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OECD warns on ¡®mismatch¡¯ between subject choice and market demand

<ÁñÁ«ÊÓƵ class="standfirst">Education at a Glance finds graduate earnings still buoyant despite expansion, but education director warns on variations across subjects
September 10, 2019
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The graduate earnings premium has held strong as higher education has expanded globally, but high variations across subjects in countries such as the UK show students need ¡°more reliable information on the prospective labour market value of their studies¡±, an expert said.

The latest edition of the Organisation for Economic Cooperation and Development¡¯s report, published on 10 September, shows that ¡°the employment rate of adults with a tertiary degree is about 9 percentage points higher than for those with upper secondary education only, and they earn on average 57 per cent more¡± across member nations. This shows that ¡°the demand for tertiary skills in the labour market remains strong in spite of the increasing supply of graduates¡±.

But the report raises questions about the balance of subject provision across OECD nations, finding that ¡°less than 15 per cent of new entrants to bachelor¡¯s programmes study engineering, manufacturing and construction and less than 5 per cent study information and communication technologies ¨C even though these fields are most commonly associated with technological progress and yield the best labour market outcomes¡±.

Andreas Schleicher, the OECD¡¯s director for education and skills, said that ¡°stable earnings returns signal that the massive increase in knowledge workers hasn¡¯t led to a decline in their pay, which is what we are seeing at the low end of the skills distribution¡±.

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But he added that it was ¡°harder to discern to what extent this reflects the value added by higher education institutions¡±, or a ¡°sorting¡± effect from higher education recruiting ¡°smarter people¡±.

¡°Big variations in the earnings outcomes by field of study also reflect a mismatch between study choices and labour demand,¡± Mr Schleicher said.

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He cited the example of the UK, where Education at a Glance finds ¡°a relatively large difference in earnings advantage across fields of study¡±.

Students ¡°who studied natural sciences, mathematics or statistics earn over 180 per cent of the earnings of a worker with only an upper secondary education¡±, it says. ¡°Meanwhile, those who studied arts, humanities, social sciences, journalism or information earn 92 per cent of the earnings of a worker with an upper secondary education.¡±

The report also warns that the UK may be seeing the most relevant skills dwindle. ¡°There is a substantial gap (more than 10 percentage points) between the share of tertiary educated 25-64 year olds who studied engineering, manufacturing and construction and the share of recent graduates who have done so,¡± it says.

Mr Schleicher said that, given students in England ¡°pay much higher tuition [fees] than elsewhere, they probably deserve better guidance and more reliable information on the prospective labour market value of their studies¡±.

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john.morgan@timeshighereducation.com

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Print headline: Study choices and job market ¡®mismatched¡¯

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