Poor recent graduate employment outcomes inevitably raise questions about whether this shows just a slow period of labour market adjustment, or whether it is a sign of something more serious. One theory is that early periods of unemployment or low-skill employment have a scarring effect on future employment. The basic theory is that during unemployment existing skills deteriorate and new skills that come with work experience are not developed. Either or both of these things happening or employers assuming from CVs that they may have happened compound the original employment problem. What could be a temporary setback is turned into a long-term disadvantage.

For graduates, the early 1990s recession provides an opportunity to look at potential scarring effects. There were three years of more than 25 per cent un- or under-employment from 1992-94, and 20 per cent plus for 1991 and 1995.

The ABS Learning and Work survey* has a question on when the respondent graduated. On a question asking what impact their qualification had in their working life in their first six months, those completing between 1990 and 1994 had the highest rate of saying ‘no impact’, 26 per cent. The next worst result was 23 per cent for those completed between 2000 and 2004. Unfortunately, the labour force results are hard to interpret due to sample size issues. The ABS says the margins of error are too high on all the unemployment results for them to be reliable. The not in the labour force results are higher for 1990-94 graduates than either 1985-1989 or 1995-99 graduates. However this is almost certainly due to women absent from the workforce for family reasons (if I break the results into male and female I get the expected outcome, but with the ABS again warning that the margins of error are too high).

Another option is to use the census, which has problems with people not answering all the questions but still has many respondents. While the census has no question on exactly when degrees were completed, as most students start bachelor degrees in their late teens we should be able to see any obvious scarring effects. My theory here is that people aged 39 to 41 years at the time of the 2011 census were likely to have graduated into the early 1990s recession. If there is a scarring effect, they should have worse outcomes than people who are a little younger or older. The slide below shows the results for being in work, for male bachelor degree holders only, as the female not in labour force results are too ambiguous.

What surprised me about this is how employment drops for men in their forties. While there is a slight increase in unemployment for the target 39-41 years group compared to younger men this looks like a life cycle effect. The same phenomenon is evident in the 2006 census. So overall I would say there is no strong evidence of a scarring effect on overall employment levels of graduating into the early 1990s recession.

Update 9 January: After yesterday’s post seemed more interesting for the activities of men in their forties than for employment scarring, I wondered if the issue might at least partly be residualisation of the bachelor-degree group. In other words, the more successful men go on to postgraduate study leaving the men with bachelor degrees who have given up looking for work as a larger share of the remaining people who say a bachelor degree is their highest qualification. As men get older, they do become slightly more likely to give a postgraduate qualification as their highest qualification (slide below).

However, this is only a partial explanation. When I separate the analysis into education levels, men with postgraduate qualifications also start leaving the labour force in their 40s, although at a lower rate (slide below).

I’ve had a quick look at some of the other characteristics of men with bachelor degrees who are not in the labour force. The affluent retired hypothesis has some truth but far from explains it. About 10 per cent of this group report a personal income of $1,500 a week or more, compared to more than 60 per cent of all men at this age and education level.

About 40 per cent report doing childcare, although this does not mean that they are the principal carers for their children. About a third have no live-in partner, so they are not obviously relying on someone else to pay the household bills.

Around 10 per cent of male bachelor degree holders who are not in the workforce report a ‘need for assistance with core activities’ compared to 0.2 per cent for those working full time. The cumulative effects of accidents and ill health are starting to show in this demographic.

* The results reported here are not available for free on the ABS website.

As reported yesterday, Australia has recorded its worst ever employment outcomes for recent bachelor-degree graduates. The employment pain is widely spread, with only four of the forty disciplines monitored by Graduate Careers Australia escaping an employment downturn between 2013 and 2014. They are social work, medicine, veterinary science and allied health.

The largest deterioration in employment outcomes was experienced by engineering graduates, showing yet again that this is a boom and bust field of education, with periods of very low unemployment quickly followed by periods of high unemployment.

There have been many media stories about the declining job market for law graduates, and this is supported by the GCA data. Law graduates managed reasonably well in the early 1990s recession, but now there is a clear negative trend. The upside is that their un-/under-employment is still lower than the average.

I have been saying for years that there is nothing in the graduate employment data that justified claims of too few science graduates, and this year’s numbers again support my argument. Un-/under-employment rates for life science graduates now exceeds 50 per cent, second worst only to perpetual employment wooden spoon winners, graduates in the visual and performing arts. The full list of graduate un-under-employment rates is beneath the fold.

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The latest graduate employment statistics bring bad but not unexpected news: the proportion of graduates looking for full time work four months after completion has reached a record 32 per cent. This replaces the previous worst result of 29 per cent in the early 1990s recession – but without a major recession. For graduates aged under 25 years, 35 per cent were still looking for work four months after completion.

Source: Graduate Careers Australia, as above and here.

Of those looking for full-time work in early 2014, 20 per cent were working in a part-time or casual job, and 12 per cent were unemployed.

Oddly, there was little sign of this employment misery in the latest ABS Education and Work survey, which was released recently. Overall graduate unemployment remained a little over 3 per cent, the proportion of working graduates with jobs classified as professional or managerial increased, from 73 per cent to 76 per cent. I think these results should be treated sceptically. The survey is reporting increases in postgraduates that seem unlikely, being way in excess of the completions reported by the Department of Education (migration can affect the results, but not on the scale observed). The sample size means that the true result could be a fairly wide range for these sub-categories. I think they have erred on the high side.

A reader of my article on science graduates surplus to labour market requirements took exception to a figure showing poor job relevance of agriculture degrees. He points out (correctly) that this ABS category is ‘Agriculture, Environmental and Related Studies’, and argues that the poor outcomes are due to the environmental rather than agricultural element.

Unfortunately, the survey I was using in the figure does not report at sub-field level. However, the census does and we can see that although environmental studies is the biggest sub-field (the numbers in brackets) the more traditional agricultural areas don’t do especially well in leading to professional or managerial employment, the occupations the ABS deems to require bachelor-degree level skills.

Note: Only includes people reporting a bachelor degree as their highest qualification. Those not working and those currently studying have been excluded.

On a quick glance there looked to be unusually large numbers in jobs classified by the ABS as ‘technicians and tradespersons’. Adding them in takes most disciplines up to 70-76% employment.

The numbers for recent agriculture graduates may be compromised by the inclusion of environmental graduates (they use a different disciplinary classification to the ABS; I am not sure what is included in agriculture). But their employment rates are slightly below average.

I am aware that employers in the agricultural sector report recruiting difficulties. But overall these figures suggest that agriculture is a relatively high employment risk course choice.

On my Facebook page, there has been a bit of debate about my article in this morning’s Age. My basic point was that women with bachelor degrees are less likely to work full-time than men, and that this inevitably has consequences for what proportion of senior jobs go to women. These jobs are typically more than full-time, and usually go to people with a lot of experience.

Obviously childcare is a big part of the story. As the figure below shows (all data from the 2011 census), the more kids women have the less likely they are to work full-time during the years when children need care.

But the figure also shows that childless women are less likely than men to work full-time. And it shows that while full-time labour force participation increases as children grow up, women in their fifties lose interest in work regardless of how many kids they have had in the past.

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I often hear it said that “law is the new arts” – a generalist degree more than a pathway to the legal profession. The release of new census data today lets us examine this issue. Certainly Australia’s universities seem to be churning out lots of law graduates. According to the census, in August 2011 73,700 Australians had bachelor-level legal qualifications as their highest qualification. That’s up by nearly a quarter on August 2006 (59,500).

We might expect that this would overwhelm the legal profession. But it is managing to absorb a large number of law graduates. The figure below shows that for male graduates the share working as legal professionals (mainly solicitors, barristers and judges) is down a bit on 2006, but still more than half by their late twenties.

Young women are similar to their male contemporaries, suggesting that the labour force is absorbing most graduates, though at a slightly lower rate than in 2006. But by the second half of their thirties, the proportion working as lawyers drops below half. I have not yet examined what else they are doing in any detail. But a quick look at overall rates of graduate workforce participation shows the same pattern as the 2006 census: even for childless female graduates full-time workforce participation declines in their thirties.

Certainly 2006 compared to 2011 shows that a lower proportion of law graduates are working as lawyers in 2011. And there is no doubt that law graduates are found in many different jobs (I have a LLB gathering dust in my spare room). But as there is still a clearly dominant occupational outcome for law graduates, it is not yet the “new arts”.