Towards a Transparent Labour Market for Educational Decisions

Han Heijke, Lex Borghans

• Publisher: Taylor & Francis
• Year: 2018
• Print ISBN: 9781138364950
• eBook ISBN: 9780429774669
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Business General
• Index: Politics & International Relations

First published in 1998, this collection of essays strongly advocates for increased flexibility in the Dutch labour market and questions current assumptions on the connections between education choices and ultimate employment outcomes. The volume responds to the glaring contradiction between the current mass unemployment in all European nations, both in urban and rural areas, affecting people of different levels of education (though primarily those of low-skills levels or ethnic backgrounds) and the idea that labour is the most important source of wealth. Its objective is to develop insights, ideas, and experiences concerning the possibilities for increasing the transparency of the labour market. The contributors recognise that the quality of labour has rapidly become the key factor in economic and social development.

Part One
Prospects

2 Future Developments in the Job Level and Domain of High-skilled Workers

Andries de Grip, Lex Borghans and Wendy Smits

Introduction

Since Freeman's (1976) Overeducated American, various studies on the relationship between education and job levels have been published (see e.g. Duncan and Hoffman, 1981; Tsang and Levin, 1985; Verdugo and Verdugo, 1989; Groot, 1993; Cohn and Kahn, 1995). In particular the studies of Huijgen (see e.g. Huijgen, 1989) initiated a debate on the overeducation of the labour force in the Netherlands. However, it has proved very difficult to give an appropriate definition of overeducation. The concept of overeducation is very sensitive to the point of reference chosen, so that measurements of overeducation are highly dependent on the measurement approach. Huijgen's approach is based on the classification of occupational categories by experts and generates a much higher percentage of overeducated workers than when the workers themselves are asked about the level of the job they fill (see de Grip et al., 1993). Despite the measurement difficulties, there is a widespread consensus that during the seventies and eighties people with higher education tended to find employment in jobs at lower levels. The supply of highly-educated workers (those with a tertiary qualification) seemed to be increasing more rapidly than the increase in demand for a highlyeducated workforce.

One remarkable feature of the most recent forecasts of the Research Centre for Education and the Labour Market (ROA, 1995) with respect to labour market developments in the Netherlands in the period 1995-2000 is the favourable forecasts of the future labour market situation in the year 2000 for graduates from most types of tertiary education (see Borghans, de Grip and Smits, 1996). The demand for highly-educated newcomers on the labour market will increase due to the continued upgrading of the labour force and a rapid increase of replacement demand due to the ageing of the workforce, while the supply of graduates will decrease slightly due to a fall in the number of students at universities and in tertiary-level vocational education.¹ However, in the light of the experiences of the last two decades, there is some reason to suspect that an improvement in the labour market prospects of various fields of study in higher education may actually relate, to some extent, to employment below the tertiary level or outside the specific occupational domain of these types of education. In other words, it may reflect the continuation of 'crowding-out' processes in the labour market (see e.g. Spee andCoppens, 1996).

This Chapter investigates the expected consequences of the changing ratio between supply and demand for those with higher education. A broad approach to this question is adopted by analyzing the relation between the expected developments in supply and demand on the one hand and, on the other hand, the shifts in both the job level and the occupational domain of high-skilled workers in the next few years in the Netherlands. With respect to the occupational domain, the analysis focuses particularly on the extent to which employment growth relates to the specific occupational field of the type of education, the shared domain in which workers with the type of education concerned compete to a large extent with workers with another educational background and the alternative domains, which refer to occupations that do not recruit workers with a particular educational background and occupations which are more or less specific domains of other types of education. The various components of the expected shifts are also analyzed. These components relate to shifts in the industry structure of employment (the industry effect), shifts in the occupational structure of employment within economic sectors (the occupational effect), shifts in the skill structure of the workers in the various occupational segments (the educational effect) or to substitution processes on the labour market due to ex ante supply-demand mismatches for particular types of education (the substitution effect). This analysis makes it possible to gain a better understanding of the substitution processes which can result from ex ante discrepancies between demand and supply in the labour market.

The Chapter is organised as follows. Next Section sketches the structure of the labour market forecasting model used. The modular structure of the model makes it possible to distinguish the various components of the employment growth at the different job levels and occupational domains. T...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Contributors
• Acknowledgements
• Foreword The Need for Labour Market Transparency in a Changing Economy
• Introduction
• Part One: Prospects
• Part Two: Flexibility
• Part Three: Curriculum
• Appendix The Dutch Education System