Against the Grain? Assessing Graduate Labour Market Trends in Germany Through a Task-Based Indicator of Graduate Jobs

Abstract

Applying work by Green and Henseke (in IZA J Labor Policy 5(1):14, 2016a), this study examines changes in the German graduate labour market in the twenty-first century. To do so, it deploys a new statistically derived indicator of graduate jobs, based on job skill requirements obtained from worker-reported task data in the German Employment Surveys 2006 and 2012. As in previous work, the resulting classifier explains differences in graduate labour market outcomes better than existing methods and can be applied in a range of contexts where intelligence on graduate destinations is desired. It is supplied in the appendix of this study. Despite the expansion of higher educational attainment between 1999 and 2012, my analysis indicates a rising excess demand for graduate labour. Following key findings emerge: Graduate skills are required beyond the narrow range of professions. Work tasks associated with cognitive skills use are key determinants of higher education requirements on the job. The proportion of graduates in the age bracket 25-34 has risen among men from 14.7 to 18.9% and from 13.3 to 22.5% among women between 1999 and 2012. Young women have become the group with greatest level of higher education in the labour market. The growing supply of graduate labour in the age bracket 25-34 was surpassed by the expansion of employment in graduate jobs. The employment share of graduate jobs shifted by 17 percentage points to almost 30% among young women and by 11 percentage points to 28% among young men. Among young female graduates, the incidence of underemployment fell to 22% between 1999 and 2012; roughly comparable to the level among males at the same ages. Prime aged female graduates, however, experience above average rates of underemployment. A sharp rise of the pay premium associated with higher education among men contrasts with stagnating wage differentials among women. The pay penalty associated with underemployment has not changed statistically significantly.