Graduate density, gender, and employment

The expansion of higher education is often viewed as reflecting increased demand for skills, whether related to technological change or the growing complexity of the economy. It is also linked to widening pay differentials between the poorly and highly educated. There are reasons, however, to question these associations. Even if demand for graduates is growing the supply of graduates might as a result of the status derived from having a degree still exceed this. The demand for graduates itself need not be wholly tied in with upgrading of the labour force. Graduates could be part of a more flexible workforce who increasingly undertake non-graduate work, thus downgrading their labour-market position. LFS (Labour Force Survey) and BHPS (British Household Panel Study) data are used to show that there has been no major shift in the distribution of graduates in the British labour market, that career starts are increasingly at a lower status point, and that there is a negative effect of graduate density on wages. There are also redistributional effects. There has been a large increase in the social demand for higher education by women, and they have gained from this expansion while men have lost out. In addition, graduate density is positive for non-graduates, who gain from the reduced rewards accruing to graduates. The results call into question the simple idea of a trend towards a demand for increasing levels of skills and qualifications. More attention should be paid to the distribution of skills and to complex interactions within this.