Although the number of students completing higher education in Austria has increased substantially over the last 40 years, the total still lags behind that in fellow members of the Organisation for Economic Co-operation and Development (OECD [1]). At the same time, recent studies indicate that graduates (especially in non-business oriented subjects) often face precarious employment.[1] http://www.oecd.org
Austria has a relatively low number of graduates completing higher education compared with other OECD countries, but this is not reflected in the often precarious labour market entry of degree holders. A recent study investigated the contradiction between low levels of tertiary-level graduates and the precariousness of graduate employment, revealing growing differentiation in the employment situation of graduates in terms of both sectoral and occupational status.
Although the number of students completing higher education in Austria has increased substantially over the last 40 years, the total still lags behind that in fellow members of the Organisation for Economic Co-operation and Development (OECD). At the same time, recent studies indicate that graduates (especially in non-business oriented subjects) often face precarious employment.
This is the starting point for a recent study (in German, 803Kb PDF) published by the Institute for Research on Qualifications and Training of the Austrian Economy (IBW). IBW was founded jointly by the Austrian Federal Economic Chamber (WKÖ) and the Federation of Austrian Industry (IV).
About the study
The study is based on:
secondary statistical analyses of university, labour market and employment data;
an analysis of online job advertisements seeking tertiary education graduates;
a market survey investigating the demand for graduate labour.
The study aims to document the development of Austria’s tertiary education sector (including institutional change) and to challenge the sector over how well it meets the economy’s qualification requirements. This article focuses on those aspects of the study relevant for quality of work and employment issues.
Over the past 40 years, student numbers in the tertiary education sector have quadrupled and, since the mid-1980s, the number of graduates has tripled. At first glance, the labour market does not seem to have had any problems absorbing this increasing supply of graduate labour.
The number of employees with university degrees working in the public sector doubled between 1991 and 2008.
Among private sector employees, the increase in graduates was even higher ( 177%).
At the same time, unemployment among graduates has remained relatively low at 2.1% in 2008 (after a peak of 3.5% in 2004).
Key findings
While these developments might serve to support the argument that Austria has too few graduates from tertiary education, the authors of the study argue that the unemployment rate is insufficient to measure the labour market’s capacity to absorb graduate labour. Instead, they suggest adequate employment conditions as a more suitable indicator.
A closer look at the data reveals a growing differentiation in the employment situation of tertiary education graduates, both in sectoral and status terms.
Sector employment of graduates
Even though the number of graduates in the public sector doubled between 1991 and 2008, their relative share of all public sector employees fell from 50% to 43%. At the same time, there was an increase in the number of graduates in private business-oriented services (see table).
At 35%, the ‘professional, scientific and technical activities’ sector (NACE) employs by far the highest share of private sector graduate labour (average of 13.5% overall in 2008), which in absolute numbers (75,000) is more than all the graduates working in the entire manufacturing sector.
| Economic sector | 1991 Labour force, census | 2008 Labour force, microcensus | Change |
|---|---|---|---|
| Agriculture and forestry | 1,200 | 3,600 | 2,400 |
| Manufacturing | 26,100 | 58,200 | 32,100 |
| Mainly private services | 71,600 | 196,700 | 125,100 |
| Mainly public services | 99,400 | 192,600 | 93,200 |
| Total | 198,300 | 451,100 | 252,800 |
Note: Rounded absolute numbers of graduates working in different sectors, comparison over time.
Source: IBW study (Statistics Austria, censuses, microcensus, own calculations)
Occupational and income status
The percentage of graduates working in occupations for which no university degree is required increased from 17% in 1991 to 26% in 2008 or, in absolute numbers, from 25,000 to 118,000.
This development is also reflected in terms of income. Thus the income level of the top quartile income earners with a degree from a vocational, educational and training (VET) college (International Standard Classification of Education, ISCED 3–4) significantly exceeds that of 50% of earners with a tertiary-level degree (ISCED 5–6). This suggests that many tertiary-level graduates only manage to achieve an income level that can be reached by those with a lower level of education (for example, from a VET college). The analysis also shows that the pay gap between the highest and the lowest quartile of university graduates is by far the widest for all formal levels of education.
Conclusions
The study identifies an ongoing trend towards greater differentiation of the professional and career opportunities of university graduates against the background of rising graduation rates. The authors conclude that these developments do not fit in with a supposed shortage of graduate labour, as implied by Austria’s low graduate rate compared with other OECD countries. In addition, occupational requirement prognoses indicate that the labour market situation will not change in the near future, keeping the problem of ‘overqualification’ among first degree holders in relation to the jobs on offer on the agenda for the education debate in Austria.
According to the authors, the idea that Austria lags behind in its rate of tertiary education graduates is a statistical error generated by not taking into account the different education systems of many European countries where more occupational sectors (such as nurses, kindergarten teachers, etc.) are integrated into tertiary education.
Commentary
The results of the study show that the belief that ever higher qualifications alone can pave the way towards a so-called ‘knowledge-based’ society should be considered with some scepticism. In addition, the well-known labour-market mechanism according to which an excess supply of labour negatively affects the quality of work and employment also applies to at least some university graduates, many of whom are facing increasingly precarious working conditions.
Reference
Schneeberger, A. and Petanovitsch, A., Zwischen Akademikermangel und prekärer Beschäftigung: Zur Bewährung der Hochschulexpansion am Arbeitsmarkt (803Kb PDF), IBW Research Report No. 153, Vienna, Institute for Research on Qualifications and Training of the Austrian Economy, 2010.
Manfred Krenn, FORBA
Eurofound recommends citing this publication in the following way.
Eurofound (2011), Graduate shortages and precarious employment, article.
