Late last month the provincial government provided some details on its planned re-engineering of the public post-secondary education (PSE) and training system, which will see additional funding directed to expand capacity to educate/train young people in high-demand occupations – and, presumably, result in fewer dollars being available to fund programs in other parts of the PSE system. One of the key factors behind the revamp is a belief among policy-makers that the “supply” of and “demand” for skills are out of alignment in the current labour market. British Columbia therefore intends to allocate more education and training dollars “to jobs in demand.” The government has also promised to improve the quality and timeliness of labour market information to enable better-informed decision-making by students, educators and employers. I believe both of these steps make sense.

While there are differing views on the government’s approach, the issue of labour market mismatch is real. One sign of this is a pattern of “over-qualification” among recent post-secondary system graduates, including those with university degrees. A recent Statistics Canada study sheds some light on the phenomenon. Among other things, the authors report the following findings, based on an examination of the 2011 National Household Survey supplemented with data drawn from the 1991 and 2006 censuses:

• Among university graduates aged 25 to 34 in 2011,[1] 18% worked in jobs requiring a high school education or less, and approximately 40% were in occupations requiring a college-level education or less. These proportions are little changed since the early 1990s, which suggests the incidence of over-qualification among young adults holding university credentials has not increased – notwithstanding a common perception to the contrary. However, there are far more university graduates in Canada today, both in absolute numbers and as a share of the 25 to 34 age cohort, so even a similar incidence of over-qualification translates into a steadily growing pool of workers whose education levels don’t accord well with their current employment.[2]
• In 2011, immigrants aged 25 to 34 with university degrees earned outside of Canada or the United States were much more likely to be over-qualified in their jobs than either Canadian-born individuals holding degrees or immigrants possessing Canadian/US university credentials. Over-qualification is less common among Canadian-born university graduates. It turns out that immigration is a big part of the broader story of over-qualified workers.
• For university degree holders aged 25 to 34, there are marked differences in over-qualification by field of study. Those with degrees in the visual/performing arts and the humanities fare worst on this measure, while graduates who studied engineering, education, architecture, and health-related fields are significantly less likely to be classified as over-qualified. In the case of graduates from mathematics, computer and information sciences programs, over-qualification is low among men but noticeably higher among women. The accompanying table provides further details.
• Among all university graduates, over-qualification decreases with age. This reflects the fact that after graduation, it often takes a period of years for young adults to find employment that is related to their skills and field of university study.
• Graduates holding master’s and Ph.d degrees were less likely to be over-qualified in their jobs than graduates who did not proceed beyond the bachelor’s degree level.

In summary, a couple of key messages stand out from the Statistics Canada study.

First, over-qualification among university graduates is widespread. It is striking that, as of 2011, close to one-fifth of all university graduates in Canada aged 25 to 34 were working in jobs which require only a high school diploma, according to Statistics Canada’s system for grouping occupations by skill levels and educational attainment.

Second, immigrants with degrees from non-North American universities are especially at risk of finding themselves over-qualified. For example, in 2011 35% of such immigrant men under the age of 35, and 43% of the women, were working in jobs requiring only a high school diploma, compared to 15% for Canadian-born men and women holding degrees and in same age group.

Third, Canada’s labour market is dynamic. Regardless of where they start in the job market, many university graduates eventually migrate to positions and careers that are more closely linked to their post-secondary education. And most people with master’s, doctoral and professional degrees are employed in jobs that seem to match their areas of study.

Overall, these findings lend some support to the philosophy underpinning the BC government’s new skills and education blueprint. There is certainly a case for directing more funding resources to expand education and training programs that are tailored to meeting the near-term and projected demand for skills. However, it is important to remember that in the wider labour market context and from a longer-term perspective, there is strong evidence that completing a post-secondary education pays off for young people – including most of those with university degrees.