OECD Education Working Papers
This series is designed to make available to a wider readership selected studies drawing on the work of the OECD Directorate for Education. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language (English or French) with a short summary available in the other.
- ISSN: 19939019 (online)
- https://doi.org/10.1787/19939019
Effects of Tertiary Expansion
Crowding-out effects and labour market matches for the higher educated
This paper examines crowding-out effects and the labour market match for the tertiary educated in
26 OECD countries, using attainment data and data on labour market outcomes from Education at a
Glance 2006. A first-difference approach is applied on a three-period, pooled country-panel to examine the
effects of changes in tertiary attainment levels against changes in labour market outcomes over time. The
policy questions in this paper focus on the potential negative short-term effects that mismatches between
the supply of and demand for higher-educated individuals might bring about.
There is no evidence in the current data suggesting any crowding-out effects of lower-educated from
higher-educated individuals. On the contrary, there seems to be positive employment effects for individuals
with less education in countries expanding their tertiary education. Labour market outcomes for the upper
secondary educated appears to be less influenced by the expansion of tertiary education, but there is no
indication that tertiary educated individuals, on average, are displacing (crowding out) upper secondary
educated individuals from the labour market.
Similarly, the job market for the tertiary educated appears to be little influenced by the expansion of
tertiary education. There are some indications that relative unemployment (relative to upper secondary) for
the tertiary educated has been diluted to some extent, but this appears to be more related to the upper
secondary educated, relatively speaking, strengthening their labour market positions vis-à-vis tertiary
educated individuals in general. The earnings advantage (premium) for tertiary educated individuals in
comparison with upper secondary educated individuals is still on the rise, which suggests that, on the
whole, demand outstrips supply in most countries.
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