The Liberal government’s “Skills for Jobs Blueprint” will see additional funding directed to expand capacity to educate/train people in high-demand occupations – and fewer dollars available for programs in other parts of the system. An important factor behind the revamp is a belief among policy-makers that the “supply” of and “demand” for skills are out of alignment in the contemporary labour market.
While there are differing views on the B.C. government’s blueprint, the worry over skills mismatches is legitimate. One sign of this is a pattern of “over-qualification” among PSE graduates, including those with university degrees. A 2014 Statistics Canada study shines a light on the issue. Based on an examination of the 2011 National Household Survey, supplemented with data drawn from the 1991 and 2006 censuses, the study reports the following results:
- Among university graduates aged 25 to 34 in 2011, 18 per cent toiled in jobs requiring a high school education or less, and approximately 40 per cent were employed in occupations that demand a college-credential or less. These proportions are little changed from the early 1990s, which suggests the incidence of over-qualification among university graduates has not increased – notwithstanding a common perception to the contrary. However, there are far more university graduates in Canada today, in absolute numbers and also as a share of the 25 to 34 age cohort, so a similar incidence of over-qualification translates into a growing pool of workers whose education levels don’t accord well with their current employment.
- In 2011, immigrants aged 25 to 34 with university degrees earned outside of Canada or the United States were far more likely to be over-qualified in their jobs than either Canadian-born individuals possessing degrees or immigrants with Canadian/U.S. university credentials. Over-qualification is noticeably less common among the Canadian-born. It turns out that immigration is a big part of the broader story of over-qualified workers.
- For university graduates aged 25 to 34, there are marked differences in over-qualification by field of study. Those with degrees in the humanities and arts fare worst, while graduates who studied engineering, education, architecture, business, and health-related fields are less likely to be classified as over-qualified. In the case of mathematics, computer and information sciences programs, over-qualification among graduates is low among men but somewhat higher in the case of women.
- Importantly, among all university graduates over-qualification decreases with age. This reflects the fact that after completing university, it often takes a few years for young adults to find employment that is related to their skills and field of study.
- People holding masters and doctoral degrees were less likely to be over-qualified in their jobs than those who did not proceed beyond the bachelor’s degree level.
In summary, a few key messages emerge from the Statistics Canada study.
First, over-qualification among young adults with university degrees is quite common. As of 2011, close to one-fifth of all university graduates in Canada aged 25 to 34 were working in jobs requiring only a high school diploma, according to Statistics Canada’s system for grouping occupations by skill levels and educational attainment.
Second, immigrants are especially at risk of finding themselves over-qualified. In 2011 more than one third of immigrant men under age 35 with non-North American university degrees, and 43 per cent of women, were working in jobs demanding only a high school diploma, compared to 15 per cent for Canadian-born men and women in the same age cohort who had also completed degrees.
Third, Canada’s labour market is dynamic. Regardless of where they start in the job market, many university graduates eventually migrate to positions and types of work that are more closely linked to their post-secondary education. And most people with masters, doctoral and professional degrees are employed in occupations that seem to match their areas of study.
Finally, taking a longer-term perspective, there is strong evidence that a post-secondary credential, particularly from a Canadian or U.S. institution, remains a good investment. For most young adults, completing a PSE program is still the ticket to better jobs and higher incomes over the course of a working career.
Jock Finlayson is Executive Vice President of the Business Council of British Columbia.