The rise of a factoid

Early this month, Labor MP Craig Emerson released some ABS data collated by the Parliamentary Library, using it to argue that

two-thirds of the jobs created under the Howard government have needed a university degree as a prerequisite.

Blogger Tim Dunlop was quick to describe it as a ‘telling statistic’. Victorian Skills Minister Jacinta Allan thinks it is telling too, using it in her complaints that Victoria gets too few university places to match demand for graduates in the labour market, a line repeated in today’s front-page lead story in The Age and on page three of the AFR. (Update: And it replicates itself again in Tuesday’s Age editorial.)

But how good is this number? The Parliamentary Library used these assumptions in arriving at their figure:

Level of qualification has been derived on the basis of the occupations in which people are employed. Hence, persons with degree qualifications or higher are assumed to be either ‘managers and administrators’, ‘professionals’ or ‘associate professionals’; persons with other tertiary qualifications are assumed to be either ‘tradespersons and related workers’ or ‘advanced clerical and service workers’; and persons with school level qualifications are assumed to be persons employed in any of the other occupations.

But when we look at the definitions of these ‘degree qualification’ occupations in the ABS classification of occupations this assumption does not look so sound. For ‘managers and administrators’ the ABS states that most occupations in this group

have a level of skill commensurate with a bachelor degree or higher qualification or at least five years relevant experience (my emphasis)

For professionals, too, the emphasis is on skills commensurate with holding a bachelor degree or above. But for ‘associate professionals’ the assumption is weakest:

have a level of skill commensurate with an AQF [Australian Qualifications Framework, usually taught in the vocational education sector] Diploma or higher qualification or at least 3 years relevant experience.

Indeed, this ‘associate professional’ category isn’t very satisfactory and the new system of occupational classifications developed with the NZ statistics people is discontinuing it, with those previously in it being dispersed to other categories including ‘Technicians and trade workers’, ‘Clerical and administrative workers’ and ‘Community and personal service workers’.

The weakness of the assumption can be seen if we examine the actual qualifications of people in these occupations, which we can do through the annual supplement to the ABS labour market survey reported in Education and Work.

In 2006, nearly 80% of workers classified as ‘associate professional’ did not have a university degree. Among managers, over 60% did not have a degree. Only the professions were principally the preserve of degree-holders, with 70% having a university qualification. Even the overall trend is quite modest. 42% of all workers in these occupations were degree-holders in 1996, and 49% in 2006. So many of the jobs for which we supposedly need degree-holders are in fact filled by people who don’t have one, and probably most of the ‘associate professionals’ and some of the other groups would not necessarily benefit greatly from having one.

I don’t expect my pedantry will do much good in the face of a politically-convenient factoid. You will hear this statistic again and again – but do some mental discounting when it happens. On my calculations, just under half of jobs created in that decade were for degree-holders. As I argued last month working out how many graduates we need is a very complex task, but on my analysis our main problem is the wrong mix of graduates, rather than too few overall.