Regardless of the new challenges caused by massification, higher education is expected to enhance graduates’ employability and guarantee their successful trajectory in the labor market, which poses significant risks to the quality of higher education and the fulfillment of its wider missions. A nuanced view is needed to understand the role of higher education and the complementary role of other stakeholders in guaranteeing access to education and skills, as well as labor market outcomes of graduates.

Higher education has experienced multifaceted changes in recent decades and is under pressure not only to provide graduates with skills that fit economic and labor market imperatives, but also to actively contribute to social and economic development. This pressure arises especially from the significant expansion of higher education worldwide, and the underlying argument that a skilled workforce is a driver of economic growth, both for productivity and earnings at the level of individuals, and for resilience and adaptability to economic and technological changes at the country level. The increasing supply of a skilled workforce shows that higher education is responding to economic and social arguments related to human capital theory and the accumulated empirical evidence on the private and social benefits of higher education. However, this has raised a set of questions regarding the responsibility of higher education for the fate of their graduates in the labor market.

It is time to discuss the boundaries between what we can expect from higher education and what goes beyond its responsibility. A more nuanced view is needed to understand the role of higher education in guaranteeing access to education and skills, and in the labor market outcomes of graduates.

Diversity and Segmentation in the Labor Market

The expansion of higher education was expected to provide a more varied program supply to cater to an increasingly diverse student population. This more diverse supply was considered necessary to respond to the needs of the so-called knowledge economy through more varied and complex training profiles. Such differentiation, however, poses important issues as it may be translated into hierarchical or stratified relations between different types of higher education with an impact on the benefits and opportunities associated with a degree. Recent trends have suggested the emergence of different forms of stratification (type of institution or degree, field of study, reputation, etc.) that may differentially affect students’ paths in higher education and, subsequently, in the labor market.

The issues inherent in the transition of graduates into the labor market therefore pose important questions regarding social inequalities. There is growing competition among people applying to prestigious institutions and programs that endow their graduates with high value signals that help them obtain good jobs (while those who go elsewhere must rely on their degree certificates as a “defensive tool” to avoid exclusion from the labor market). Whereas higher education has largely succeeded in creating more opportunities for disadvantaged social groups, it has mostly been unable to break down deep-rooted social inequalities. Recent research shows that the link between higher education and skilled labor markets, though relevant and persistent, has become more complex with increasing segmentation and rising inequalities among graduates. Ultimately, expansion and differentiation often increase the stratification of higher education, which, in its turn, exacerbates the labor market segmentation for graduates.

Matching the Acquired and Required Skills

This emphasis on the expansion of higher education as a driver toward a more qualified and productive labor force has increasingly focused on matching acquired and required education and skills, and on the degree of alignment between the higher education sector and the labor market. This is particularly true in countries where the rapidly expanding supply of graduates has led to graduate unemployment, underemployment, and job insecurity. Such an emphasis has also led to growing attention to issues of under- and overqualification, and their impacts on earnings and other labor market outcomes. These issues have, in turn, increased the pressure on higher education institutions, with their graduates’ labor market outcomes becoming embedded in their external and internal quality assurance and evaluation, and also often linked to their funding.

Although labor markets are adapting to the changing workforce composition, fostering economic growth and qualified employment is a more complex task. While governments can create education opportunities for broader social groups, creating job opportunities is difficult, and surpasses the scope of higher education intervention in society.

Higher Education in Changing Labor Market Contexts

The evidence from countries at different stages of massification and economic performance suggests that higher education per se is unable to solve structural economic and social problems (e.g., labor market regulation, social stratification) that undermine or reduce the benefits of higher education for some groups of individuals and for the society. Yet, there are significant differences at national and regional levels in the response to these common pressures and demands. It is thus important to look at the effects of higher education massification on graduate labor markets from an international, comparative perspective. Such a comparative approach will improve our understanding of how and why the labor market outcomes of graduates vary across and within countries, and what we can learn from different experiences with a view to ensuring that highly educated workers, especially young people, can find decent work. The contributions in the Mass Higher Education and the Labor Market section of this issue underline those factors that affect graduates’ employment and deepen our understanding of the challenges faced by higher education worldwide in addressing the complexities of employability.

Concluding Remarks

Four points stand out from the articles in this section. Firstly, making higher education accountable for the complex problems emerging in graduates’ labor markets hinders the capacity of higher education institutions to deliver their broader and multiple missions. Thus, policy makers must rethink their pressure on higher education to provide ready-to-work candidates, adopting instead a broader and long-term view on the quality and relevance of higher education provision. Secondly, ongoing technological and productive changes will have a (still) largely unknown impact on graduates (and groups of graduates), and higher education needs to approach this in a way that does not make it merely reactive to labor market needs, let alone short-term ones. Although extant research has not yet provided a robust answer on this subject, it is clearly necessary to endow graduates with both scientific expertise and generic skills for an uncertain future. The adequate combination of knowledge and skills will help them acquire new knowledge and competencies more easily, adapt to new workplaces, solve problems, and innovate solutions. Thirdly, policy makers should develop policies supporting graduates’ transition into the labor market through cyclical responses and structural reforms that mitigate the impact of economic recessions and reduce the entrapment of graduates in low-quality jobs, protecting against the vicious circle of precarious work and spells of unemployment. Finally, we need to go beyond general statements about the articulation between higher education and the labor market. Further comparative studies are needed to deepen our understanding of graduate labor markets in different countries and regions, and of the solutions being implemented to improve the quality of graduates’ employment outcomes in a variety of political, economic, and social contexts.

Fátima Suleman is professor at Instituto Universitário de Lisboa (ISCTE-IUL) and deputy director at DINÂMIA'CET (Centre for the Study of Socioeconomic Change and the Territory), Lisbon, Portugal. E-mail: [email protected].

Pedro Videira is researcher at Instituto Universitário de Lisboa (ISCTE-IUL) and DINÂMIA'CET. E-mail: [email protected].

Pedro Teixeira is professor at the faculty of economics of the University of Porto and director of CIPES (Centre of Research on Higher Education Policy), Porto, Portugal. E-mail: [email protected].

The articles in this section are based on the recently published book Mass Higher Education and the Changing Labor Market for Graduates: Between Employability and Employment, which may be found at https://www.elgaronline.com/edcollbook/book/9781035307159/9781035307159.xml.