Dec 08, 2021

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Going to a college or university has become an ideal for high school graduates around the world. As the new academic year opens, would-be bachelor’ degree recipients have to face the fact that higher education does not always guarantee a job in their future.


Higher education certainly encourages innovation and employment, improves productivity in a way that strengthens economic growth and boosts the earning capabilities of the individual worker. In addition, research has found that higher education leads to greater political awareness and higher rates of participation in elections, lower levels of crime and poverty, higher employment levels and less reliance on government assistance. It has been linked even to better health.


But nevertheless, with the considerable increase in higher education rates over the past decades and despite the many positive aspects of higher education, there are incidences of “overeducation,” where an individual’s level of education is above that required for his employment. 


This means that individual resources and those invested by the public for educational achievement are not used efficiently in the labor market, thus lessening the individual and social return on the investment.


A new study by economist Haim Bleikh at Jerusalem’s non-profit, independent Taub Center for Social Policy Studies examines the phenomenon of overeducation among Israelis with an academic degree who are employed in occupations that do not require their level of education. The research finds that between 2017 and 2019, 17.5% of workers with an academic degree were classified as being overeducated for their jobs. The most common explanation for the phenomenon is related to the individual’s field of study. The phenomenon is more common among those who studied the humanities and social sciences, while those who studied law, medicine, mathematics, statistics and computer sciences are much less likely to find themselves working in positions requiring lower levels of education than those they possess.


In general and relative to other developed countries, Israelis are well educated, with many of them having earned college and university degrees. It is likely that this figure will rise even more with the greater enrollment rates at institutions of higher education in the wake of the Covid-19 pandemic, Bleikh suggested. 


So what are the reasons found in the study for overeducation? It is well known that having good language skills contribute to better integration into society and are critical in smoothing one’s entrance and optimal integration into the labor market. So those those with higher levels of language proficiency have a greater chance of finding work that is commensurate with their skill and education level and that compensates them well, while those with poor proficiency have a higher chance of working in an occupation that does not require a higher degree and are likely to be categorized as overeducated. 


In Israel, language skills are especially important since the country is constantly absorbing new immigrants. The research found a high share of overeducation among young immigrants (ages 25 to 44) who were educated abroad and who have poor Hebrew language skills. This finding is significant for this younger generation of immigrants (as opposed to older ones) since they face many years in the work place.


As a rule, continued Bleikh, overeducation is more common among younger people at the beginning of their careers since they haven’t yet gained relevant work experience. For most, the match between higher education and occupation increases with time and with the accumulation of occupational experience. 


Nevertheless, his research shows that workers who change their place of employment after the age of 45 have a higher chance of finding themselves overeducated for the job. The main reasons are that their skills may be outdated because of the speedy advances of technology, a lack of expertise in areas required in today’s labor market and a lack of appropriate skills. An additional factor that may contribute to the phenomenon is ageism, that is, job discrimination on the basis of age.


Bleikh’s research is the first in Israel to examine the relationship between overeducation and commuting. On the whole, employment opportunities are often quite dependent on the individual’s geographic flexibility – the willingness to either move one’s place of residence or spend more time commuting. The data show that the greater the flexibility, the lower the overeducation levels. Accessibility to a private car for job seekers improves their mobility and allows people to seek a good job over a greater radius, so this contributes to a better fit between education levels and the job requirements.


Thus, language proficiency, age and geographic limitations, like living far from employment centers and a lack of mobility are likely to force better-educated employees to accept employment that doesn’t require their level of education. The Covid19 crisis closed the skies, and the plans of many young Israelis to travel, pushing them to begin their higher education studies earlier than they may have otherwise. 


Despite the implicit advantages – increased productivity and greater employment prospects for many young people – this is likely to widen the phenomenon of overeducation in Israel in the coming years, the Taub Center economist concluded.