Significant gap between students’ employment expectations and reality

A recent study by the Economics Research Centre at the University of Cyprus investigates students’ expectations regarding their future employment and salary, in addition to graduates’ opportunities to participate in the labour market and their actual salaries. The findings show that students hold both unrealistic and realistic expectations in these respects. The study discusses policy recommendations for achieving a better match between expectations and reality.

About the study

The Economics Research Centre (Κέντρο Οικονομικών Ερευνών, ΚΟΕ) at the University of Cyprus (Πανεπιστήμιο Κύπρου) published a study entitled Students’ employment and earnings expectations in Cyprus in December 2007. The study is based on data on graduates and undergraduates in various departments at the University of Cyprus. A stratified sampling method was used for conducting the survey. The data on students were drawn from a sample of some 243 students who were either in their last or second-last year of studies in 2005–2006, all of whom completed a structured questionnaire. The data on graduates were obtained from a sample of 233 students who graduated at the end of the 2002–2003 and 2003–2004 academic years and were based on telephone interviews conducted between June and October 2006. The graduates were from the same departments from which the sample of students was taken, in order to ensure comparability.

Study findings

Employment expectations and outcomes

Most students (62.7%) in the sample expect to be unemployed after graduation, while 37.3% expect to be hired within three months after graduating from university. It is noteworthy that 75% of the students, regardless of whether they expect to be unemployed or not, believe that they will be temporarily employed for some period of their life before being permanently employed. Only 9.6% of the students do not expect any permanent or temporary employment related to their branch of studies. Almost half of all students surveyed (47.2%) expect to go through all of the aforementioned employment stages – that is, unemployment, temporary employment and permanent employment.

Contrary to students’ expectations, 61.2% of the graduates stated that they were employed immediately after their graduation, whereas only 38.8% stated that they were unemployed for some period. A total of 5.8% of the graduates went through all of the stages of employment in their first two to three years of participation in the labour market. A significant proportion of the graduates (38.4%) are already permanently employed in occupations directly related to their branch of studies.

Pay expectations and outcomes

In terms of students’ salary expectations if they are hired, the results in Table 1 show that students are influenced by whether they anticipate securing permanent or temporary employment. Thus, just over 91% of students who expect to take up temporary employment also expect that their monthly salary will be less than €1,197, compared with 66.7% of students who anticipate getting a permanent job. On average, 81.6% of all of the students surveyed expect their salary to be below €1,197 immediately after graduation.

Table 1: Students’ expectations of salary level, by type of employment (%)
Table Layout
Type of employment Salary level
> €854 €856–€1,196 €1,197–€1,537 €1,539–€1,879 €1,879 % of total student sample
Anticipates temporary employment immediately after graduation 39.3 51.8 8.9 0.0 0.0 60.9
Anticipates permanent employment immediately after graduation 11.1 55.6 19.4 8.3 5.6 39.1
Average for total student sample 28.3 53.3 13.0 3.3 2.2 100

Source: KOE, ‘Students’ employment and earnings expectations in Cyprus’, 2007

Similar data have also been drawn regarding the real pay of graduates who are already employed (Table 2). In this case, 35.6% of those taking up temporary employment immediately after graduation earned a starting salary of less than €1,197, while almost 94% of those who secured a permanent job started at this level.

Table 2: Graduates’ salary levels, by type of employment (%)
Table Layout
Type of employment Salary level
> €854 €856–€1,196 €1,197–€1,537 €1,539–€1,879 €1,879 % of total graduate sample
Temporary employment immediately after graduation 24.6 11.0 56.8 6.8 0.8 70.7
Permanent employment immediately after graduation 51.0 42.9 4.1 0.0 2.0 29.3
Average for total graduate sample 32.3 20.4 41.3 4.8 1.2 100

Source: KOE, 2007

Factors affecting anticipated and real employment and pay

In order to investigate the extent to which students’ expectations are realistic, the study carried out an econometric analysis of factors that may affect both anticipated and real employment and pay outcomes. The following sections give an overview of the impact of these factors.

Gender

The gender factor does not appear to have any real effect either on anticipated or real employment: in other words, men and women have the same likelihood of being hired. Thus, the students have rational expectations from a gender perspective in their anticipated employment. However, the same is not true either of graduates’ pay or students’ expected pay, where gender plays a decisive role. Female graduates receive salaries that are 8.8% lower than those of their male counterparts, while female students expect to earn salaries that are 13.1% lower than those of male students.

Postgraduate studies

The effects of postgraduate studies on both real and anticipated employment is significant and varies; the same is true of the impact on real and anticipated salaries. Graduates of the University of Cyprus who went on to do postgraduate studies were more likely to be hired immediately than graduates who did not. However, the students who intend to continue studying at postgraduate level estimate that they are less likely to be hired immediately than those who do not intend to study at this level.

Regarding the effect of postgraduate studies on real and anticipated salaries, an opposite and inverse correlation is observed. Postgraduates state that their salaries are not particularly different from the salaries of graduates without postgraduate studies. Conversely, the students who intend to study at postgraduate level anticipate salaries 9.1% higher than the salaries expected by students who do not intend to study at postgraduate level.

Branch of studies

Another factor that has a significant impact on the employment and salaries of students and graduates is their branch of studies. Among all of the departments examined, the graduates least likely to be hired were those from the university’s Physics Department and Social and Political Sciences Department – with no significant difference between these two departments. Conversely, the graduates most likely to be hired were those from the Department of Education (primary and pre-school education), followed by the Department of Public and Business Administration, the Department of Mathematics and Statistics, and the Department of Economics.

On the other hand, students’ expectations of being hired immediately were not affected by the department in which they were studying, since their likelihood of being hired is not significantly different – with the exception of students in the Department of Public and Business Administration.

As regards pay, graduates of the Department of Education are the best paid, earning salaries which are 49% higher than those of graduates of the Department of Social and Political Sciences. In terms of students’ expectations concerning their anticipated salaries, those in the Education, Mathematics and Statistics, and Economics departments underestimate their future salaries, whereas students in the Department of Public and Business Administration and the Department of Social and Political Sciences expect salaries similar to the real salaries of graduates in the market. Another notable finding concerns the fact that the earning expectations of students in the Department of Physics are 30.1% higher than those of students in other departments, even though the earnings of graduates of this department are actually no different from those of graduates of the Department of Social and Political Sciences.

Policy proposals

Based on its findings, the KOE study went on to present specific policy proposals which seek to increase the information provided to young people on the conditions in the labour market, and to minimise false expectations regarding employment and pay.

Among the main proposals is the need for effective guidance and adequate information for prospective students and graduates on working conditions and their likelihood of being hired after studying in specific university departments. This will enable students to make better decisions when choosing the department in which they plan to study. For this proposal to be successful, the existing guidance structures must be improved – both in secondary and third-level education. The study also recommends gathering data regarding the career progress of graduates of all the higher education institutions, in order to map out policy at government and institution level.

A further proposal concerns the promotion of measures by higher education institutions, for the smoother inclusion of graduates in the labour market. This recommendation highlights the need for direct and more systematic contact between students and the workplace. To this end, specific measures are proposed – such as the organisation of informative visits to workplaces, students’ participation in research programmes and collaborations with prospective employers.

Commentary

The results of the KOE survey indicate that students lack realistic expectations in relation to certain characteristics affecting their employment and pay. The effects which these characteristics have on the students’ expectations of being hired immediately and their anticipated salaries are not the same as their impact on graduates’ employment and real salaries. Therefore, the students appear to either underestimate or completely ignore the importance of certain characteristics on labour market integration, while overestimating certain factors which do not affect graduates’ labour market integration in practice.

One important observation concerns the fact that female graduates continue to receive lower pay than men. As seen in other European countries, bearing this inequality in mind, female students also tend to expect lower pay than their male counterparts. Thus, the elimination of this inequality requires specific policy measures which should be part of a more general programme for promoting equal opportunities in the Cypriot economy and society.

Polina Stavrou, Cyprus Labour Institute (INEK/PEO)

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