HomeJobsCiarán Nugent: There are not enough jobs for Ireland's graduates 

Ciarán Nugent: There are not enough jobs for Ireland’s graduates 

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Ireland has undergone a transformation in the educational profile of the adult population in a generation, from having one of the lowest shares of third level education to the highest in the EU. For many, this is an integral part of a country’s development.

Education is the most important equaliser of opportunities and a vehicle of social mobility, which is important in an environment of growing inequality of outcomes for social cohesion. Third level education allows access to occupations with the highest levels of social status and the highest earnings, specifically managerial, professional, associate professional and technician jobs.

However, recent research suggests that the record growth in the numbers of third level graduates over the past generation has outpaced the creation of high-end employment in the Irish labour market commensurate with those qualifications. 

This has resulted in increasing numbers of graduates working in jobs in which they are overqualified, now at over 30% of all Irish working third level graduates. This group now make up approximately 14% of all employment (north of 300,000 workers), the second highest share in the 13-country sample of high-income EU members, behind Spain and well above the country average of 8.6%.

The journey from the lowest share of third level graduates to the highest in a high-income EU context involved narrowing the gap of third level attainment by social origin, by increasing the numbers going to third level from families who weren’t in the same education bracket themselves.

In 2005, a massive majority of adults whose fathers had third level qualifications completed third level education themselves and continue to do so. Irish adults whose fathers were in the lowest bracket of formal education (in an Irish context this refers to formal education up to junior certificate), are now most likely out of 13 countries to have a third level qualification at 46%, up from 24% in 2005.

Supply vs demand 

Unfortunately, on the demand side the evidence shows that out of the 13 countries, the share of third level graduates securing high-end employment fell most in Ireland between 2005 and 2019 from 67% to 55% and is now the second lowest in the sample, behind Spain at 52%. Sweden for example, is the top performer with 79.1% of working third level graduates in managerial, professional, and technician roles.

In 2019, though Irish adults whose fathers were in the low formal education bracket were most likely out of 13 countries to have a third level qualification, graduates in this group were least likely to be in high-end employment at 47.4% down from 62.5% in 2005, the largest drop for any group. The share of overqualified graduates in the group increased by about the same amount, from 25% in 2005 to 40% in 2019.

Graduates are increasingly filling jobs with lower skills requirements instead, mostly in services, sales and clerical roles. The evidence suggests that the oversupply of graduates at the same time are ‘bumping down’ adults with lower levels of formal education out of the labour market entirely who in the past might have filled these roles.

Every incentive is there for school leavers to go to third level, even to secure relatively low paid employment with lower training requirements. There’s a 20-point gap between the employment rates of the third level group and what might loosely be called ‘middle skilled’. Only one in five adults under 40 who left formal education at junior cert level are in employment. In 2007, it was half.

Although obviously, the value of third level education both on an individual and societal basis is not captured by pure labour market consideration, in an environment where there are clear skills demand in economic activities of strategic importance, in particular in construction, this throws up clear questions about the balance of skills supply, how we manage and fund different pathways and what government can do to address the growing number of overqualified workers. 

  • Ciarán Nugent is an Economist at the Nevin Economic Research Institute

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