Source: ABS Census of Population and Housing (2011), customised dataset, author calculations
Summary
While two in five Australians aged 25 to 64 with post-school qualifications were employed in an occupation that effectively utilised their complement of skills (the combination of educational
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% male
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Sciences IT E&RT A&B AE&RS Health Education M&C S&C Creative ArtsFH&PS MFP utilised FOS mismatch only overqualified only underqualified only FoSOQ FoSUQ
101 Of the 40.4 per cent of the population who were effectively utilised in the workforce, around three quarters were employed full time (72.6 per cent) and 22.1 per cent employed part time. The high rate of under-utilisation is influenced by the proportion of the population not working; almost one in five people were either unemployed or not in the labour force (17.1 per cent of the population). Of the 59.6 per cent of the population not effectively utilised, around half (48.4 per cent) were employed full time, 19.2 per cent were employed part time and 26.7 per cent were not working at all. Not only does this indicate that considerable productivity potential was foregone, but also that individual prosperity, as per Human Capital Theory and the life course perspective, was not achieved for a significant proportion of the population.
While skill utilisation is predominantly associated with occupation and field of study, labour force status and sex make a considerable impact, with the interrelated nature of the two revealing prominent gendered patterns of skill utilisation.
The difference in the rate of skill utilisation between full and part time workers was considerable: 6.6 percentage points. Around half of those employed full time were effectively utilised in the labour force (50.4 per cent), while 43.8 per cent of those working part time were utilised. Greater differences occur when the type of under-utilisation is factored in, with those employed part time being twice as likely to experience the combination of field of study mismatch and over-qualification than those employed full time – corresponding with the level of engagement with the workforce by women. Those employed full time were more likely to be under-qualified, corresponding with the level of workforce participation by men, occupation and their respective level of educational
attainment. This will be further examined in the next chapter, which will explore the age, period and cohort effects on skill utilisation over the lifespan.
Men experienced a higher rate of skill utilisation in the labour market; 43.8 per cent were effectively utilised in the workforce compared with 36.8 per cent of women. While men have a greater level of overall skill utilisation than women (7.0 percentage points more), the high proportion of women not working considerably reduces their overall skill utilisation rate. When those not in the labour force are discounted, the difference between men and women is reduced to 2.4 percentage points (49.8 per cent and 47.4 per cent respectively). The type of under-utilisation differed for men and women; over a third of women experienced a combination of field of study mismatch and over-qualification compared with a fifth of men. Women were also more likely to be over-qualified only than men (7.2 per cent of women compared with 4.8 per cent of men), whereas nearly one fifth of men
experienced field of study mismatch only, compared with 12.9 per cent of women. Men were also more likely to be under-qualified than women (10.6 per cent compared with 7.7 per cent). These
results reflect the respective levels of engagement with the labour market and educational attainment. Further gendered differences in skill utilisation occur when occupation, labour force status, field of study and educational attainment are considered. Even so, when employed, and regardless of labour force status, women had higher rates of skill utilisation than men for all occupation groups other than the male-dominated occupations (technicians and trade workers, machinery operators and drivers and labourers). Compared with overall skill utilisation rates, in which men have higher levels, this discrepancy is explained by the proportionate distribution of occupations in the population.
Those in higher skilled occupations experienced higher rates of utilisation compared with those in lower skilled occupations, which corresponds to those with tertiary level qualifications experiencing higher levels of skill utilisation. Even so, evidence of over-qualification for medium skilled
occupations indicates credentialism, occupational downgrade, or supply and demand mismatch. Further, occupations that require job-specific skills through fields of study had higher levels of skill utilisation than those with more generic skill requirements, with two important provisos: first, gendered occupations and fields of study have much higher rates of utilisation for the dominant sex than the non-dominant sex, that is, men had higher rates of utilisation than women for male- dominated occupations (e.g. technicians and trade workers); and women had higher rates of utilisation than men for feminised occupations. In addition, in the male-dominated occupations (managers, technicians and trade workers, machinery operators and drivers and labourers), full time employees had higher levels of skill utilisation than those employed part time. For female dominated occupations (community and personal services workers, clerical and administrative workers and sales workers), those who worked part time had a higher level of skill utilisation than those who worked full time. Even when women achieved a qualification in a male-dominated field of study, they were less likely than men to work in an occupation appropriately matched to that field of study. The reverse was true for men and female-dominated fields of study (health, education, society and culture and creative arts). Men had higher levels of utilisation than women in each of these fields of study, despite a considerably smaller proportion of the population studying the discipline than women. Second, while job-specific fields of study had high proportions of utilisation, they also contributed relatively high proportions to under-utilisation, predominantly because of the combination of field of study mismatch and over-qualification. This suggests there is also an oversupply of labour with job-specific skills compared with the demand for those skills.
While those with tertiary qualifications experienced higher rates of skill utilisation than those with vocational qualifications, there were high rates of under-qualification for men who predominantly
103 held vocational qualifications, and of over-qualification for women, who were more likely to hold tertiary qualifications. When combined with field of study mismatch, this indicates a supply and demand disconnect between the education system and the labour market, as well as considerable productivity performance implications.
While Human Capital Theory contends that both individuals and the broader society and economy derive benefit from investment in education, with improved productivity being central to long term, broader economic development, evidence presented in this chapter suggests that the existing human capital in Australia is not being effectively utilised in the labour market. As such, it is likely that there have been foregone productivity gains, and that future productivity growth potential resulting from additional investment in education and training is unlikely without policy intervention to improve utilisation.
The next chapter incorporates the life course perspective in the analysis of skill utilisation to gain a greater insight into the factors associated with the under-utilisation of human capital in Australia.