The Productivity Commission’s recent productivity review showed that employment outcomes for full-time graduates “have been getting worse”, whereas a quarter of recent graduates believed their degrees added no value:
For those who do complete their degrees, post graduation outcomes have been getting worse. Full-time employment rates for recent graduates have been declining, even as the Australian economy has continued to grow (figure 3.3). Many of those who do not work full-time are not in that position by choice, with the underemployment ratio among graduates at 20.5 per cent in 2016, compared with about 9 per cent in 2008. Graduate starting salaries have also been growing slower than wages across the broader economy (declining from nearly 90 per cent of average weekly earnings in 1989 to about 75 per cent in 2015)…
Further, over a quarter of recent graduates believed they were employed full-time in roles unrelated to their studies, to which their degree added no value. To the extent that someone without a costly university education could have undertaken these roles, this can then have cascading employment and income effects down the skills ladder.
Many employers are also not satisfied with the quality of recent graduates, with about one in six supervisors saying that they were unlikely to consider or would be indifferent to graduates from the same university…
University students are also not satisfied with the teaching in their courses…
Today, a new survey has been released showing that graduates continue to struggle to find full-time work, despite the big lift in overall jobs growth over the past year. From The Canberra Times:
Although there have been small improvements since 2014, employment outcomes for new graduates are still significantly worse than than before the global financial crisis – despite a general employment boom…
The survey showed 71.8 per cent of undergraduates were in full-time work four months after leaving university – up 0.9 percentage points since 2016, but still well below the peak of 85.2 per cent in 2008.
The Grattan Institute’s higher education analyst Andrew Norton said the flood of graduates created by Labor’s demand-driven system, which increased university participation, had made the headline figures “worse”…
The subject areas with the lowest proportion of full-time employment after four months were the creative arts (55.4 per cent), science and mathematics (59 per cent), psychology (60.7 per cent) and communications (61.7 per cent).
The survey also noted a shift to part-time employment, primarily due to the “relatively weak” state of the labour market since the GFC. Since 2008, the proportion of employed graduates working part-time increased to 37.9 per cent from 22.8 per cent.
Many of those people were not seeking more hours due to continuing studies. But a stubbornly high 19.7 per cent of all employed graduates were unhappily underemployed, with the highest concentration in the creative arts, communications, tourism and hospitality, the humanities, science and maths.
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This site has argued repeatedly that the uncapping of university places, and the subsequent explosion of students, has devalued a university degree, thereby worsening graduate outcomes.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
