Demand for graduates ‘outstripped supply’ in Germany

Despite fears that a new generation of graduates will find themselves serving coffee, Germany’s university leavers have fitted successfully into the economy, analysis finds

February 20, 2018
Barista making coffee
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Since the turn of the millennium, the German economy has successfully absorbed rapidly expanding numbers of graduates, an analysis has found.

In many countries, Germany included, there is fierce debate over whether university expansion has gone further than the economy needs. But this latest research suggests that the proportion of graduate-level jobs actually outpaced an increase in graduates, and that university leavers are relatively unlikely to find themselves serving coffee or driving a taxi.

By 2012, about 29 per cent of jobs in Germany were considered graduate level, but just 19 per cent of male 25- to 34-year-olds and 22.5 per cent of women in this age bracket were graduates.

Since 1999, there appears to have been “rising excess demand for graduates”, finds the paper “Against the grain? Assessing graduate labour market trends in Germany through a task-based indicator of graduate jobs” from Golo Henseke, a research associate at the Centre for Global Higher Education at UCL.

Graduates who are “underemployed” – that is, working in occupations where a degree is not strictly necessary – “do not appear to work in routine occupations”, it also found.

Male “underemployed” graduates in particular “frequently work in occupations that are close to graduate roles in terms of job complexity and knowledge requirements”. Their female counterparts worked more commonly in jobs that “formally require upper secondary vocational qualifications. But these occupations are far from low-skill”, the research finds.

Having a degree increasingly pays off in terms of salary. The male graduate pay premium grew from 18.9 per cent in 1999 to 32 per cent in 2012, although for women it improved only slightly over the same period to 26 per cent.

“In all, the growing supply of graduates especially among younger workers was not only met but surpassed by the expansion of graduate jobs,” concludes the paper. “In the female workforce, this translated into falling underemployed at a stable wage premium, whereas in the male workforce the underemployment rate remained constant while the pay premium associated with higher education rose significantly.”

“These patterns indicate that the labour market has so far been able to absorb the growing supply of graduates well,” it adds.

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