Graduate employability in Europe: the role of human capital, institutional reputation and network ties in European graduate labour markets

Abstract

The link between higher education and employment is central to the understanding of social stratification and social mobility. We use three theories to analyse the importance of education and credentials in recruitment decisions in European graduate labour markets: human capital (HC), network capital (NC) and reputational capital (RC) theory. Latent class modelling was applied to data from over 5,000 European private-sector companies to allow segmentation. The results identify four groups of companies using different HC, NC and RC mixes in the recruitment process. A ‘complementary effect' was found between these forms of capital at the time of recruitment. Company classes, however, vary in their emphasis on different types of capital according to their characteristics. The article further contributes to the literature by exploring how national political economies relate to segmentation patterns, and questioning some of the central tenets of the Varieties of Capitalism literature.