4 53.1

Part time Partnered Dependent children 44.1 47.0

No children 36.9 39.0

Not Partnered Dependent children 45.9 45.2

No children 30.9 37.0

Source: ABS Census of Population and Housing (2011), customised dataset, author calculations

While the proportion of the 25 to 29 year age group working part time (or not at all) is relatively small, particularly those without linked lives, their lower levels of skill utilisation raises the question as to what long term effects this will have on their ability to maximise their successful life outcomes. Further, will this be a trend for future cohorts and generations?

As discussed in the first section of this chapter, there is increasing evidence that the expansion of the higher education sector is producing more highly educated young people than there are jobs

available for (Dockery & Miller 2012; Holmes & Mayhew 2015, 2016; McGuinness 2006; SkillsIQ 2017). Skill utilisation is highest for those who are able to secure full time employment following completion of their qualification, but for many graduates, jobs for new labour market entrants do not allow them to use their skills (Holmes & Mayhew 2016). In Australia, the 2017 Graduate Outcomes Survey (QILT 2018b) reports that while 86.5 per cent of graduates secured employment within 4 months of completing their degree, two in five (41.1 per cent) graduates do not use their skills or education in their job, primarily due to the lack of suitable jobs in their area of expertise. As Montt (2015) concluded, employment in a person’s chosen field of study will not be automatic; it is

159 level of generic skills which determine an appropriate match. While there is evidence that higher education is endowing graduates with skills relevant for the labour market (Holmes & Mayhew 2016; QILT 2018a, 2018b), the expansion of the sector and the subsequent increase in the supply of skills has not resulted in the anticipated corresponding increase in the number of high skill jobs for labour market entrants, as predicted by the theory of human capital. This undersupply of graduate level jobs has led to employers using qualifications as a filtering or screening device to identify the intrinsic qualities and attributes sought for the job. Moreover, while there is some evidence that the increase in supply of more highly educated labour market entrants has resulted in the upskilling or upgrading of jobs, it is more likely that graduates are working in a job that in previous generations would have been filled by non-graduates, and, as such, are no more or less productive (Holmes & Mayhew 2015, 2016). There is also an increasing trend in Australia towards recent graduates being employed part time, increasing by 17.1 percentage points to 37.9 per cent of graduates since 2008 (QILT 2018b). This is particularly so for male graduates, and provides further evidence of the disappearing working male (Rozner 2017), which is linked closely to field of study and industry sector.

Henseke and Green (2016) developed an indicator of graduate jobs to test whether the restructuring of the 21st _{Century economy to a technologically driven one had resulted in any adjustment to an}

upskilled labour market. They found that higher education qualifications are required for a considerable range of jobs beyond the traditional classification of most occupations in the Major Groups 1 and 2 of the ISCO. The proportion of graduate skill requirements increased from around 21.2 per cent of all jobs to 27.6 per cent of all jobs following the reclassification, because it added an additional 43 per cent to the Minor Group 3 occupations. In terms of utilisation, Henseke and Green (2016) found that 68.7 per cent of all graduates worked in a graduate job (using educational

attainment as a proxy for utilisation and not accounting for field of study match) in the new classification, compared with 57.2 per cent under the traditional classification. Even so, they also found that relatively more non-graduates worked in graduate positions than had under the

traditional classification (around 14.2 per cent), suggesting under-qualification. The expansion of the higher education sector has led to increasing competition for jobs, particularly given the relatively smaller proportion of graduate level jobs in the total job market, regardless of which classification system is used. This, in turn, leads to the crowding out of non-graduates into even lower level jobs. The employer response to this increase in the supply of graduates has been to raise their

expectations of labour market entrants’ qualifications and skills (Smith 2017), that is to increase the skill requirement to get a job, rather than do a job. This results in the exacerbation of economic and social inequality and does nothing to improve productivity (Holmes & Mayhew 2015, 2016). Finally,

the expansion of higher education may also lead to the deskilling of the bulk of graduate jobs (Henseke & Green 2016; Holmes & Mayhew 2015), given that advancements in technology and artificial intelligence are likely to cause ‘knowledge work’ to become more routine, reducing the demand for some previously high skilled occupations. This is effectively increasing the proportion of high skill and lower skill jobs in the labour market at the expense of middle level jobs, usually those labour market entrant jobs typically filled by recent graduates (Holmes & Mayhew 2015). These changes in the world economy mean that more highly educated workers are no longer guaranteed a high skill, high pay career (Smith 2017).

Not only is the extent of over-education and under-utilisation of skills evident in graduate level jobs, there is also increasing heterogeneity in the returns to education and skills (Henseke & Green 2016). It should be borne in mind, too, that, the combination of over-qualification and skill mismatch has the most severe negative labour market outcomes, and that these vary by gender (Mavromaras, McGuinness, et al. 2013).

Employers report being highly satisfied with both the higher education (83.6 per cent) (QILT 2018a) and VET sectors (74.5 per cent) (NCVER 2017a), and that there is a strong relationship between the skills and knowledge acquired and the requirements of specific jobs. Even so, as is evident in the research for this thesis, graduates are being significantly under-utilised due to a lack of supply of jobs appropriate to their complement of skills and qualifications. Importantly, employers report that it is domain-specific skills and knowledge that are the most important requirement of a qualification to best prepare young people for employment (52.8 per cent) (QILT 2018a). Further, 37.6 per cent of employers surveyed also suggested than any improvements to qualifications in preparing young people for employment should focus on domain-specific and technical skills. Even so, 42.1 per cent of employers reported recruitment difficulties, predominantly due to a shortage of appropriate skills (56.4 per cent) and limited applicants (41.6 per cent) (NCVER 2017a), further reinforcing a mismatch between the supply of and demand for skills.

The extent of under-utilisation of recent graduates raises the question of the role and size of the higher education sector in relation to the size of the labour market (Chartered Institute of Personnel and Development 2016). While employers focus on the immediate skills graduates require to become members of the workforce, Humburg and Van der Velden (2017) suggest that higher education also needs to equip students with skills that contribute positively to their employability over their lifespan and enable them to have a good career. In a rapidly changing global economy, higher education also needs to find a balance between enabling students to acquire broad

161 professional skills and narrower, domain-specific skills (Humburg & Van der Velden 2017), rather than just responding to immediate demand.

Employment outcomes and labour market considerations are becoming increasingly important as the cost of higher education is shifted from a sector which was largely publicly funded to one in which the student will bear the bulk of the financial risk (Holmes & Mayhew 2016). With the supply of highly skilled and educated young people exceeding the demand for their skills, there is a need to devise and construct alternative, more effective pathways from education to the labour market than those afforded solely by higher education, including greater demand side analysis and investigation of sectoral conduct (Holmes & Mayhew 2016). Holmes and Mayhew (2016, p. 490) go so far as to state that “society has created a strange form of entrapment as far as young people’s decision making is concerned.”

This transition to an alternative model may already be occurring, in Australia at least. The VET Student Outcomes Survey (NCVER 2017b) reports that a higher proportion of VET graduates from universities were employed after their training compared with recipients of other providers of VET (89.2 per cent). Further, almost half of the recent graduate respondents to the Graduate Student Outcomes Survey were employed in their job before they completed their qualification, with employers advising that the combination of work and study broadens and deepens the skills and knowledge base of their employees (QILT 2018b).

In terms of employment and skill utilisation of young people with linked lives, the oversupply of highly skilled and qualified people results in employers using a filtering system to identify the most able individuals to meet their needs to effectively do the job. This will mean that as soon as a person, regardless of age, reduces their availability, the opportunity to gain employment in an occupation appropriately matched to their complement of skills will be reduced.

Importantly, to improve macro-level productivity through improving skill utilisation of educated individuals over their lifespan (particularly those aged 25 to 29 years), increasing the appropriate supply of skills and outcomes will rely on the ability and willingness of employers to change the organisation and design of work to take advantage of these skills, as well as on a broader increase in demand (Holmes & Mayhew 2015).

The high level of under-qualification in ‘skill level one’ occupations

The high level of under-qualification in Australia’s workforce warrants further exploration, particularly of those in skill level one occupations: managers and professionals. Over one in ten Australians with post-school qualification were under-qualified for their job; 9.2 per cent were under-qualified only, and 2.5 per cent had a combined under-qualified and field of study mismatch. Of these, two in five were employed in managerial occupations and almost half were employed as professionals (see Figure 7.9, below). Further, the proportion of the workforce that was under- qualified increased with age, as was shown in Chapter Six. As Allen and Van der Velden (2001) explained, working in a job above a person’s education level raises the productivity ceiling, which is then further limited by the ability, knowledge and experience of the individual worker. Ensuring that workers’ education and skill levels are adequate to perform in their jobs will be a critical factor in improving life outcomes and productivity performance at the meso and macro levels.