Over the past two decades there has been a marked expansion of access to higher education in Australia and consequent growth in the ‘degree intensity’ of the Australian workforce. The increase was particularly notable during the 1990s. Over the five-year period August 1991 to August 1996 the number of Australian residents holding qualifications at the level of bachelor degree (or above) increased by 455,996 from 996,650 to 1,452,694. This represents a massive 46 per cent increase, far in advance of the overall growth in Australia’s population of 5.9 per cent during the same period. In 1996, of all people aged 15 years or more, 10.4 per cent held degrees, compared with 7.6 per cent in 1991. Further intensification in the ‘degree intensity’ of the work force, especially among workers aged in their twenties, is inevitable because of the high number of students currently enrolled in the higher education system.

The extent of the increase can best be seen through a comparison of the proportions of the younger age cohorts who were qualified to bachelor-degree level or above over the decade 1986 to 1996. As Table 1 shows, the proportion of the 20-24 year age-group holding degrees has more than doubled (4.7 per cent to 10.6 per cent) between 1986 and 1996. In the 25-34 year age-group the proportion also increased markedly from 9.3 per cent to 15.6 per cent. The gender balance has also swung decisively towards women.

There are many social and economic benefits for the Australian economy, Australia’s young people and employers from a better educated population. However, most graduates want to find work at professional or administrative levels and there must be questions about the capacity of Australia’s labour markets to absorb graduates at the pace at which they were being produced during the early 1990s. The balance of outcomes depends (among other factors) on the qualification fields in which the growth is occurring and the extent to which this growth is matched by demand for the expertise in question.

In exploring these issues we have used two customised matrices drawn respectively from the 1991 and 1996 Censuses which provide information on the all degree holders by field of qualification, gender, birthplace, age and labour-market situation. We begin with an examination of the sources of graduate supply, including the role of domestic training and immigration, and then turn to the pattern of growth by qualification field and the changing gender balance within these fields. We finish with a preliminary analysis of labour-market outcomes for recent graduates by field of qualification.

A 46 per cent increase in graduate numbers in just five years seems extraordinary in the current context of gloom about university funding. But it is a predictable consequence of the expansion of university enrolments in the recession of the late 1980s and early 1990s and the continuing high intakes of degree-qualified migrants. In the early 1990s, when school leavers were struggling to find employment, university enrolment was an attractive option which the Labor Government and the universities in turn were happy to accommodate by providing extra places. As a consequence, bachelor-level completions (that is completions excluding post-graduates) reached nearly 100,000 in 1995, double the annual numbers of the late 1980s.

Given this level of local supply, it is no surprise that, as of August 1996, there were 458,000 persons who had been resident in Australia before 1991 and who indicated that they gained their qualifications in Australia between 1991 and 1996. In addition, there were another 100,000 Australian residents who were degree holders and who had migrated to Australia between January 1991 and August 1996, almost all of whom would have completed their degrees overseas before entering Australia.

If these new local graduates and the overseas-trained graduates are combined, the total comes to some 550,000. This is well above the net growth in degree holders between August 1991 and August 1996 of 455,996 identified at the outset. The likely reason for the apparent excess is that, during the five-year period, Australia’s stock of degree holders was reduced by the out-migration of Australian residents, whether Australian-born or former migrants, and by deaths.¹

As suggested earlier, the implications of growth in graduate numbers depend in part upon the fields of qualification in which the growth is occurring. The Census form requires all adults who hold post-school qualifications to indicate the subject area in which they hold their qualifications, regardless of whether they are employed, unemployed or not in the labour force. Fortunately the definition of these fields remained the same between the 1991 and 1996 Census dates. We have summarised these subject areas so as to match twelve major academic disciplines plus a residual ‘other’ category. A comparison of the numbers holding bachelor degrees or higher level qualifications in these disciplines in 1991 and 1996 is provided in Table 2.

The most rapid expansion was in business and administration. Though not shown in Table 2, further disaggregation of this category revealed that this expansion was particularly rapid for both males and females in the age-groups 15-24 and 25-34. Slightly more than 20 per cent of the overall growth in the number of degree holders in these age groups between 1991 and 1996 occurred in the business and administration field. Next in importance, at least for persons aged below 35, was the field of society and culture (Arts/Humanities/Social Science), followed by nursing and the natural and physical sciences.

The number of graduates in the field of education grew by 87,230, or 46 per cent, across all age groups (see Table 2). This may surprise, given the depressed demand for teachers and cut backs in teacher-education courses in recent years. Most of this growth reflects older persons who already held degrees in other fields in 1991 and who had subsequently upgraded their qualifications to education post-graduate degree level. Only a relatively small proportion of the 87,230 increase occurred in the age groups 15-24 and 25-34.

Table 2 indicates that a large part of the absolute growth in graduate numbers between 1991 and 1996 occurred in fields that are relatively non-vocationally specific. We have included business and administration in this category because, though such courses are attuned to business needs, they are usually not tailored to specific professional or managerial positions. Rather, like courses in the arts and sciences, graduates are expected to acquire more generic, analytic skills of value to employers across a range of business, finance and community-service areas. All of these non-vocational fields were areas in which the universities could expand the number of student places quickly. This is because of their relatively low cost (in equipment or requirements for specialist staff) and because there was usually little resistance from external accrediting agencies.

Growth was more modest in the vocationally specific fields, including law, medicine, accounting, building design and computer science. In the case of computer science the rate of growth was high, but from a low base. Many more students would have entered some of these fields if additional places had been available. The rapid growth in the number of nurses with degrees appears to be an exception, given the highly vocationally specific nature of their training. But this growth largely reflects the full implementation of the transfer of nurse training from the hospitals to the universities and the relatively low base of degree-qualified nurses in 1991.

In some of the vocationally specific fields the growth rate would have been far lower in the absence of migration. As far as engineering is concerned, migrants arriving in Australia after 1990 were responsible for about half the growth in the field between 1991 and 1996. This was true of medicine as well. The Labor Government proscribed any further expansion in medical student numbers during the 1990s, and also tried to reduce the inflow of overseas doctors. But, as the influx of nearly 5,000 migrants with degrees in medicine indicates, it did not make much progress in this latter objective, largely because it could not control the movement of medically-trained personnel entering under the family-migration categories or from New Zealand.

This brief overview suggests that the dramatic expansion of degree-holders between 1991 and 1996 was not linked directly to demand from employers for specific skills such as computing and accounting, skills which remained in short supply throughout most of the period from the late 1980s to the present. Rather, at a time of rapid demand for places from prospective students, the Government and the universities accommodated these aspirations (at least until recently) by allowing the system to expand in areas where restraints of cost or accrediting barriers were least evident. There is no doubt that universities were responding to student demand for these courses in the late 1980s and early 1990s. However, during this period, demand was reasonably assured across the higher education system given the subdued state of the labour market for school leavers.

The migration component of the growth shown in Table 2 reflects quite different factors, including the strong interest on the part of Asian and Eastern-European graduates in coming to Australia, and the Australian Government’s interest in encouraging migrants with degree-level credentials.² For some fields (including engineering and medicine) migration represented a major component of the growth in graduate numbers. The high level of migrant engineers was not a consequence of any deliberate selection priority on the part of the Australian Government, but rather of the number of engineers anxious to come to Australia. The Government wanted highly skilled migrants, but largely left the decision as to which skills to the migrants themselves.

By 1996, just on half (49 per cent) of the total number of degree-qualified persons in Australia were women. They will soon constitute a majority of all those with higher-education credentials. Women made up 59 per cent of the 455,996 net growth in the number of degree-holders between 1991 and 1996. This trend reflects the fact that, in every year since 1984, more women than men have commenced university courses.³ By 1995, some 56 per cent of the total commencing undergraduate class were women and 44 per cent were men.⁴ As a consequence, by 1996, the ‘degree intensity’ was stronger for women in the age-groups 20-24 and 25-34 than it was for men (see Table 1). Not only did a higher proportion of women hold degrees but, as shown in Table 3, sixty-one per cent of all degree holders aged 20-24 were women and, of the graduates aged 25-34, fifty-four per cent were women. It is not until we get to the 35-44 year-old age group that the number of men with degrees exceeds women, but only just, at 51 per cent of the total.

Table 3 also indicates the numbers of graduates in each qualification field by gender and age-group and the percentage of graduates in each category who are female. The pattern is simple but arresting. It can be seen clearly in the trend line across the share of women for each qualification field for each age group. In almost every field the female share has grown significantly. The only exceptions are with nursing (where women dominate nevertheless) and computer science. In the latter case, younger women have only marginally advanced their share beyond the 26 per cent level attained by women aged 35-44. Women constitute the major component of growth in all of the more non-vocational fields. However, their progress is also evident in the highly prized and competitive-entry fields of law, medicine and accounting. As a consequence, by 1996, there were just as many females aged 15-24 who were accountancy graduates as there were males, and more female doctors and lawyers than male ones.

Nevertheless, there may be justification for continuing the equity programs for non-traditional areas, such as engineering and computer science, where younger women continue to be under-represented relative to men. But equity strategies need to be premised on a clear understanding as to why women are slow to move into these fields.

Why are men less likely than women to pursue higher education studies? One possible answer is that men have other occupational options available, particularly in the trades. These options may be seen by men as both personally and financially rewarding. However, these options are not as readily accessible to women. The availability of such alternatives may explain why young men were not as keen as young women to take up places in the more non-vocational courses made available during the early 1990s.

Unpublished data drawn from our customised 1996 Census matrix indicate that men aged 15-24 and 25-34 are better qualified than their female counterparts if all degree, diploma and skilled-vocational qualifications are combined. For example, for the 25-34 year old group, 44 per cent (596,522) of the men held such qualifications. Of these men, 318,288 held skilled-vocational credentials. Only 29 per cent (406,922) of the women held degree, diploma and skilled-vocational qualifications. But, of these women, just 58,617 held skilled-vocational credentials. Most of these credentials are in the engineering, building and architecture trades and the category as a whole remains overwhelmingly male (see Table 4).

From the point of view of unemployment rates, there is little difference between the males with skilled-vocational qualifications and male degree-holders. The most striking gulf, as far as the relationship between unemployment and qualification is concerned, is between those with only basic qualifications, or no qualifications at all, and those with skilled or higher qualifications.

These comments lead to some final observations on the employment prospects of degree-qualified persons, particularly women. Could it be that the rapid increase in the supply of such graduates may result in disappointing job outcomes?

Our comments here will be limited to some preliminary results drawn from 1996 Census data which describe the job situation for degree-qualified persons by age, gender and field of qualification.

 

Table 4: Labour force participation and unemployment rates for males and females aged 15-24 and 25-34 by qualification level
	Participation rate	Unemployment rate	Total
Bachelor degree or higher
Males 15-24 yrs Females 15-24 yrs	88.2 89.6	8.0 5.6	54,910 86,458
Males 25-34 yrs Females 25-34 yrs	93.9 84.9	4.5 4.1	198,057 231,095
Undergraduate and associate diploma
Males 15-24 yrs Females 15-24 yrs	85.1 86.4	11.3 8.9	31,840 58,012
Males 25-34 yrs Females 25-34 yrs	94.0 78.8	5.2 5.1	80,177 117,210
Skilled vocational qualification (includes all trade certificates)
Males 15-24 yrs Females 15-24 yrs	94.8 84.7	8.1 11.9	112,438 29,980
Males 25-34 yrs Females 25-34 yrs	95.4 71.4	6.0 7.1	318,288 58,617
Basic or no qualification a
Males 15-24 yrs Females 15-24 yrs	60.3 57.3	19.4 15.9	1,107,081 1,091,590
Males 25-34 yrs Females 25-34 yrs	84.1 60.5	13.7 9.7	762,296 978,957
a Many of those aged 15-24 reporting no qualification would still be in the education system or have yet to complete their post-secondary qualifications. This explains the low participation rates but not the high unemployment rates of this group.

There is no doubt that the rate of growth in graduate numbers will exceed labour-market demand if the only deter minant of that demand is expansion in the occupations which have traditionally employed graduates. This factor is what Tom Karmel in his study of graduate numbers refers to as the ‘occupational effect’. According to Karmel’s study this effect accounted for just 16.1 per cent of the overall growth in the number of employed graduates in the period 1980 to 1993. Far more important is what Karmel refers to as the ‘qualification effect’ which refers to the increased share of employment in particular occupations by those holding degrees relative to non-degree-holders. In other words, degree holders are filling positions that once were filled by non-degree holders. Karmel’s analysis suggests that this effect accounted for 46.4 per cent of graduate job growth over the 1980 to 1993 period. The rest is the ‘employment-growth effect’, growth due to the overall increase in employment.⁵

The pattern of industry growth in Australia clearly favours graduates, given that it is heavily weighted to service areas within the private and public sector, many of which employ large numbers of professionals holding graduate qualifications. But, as is evident from Karmel’s analysis, and from the continuing high rate of graduate numbers revealed by our data, graduates will have to find new occupational slots within and outside these service industries. This may mean moving to occupational levels which are currently regarded as sub-professional levels, such as in the clerical and sales fields.

The issue is not one of employment per se. Table 4 shows that those holding degree qualifications in the 15-24 and 25-34 year age groups, including women, are almost all in the work force and in employment. Their work force participation rates are much higher than similarly aged males and females without qualifications, and their unemployment rates are less than those of non-degree holders.

The possession of a degree is likely to confer an advantage in the labour market relative to those without degrees. But at what level? We know from the annual Graduate Destination Surveys conducted by the Graduate Careers Council (which survey graduates in April of the year following their graduation), that a substantial minority of graduates do, at least initially, have to accept sub- professional employment. This is particularly true of those holding qualifications in non-vocational fields. Table 5, which is derived from our 1996 Census matrix, explores the situation of recent graduates (defined as those aged less than 25) as of August 1996. It covers all such graduates, including recently arrived migrants, most of whom would have completed their qualifications overseas.

The results show a clear split in outcomes. Those holding vocationally specific qualifications in the areas of medicine, computing, law, education, nursing, accounting and engineering are generally doing well in converting their qualifications into professional-level employment. On the other hand, only a minority of those holding non-vocational qualifications have succeeded in obtaining professional-level positions. Most are holding sub-professional positions, though a minority are unemployed or not in the labour force.

These results do not necessarily reflect the longer-run outlook for graduates. The results may simply mean that many graduates will have to spend some time in sub- professional positions gaining workplace experience before moving to the professional or administrative level. One benefit from having better-educated people in sub-professional positions is that they will bring a greater range of skills to these jobs, so resulting in higher productivity. Nor should these results be interpreted to mean that the higher education system has expanded too rapidly. Rather, the results suggest that, with the extraordinary pace of change in the ‘degree intensity’ of the Australian work force, some, perhaps painful, adjustments will be required, including adjustments in the short-term career aspirations of graduates themselves.