Over- and undereducation in the UK graduate labour market

Abstract

ABSTRACT The authors examine the apparent underutilisation of the skills of employed graduates. As in the USA, concern has arisen in Britain over the numbers of graduates working in jobs which might be carried out equally well by those with subdegree qualifications. The authors discuss whether or not overeducation represents a serious problem, outlining theoretical explanations of over- and undereducation. Two measures of over/undereducation are then used to examine the British graduate jobs market. Drawing on Labour Force Survey data, the authors relate over- and undereducation to a range of personal and employment characteristics. They conclude that the significance of the problem of overeducation can be exaggerated, since it may represent a rational response of individuals to labour market conditions. They also point out that undereducation—where people hold graduate-level jobs without possessing degrees—is a form of labour market advantage which accrues disproportionately to white males.