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October 05, 2015

Does education prepare you for working life?

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As new school and university semesters are beginning in many regions, thoughts turn to the importance of education and how effectively it prepares young people for working life. Education’s main purpose is to equip children and young adults with the skills they need to enter the labor market and build successful careers. Whether schooling is fulfilling this purpose suitably is the subject of much research and discussion.

Unfortunately, the empirical evidence shows that education is currently not adequately preparing young people for labor market success in many countries, causing the paradoxical issues of prevalent skills shortages alongside high levels of youth unemployment. This skills mismatch is a real challenge faced by many economies, as workers being in a job badly matched for their skill set has negative implications for individuals and economies.

Peter Sloane has written an article on this, titled Overeducation, skill mismatches, and labor market outcomes for college graduates, for IZA World of Labor. Sloane writes that “many college graduates are employed in jobs for which a degree is not required, and which the skills they learned in college are not being fully used.” This over-skilling causes low job satisfaction and lower productivity which makes it harmful to both employee welfare and employer interests. Having over-skilled graduates in non-graduate positions has repercussions for less-educated and lower-skilled segments of society who cannot then get the jobs suited to their skill-set.

The skills mismatch problem means that engaging employers in education policy is becoming a priority for governments and schools globally. Young people are entering the labor market with more years in education and more qualifications than ever before, but are finding it incredibly difficult to secure the jobs they want (or believe they are entitled to). Governments must support policies to bring the worlds of education and employment closer together. Urging educators and employers to work more closely will improve young people’s preparation for contemporary careers and help them to more successfully transition from school to work. Research from the UK’s Education and Employers Taskforce shows that successful policies in schools to prepare pupils for work include offering effective careers advice for the current/future job market, practical guidance on how to write a CV, how to apply for a job, and interview practice.

In developing countries, better information on university quality may reduce overeducation and skills mismatching. Gustavo Yamada argues, in his recently published IZA World of Labor article, that it is the rapid increase in the number of university graduates that may be causing the skills mismatch, particularly in developing countries with weak job markets. Yamada writes, “More university graduates could exacerbate unemployment, underemployment, and overeducation of professionals,” and goes on to suggest that, “policies should focus on the collection and dissemination of information on employability by career and institution.” This will ensure that young people are aware of the likely returns to their investment in higher education, before they undertake a university degree.

Another method for increasing the skilled workforce, which may prevent overeducation and skill mismatching, is shortening the number of years students spend in secondary school. In his IZA World of Labor article, The impacts of shortening secondary school duration, Stephan Thomsen writes that, “Shortening secondary school can boost the sustainability of tax and social security systems by enabling people to work longer. It can also ease the rising shortages of skilled workers through intergenerational transfers of know-how.” The twofold benefits of shortening secondary school duration (easing skill shortages, whilst also increasing the skilled workforce in aging societies) suggest that this could be a good problem-solving policy decision for the future. Although actions such as this may seem controversial, and may prove unpopular with parents who want their children to be as highly educated as possible, hard decisions need to be made by policymakers to ensure that today’s education systems are not failing the workers of tomorrow. 

Read more of our Education and Human Capital articles.

Please note:
We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.