In many wealthy countries, including my own of Australia, 40% of young adults are likely to achieve a bachelor degree or above. But policy-makers and others wonder whether we might have too much of a good thing.

‘Overqualification’ is observed in labour markets around the world. While people with any qualification can be classed as such in jobs that don’t require it, graduates working in lower-skill jobs attract the most attention. They have all spent years studying, at considerable public and often private cost.

Overqualification frequently co-exists with skills shortages. And often, as a recent House of Lords report in the United Kingdom noted, the shortages are in jobs requiring vocational rather than higher education. This is the case in Australia also.

Potentially, both problems could be alleviated if more students pursued vocational instead of higher education. But that is likely to require cultural and policy change. Any promotion of vocational education must deal with perceptions established well before a post-school choice needs to be made.

School student surveys in Australia show a preference for higher education and negative perceptions of vocational education.

Bias against vocational education

One issue may be that young people overestimate the chances of a positive outcome from higher education and underestimate the benefits of vocational education.

In Australia, letting universities enrol an unlimited number of bachelor-degree students, known locally as demand-driven funding, led to an increasing share of enrolments with mid-range school results. These students are less likely than their peers with strong school results to finish their course.

For students who do finish, the OECD found that graduates in jobs below their formal skill level have lower numeracy ability than graduates in jobs that match their qualification. Both findings suggest that higher education is less likely to pay off for students who are not at the top of their school cohort.

Read more : Andrew Norton : University World News : 16 November 2018