Overeducation a ‘persistent’ problem as Australians skill up

Australian adults are better educated than ever, but a persistently high proportion of them consider themselves overqualified for their jobs, according to the latest data from a key longitudinal study.

Doctorates per capita more than doubled, and master’s qualifications more than quadrupled, over the first 24 years of the century. However, this “clear upward trend” often proved fruitless at the individual level, with Australia boasting almost two PhD-qualified workers – and four master’s-qualified workers – for every job that requires these credentials.

At the other end of the spectrum, about one in seven jobs need only a 15-year-old’s level of schooling, yet just one in 40 Australian adults completed their education at that age.

The findings, from the latest wave of the Household, Income and Labour Dynamics in Australia (Hilda) survey, suggest the country has a stubborn problem with overeducation. Its effects are “relatively persistent”, and it fuels dissatisfaction with work, pay and overall employment opportunities.

Almost two-thirds of respondents who reported being overeducated were in similar circumstances four years later, and another one-tenth had left work altogether.

The report says that although education levels have risen substantially, the gap between qualifications and job needs has remained remarkably static. “With 50 per cent of Australian workers reporting they believe they are overeducated for their role, we’re exactly where we were in 2012,” said lead author Inga Lass, senior research fellow with the University of Melbourne’s Institute of Applied Economic and Social Research.

Lass said the gap’s “stability” had come as a surprise. Her analysis suggested that although overeducation had increased in some occupations, this had been counterbalanced by rising employment in industries such as education, healthcare and social assistance, where jobs were “quite well matched” to qualifications.

The report charts a steady rise in educational levels, particularly among women. A clear majority of young and middle-aged women now have university-level qualifications.

But, although degrees still attract a salary premium, the dividend is shrinking. In 2024, university-educated women typically earned A$300 (£159) a week more than women with no post-school qualifications, down from A$560 a week more in 2001.

Among men, the gap narrowed from A$560 in 2001 to A$540 in 2024.

Despite this, tertiary qualifications are increasingly becoming a prerequisite for work – particularly full-time work, and particularly for women. More than half of 25- to 44-year-old females without degrees are not in full-time work, and about one-quarter are not in the labour force at all.

And although employment levels have risen to 84 per cent for adult men – a record high in the Hilda dataset – and 76 per cent for women, the proceeds have been neutralised by stagnant wages and increased living costs.

Eighteen per cent of adult and adolescent respondents reported food insecurity, up from 14 per cent in 2020. Approximately one-third were in “housing stress” – expending more than 30 per cent of their disposable household income on accommodation – and half were still living with their parents as they approached their 30s.

Co-author Kyle Peyton said psychological ill health was soaring, with 46 per cent of girls and young women exhibiting “high or very high” distress. “Across every age and sex group, Australians report less energy and more fatigue than they did a decade earlier,” he said.

All this may be eroding people’s trust in the benefits of education. Although the youngest adult cohorts have been the most educated for most of this century, that is no longer the case.

A higher proportion of 35- to 44-year-olds now hold university qualifications than their 25- to 34-year-old peers. Among men, 45- to 54-year-olds are now less likely to have abandoned education without completing school than either 25- to 34-year-olds or 35- to 44-year-olds.

john.ross@timeshighereducation.com