Labour market trajectories of the highly educated – Employment, unemployment and marginalisation [Finished]

This project resulted from an invitation for a tender by the Ministry of Employment and the Economy entitled Research on unemployment and use of employment services among the highly educated. The results of the study concern the labour market situation of the highly educated and the main changes having occurred in this respect since the early 2000s. With due allowance made for the shortcomings of the data used, particular attention is paid to the prevalence, repetition and duration of unemployment spells and the use and role of employment services in these contexts. Emphasis is also paid to the marginalisation risk of the highly educated and eventual changes having occurred in this risk over time. Throughout, comparisons are made across the highly educated differing in the level of their degrees and fields of study. Additionally, attempts are made to explore by means of statistical models to what extent the observed differences between these education categories reflect differences in other key individual characteristics rather than educational background. These other factors include gender, age, geographical location and time elapsed since completion of a degree, but also aspects such as distinct features of the unemployment experienced and the use of employment services.

The study builds on two separate individual-level datasets. The main data source is the so-called FLEED data compiled by Statistics Finland, which is a matched longitudinal employer–employee database. The investigated time period covers the years 2000–2012. For the purposes of our study, the data was restricted to highly educated people aged 18–64. The other individual-level dataset was constructed by the Ministry of Employment and the Economy based on information available in the data system comprising information gathered from public employment agencies. The dataset made available to us covers all those highly educated persons who had experienced unemployment at least once during the period 1.1.2010–30.4.2015.

Among the main findings of our study are the following. The number of highly educated people has increased markedly since the turn of the millennium. Nonetheless, there have been at most small changes in the distribution of those with a higher education across different degree levels and fields of study. The employment situation, as well as its trend over time, varies substantially depending on the degree level and field of study of the highly educated: some have seen their employment situation strengthen while others have faced a clear weakening of their employment prospects. Additionally, many have seen their labour market career becoming more uncertain. Concomitantly, there are clear-cut signs of increasing unemployment. This holds true for all degree levels and fields of study. Another worrying feature is the markedly large number of highly educated outside the labour market. Indeed, in some education groups their number exceeds the number of unemployed.

Another conspicuous finding is that the post-unemployment trajectories look very similar irrespective of the degree level or field of study that the highly educated person has completed. In other words, the highly educated tend to leave unemployment following similar typical pathways. The main difference shows up in the share following each distinct pathway, implying that the degree level and field of study mainly affect the way and speed at which the highly educated person leaves (or does not leave) unemployment. Furthermore, these typical pathways have remained principally unchanged since the early 2000s. This finding is striking in view of large differences across education groups in unemployment levels and trends. The results also indicate that unemployment severance is often challenging. Simultaneously re-employment opportunities are diverging across fields of study. Employment services nonetheless seem to be used in quite a mechanical way. On the whole, the risk of prolonged unemployment depends on both the degree level and the field of study. Educational choices do matter.

The final report (in Finnish) was published on 31 May 2016. The report can be downloaded here.