Over-education

If we accept that the distribution of income and wealth is unjust, and that it would be more just if it were more equal, we cannot get around the solution that money has to be redistributed from the rich to the poor 1.

It is absolutely desirable that every child com­pletes secondary education and that extra resources should be devoted to the disadvantaged rather than to the most advantaged.

However, providing more education and training to those with the least will not change the distribution of income unless the nature of the jobs available changes. But there is no mechanism for pro­ducing better jobs in response to better qualifications.

A high level of qualifications merely inflates the qualifications that employers demand for any given job, regardless of the necessity for them. Underemployment - holding jobs for which one is overqualified - is already endemic.

Andre Gorz has pointed out that the high rate of unemployment among the unskilled is due ... to the fact that (both in France and in Germany) one-third of skilled or highly skilled people are in unskilled occupations (for want of being able to find anything better) and have thus elbowed out those who ought nor­mally to fill such jobs.2

The more training and education a population has, the more pro­nounced will be the phenomenon of underemployment.

In the USA, the average level of education in the low-wage labour market is considerably higher now than in earlier periods. Since 1979, the share of workers in the low wage sector with at least some college education has risen by 13.5 per cent.... This is, simply the outcome of long-term educational upgrading of the labour market.3

Even in the 1980s 'about 20 per cent of college graduates were working at jobs that don't normally require a college degree'.4

The demand for labour of any particular sort depends on how many people of that sort it is profitable to employ, given the output and the technology. Providing the existing supply is adequate, more supply will not create more demand.

Alison Wolf has written: 'I find it hard to construct a convincing argument that more sixth-form qualifications and more degrees are needed so that people can stack shelves, swipe credit cards or operate a cappuccino machine effec­tively' Pointing out that 'the fastest-growing job in the 1980s was "postman"' and that 'that of the 1990s looks like being "care assis­tant" in nursing homes and hospitals', she adds wryly that 'it is impor­tant to remember just how many jobs like this do exist, because to listen to a lot of rhetoric you would think that every semi-skilled or unskilled job was going to vanish tomorrow, if not early this after­noon'.5

Similarly, in the USA 'among the ten occupations the Bureau of Statistics says will add the most jobs over the next ten years, five are low-wage positions, including retail salespersons, cashiers and home health aides.'6 It is always worth remembering that, even if every adult had a PhD, there would still be a need for postmen and shop assistants. The result would simply be an updated version of the gondoliers song, where

'The Noble Lord who rules the State / The Noble Lord who cleans the plate / The Noble Lord who cleans the grate'.

Instead of Noble Lords, as in The Gondoliers, we would have 'The PhD who cuts the brain, the PhD who drives the train, the PhD who clears the drain', and so on.7

Let us define somebody as 'overeducated' for their job if 'others with the same qualifications are employed elsewhere for much more pay'.8 Then, for the UK:

We definitely overeducate.... Spiralling numbers of people with formal qualifications mean that employers can now insist on employees having more education than in the past, and will also suspect that anyone without qualifications isn't worth having. The result is that jobs which twenty years ago were done by people who had left school at sixteen or eighteen now go only to new entrants who have degrees.9

In most cases the jobs are the same and call for the same abilities, and there is no evidence to support the idea that putting somebody with more education in the same job will result in its being done better.10

Thus, having more education pays off for the individual because what matters is not how much you have but how much you have in relation to others. But this is quite consistent with the possibility that those with more education will be paid less now than those with less education were paid before.

This is precisely what has in fact been happening in America. Since the 1980s, wage rates over the whole lower end of the range have been declining. Yet, 'the propor­tion of data-entry clerks with a high school diploma rose between 1989 and 1997 from 38 per cent to 50 per cent.' Comparable figures for telephone operators were 26 per cent and 46 per cent and for elec­tricians and telephone repairers from about a third to a half. Yet all these (and other occupations with similar increases in qualifications) exhibited 'greater than average declines in wages'.11

However, there is an even more fundamental issue. Peter Dolton and Anna Vignoles writing in 1997, posed the question ‘Do graduates, for example, bring skills and attributes to a job which enable them to do a non-graduate job more effectively?’ If graduate secretaries or graduate sales staff are better at their jobs because of their higher education, clearly "over-education" may be less of a problem than first thought. Until we can identify the skills and qualities that higher education develops in individuals and relate these attributes to activity at work, it is premature to claim that we have too many graduates. 12

There is a need to consider the effects of greater numbers of graduates on the private and social rate of return to a degree. It is important to stress that concerns about "over-education" are only relevant because, for the moment at least, we continue to subsidise students' higher education.
If there is indeed widespread graduate "over-education", it would not be optimal for the state to continue to subsidise growing numbers of graduates. This is not to say that greater numbers of people should not experience higher education, merely that they might pay for more or all of it themselves.

Perhaps most importantly, education generates externalities, benefits to the individual and society that are not taken into account by looking at job title and earnings. There is almost overwhelming evidence that education improves parenting skills, makes a person less likely to divorce and commit crimes and improves health, to name but a few benefits. When the cultural benefits of having a more educated population are weighed, worries about "over-educating" people seem less relevant.



1 Barry Brian, (2005) Why Social Justice Matters (Polity Press, 2005) pp 169-171
2 Andre Gorz, Reclaiming Work: Beyond the Wage-Based Society (Cambridge: Polity, 1997), pp. 81-2.
3 Jared Bernstein, 'Two Cheers for The Earned Income Tax Credit', pp. 153-63 in Robert Kuttner, ed., Making Work Pay: America after Welfare (New York: The New Press, 2002), p. 160.
4 David R. Howell, 'Institutional Failure and the American Worker: The Collapse of Low-Skill Wages', pp. 214-17 in Frank Ackerman et al.. The Political Economy of Equality (Washington DC: The Island Press, 2000), p. 216.
5 Alison Wolf, Does Education Matter? Myths about Education and Economic Growth (London: Penguin Books, 2002), pp. 48-9.
6 Bernstein, 'Two Cheers for The Earned Income Tax Credit', p. 160.
7 Sir W. S. Gilbert, The Savoy Operas (London: Macmillan, 1968), p. 528.
8 Wolf, Does Education Matter?, p. 50.
9 Ibid., p.51
10 Ibid., p. 52.
11 Howell, 'Institutional Failure and the American Worker', p. 193.
12 Peter Dolton and Anna Vignoles Times Higher Education 23 May 1997