Andrew Norton has been running some interesting posts on over-education. I don’t doubt that some people acquire more education than they need for their jobs (just as others squeak by with less than they really need). But I doubt that over-education is aÂ significant problem. The returns to education have stayed very stable over the past 20 years. If anything, there’s a bigger economic benefit to going to university today than in the past. This suggests that employers think that attending university gives graduates something that’s worth a salary rise. If that were not true, they’d buy a non-graduate, andÂ cut their wage bill byÂ 30%.
Update: Andrew Norton responds. His point (I had misunderstood it) was not that the share of overeducated Australians is rising, but that it’s non-zero. I agree with this, but I think this distinguishes Andrew from many others, who claim that overeducation is more of a problem today than it once was.
On a tangential note, Andrew had a great post last week (reprising his new CIS paper) on the effects that command-and-control planning in the Australian higher education sector has had on the market for doctors.